The Pakistan Credit Rating Agency Limited
Press Release


Behrooz Fareed

Applicable Criteria

Related Research

This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains IFS Rating of Adamjee Insurance Company Limited

Rating Type IFS
(02-Mar-23 )
(31-Mar-22 )
Action Maintain Harmonize
IFS Rating AA++ (ifs) AA++ (ifs)
Outlook Stable Stable
Rating Watch - -

Core sponsorship of Adamjee Insurance Company Limited (Adamjee Insurance or the Company) is held by Nishat Group (The Group). Strong presence of the Group in the financial industry allows the Company to unlock synergies through group financial institutions i.e., MCB Bank Limited and Adamjee Life Assurance Company Limited. The Company continues to enjoy perks of being the only general insurance company with operations outside Pakistan. A sound board structure along with experienced management personnel places confidence in the sustainable operations of AICL. Further, the rating reflects the adequate risk management framework, facilitating the Company to achieve adequate profitability. A diversified revenue strategy is pursued by the Company, with focal business derived through Fire & Motor segments at ~39% & ~34% GPW concentration, respectively. Whereas, a GPW mix of ~17% through Health, ~6% through Marine and ~4% through Miscellaneous segments was earned during 9MCY22. The total segmental mix converged into Gross Premium/contribution of PKR~28,505mln (9MCY21: PKR~19,664mln) showing a healthy growth of ~45% Period-on-Period. The Company's sizeable investment portfolio, albeit concentrated in few group companies, continues to supplement its profitability through stable dividend stream and financial strength. Adamjee Insurance managed to generate investment income of PKR~1,972mln in 9MCY22. Enhanced GPW profile, combined with strong operating performance and investment resulted in better profitability. The Company reported expense and combined ratio of ~33% and ~97%, respectively. Adamjee Insurance has sound equity base and sufficient liquidity compliments strong risk absorption capacity. The business strategy, going forward, is to focus on increasing its market share through expansion of branch network - home and abroad - along with product innovation; retail and micro insurance.
The rating depends on the profitability of core business and investment income. Continuous strengthening of its market position along with its growing underwriting profits remains fundamental for the rating. Sustainable segment mix and efficient expense management remained critical to the financial performance, with further progress being envisaged.

About the Entity
Adamjee Insurance Company Limited is one of the largest general insurance companies of Pakistan, incorporated in 1960 and is listed on Pakistan Stock Exchange. The Company operates a network of 91 branches of conventional insurance and 3 of takaful (North, South and Central) in Pakistan, 20 Specialized Agriculture field offices, three in UAE (Dubai, Abu Dhabi & Sharjah), and one branch in Export Processing Zone (EPZ). Operations are divided into 10 divisions; five in south, four in north, and one in UAE.
Adamjee Insurance's BoD comprises eight members including the CEO. Chairman of the board, Mr. Umer Mansha, is a distinguished businessman with over 25 years of experience, holds a bachelor’s degree in business administration from USA. Mr. Ali Zeb is the CEO of Adamjee Insurance since 2013, a Fellow Chartered Accountant and has a post graduate diploma in Organizational Leadership from Said Business School, University of Oxford. He carries extensive experience in the field of insurance, investments and banking. A team of qualified professionals assist the CEO.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.