PACRA Assigns Initial IFS Rating of The Pakistan General Insurance Company Limited

The Pakistan General Insurance Company Limited ("Pakistan General" or "the Company") has re-entered the revival phase. Mr. Shahzad Habib, the lead sponsor with substantial experience in the relevant field, along with the management, is making concerted efforts to re-establish the Company on its own feet. A Board has been established, comprising Executive, Non-Executive, and Independent members. A team of professionals has been inducted to head various functions of the Company. The envisaged strategy is to tap into existing relationships and bring growth to the Company. The Sponsors are committed to enhancing the equity, which is currently very humble. This may take some time. During CY24, the underwriting business volume was small, given the re-initiation of business activity. Other performance indicators were also reflective of the current stage of the Company's growth proposition. With the injection and enhancement of the capital, the Company will be able to exude stronger health. The Company's portfolio size remains comparatively small, i.e., at ~PKR 11mln, and trickling in from the motor segment only. The management is eyeing to take substantial steps to expand the segmental base, while minimizing the concentration risk. Going forward, generating profits from the core operations is important. At present, the Company's liquid investment book comprises ~PKR 50mln invested in PIBs and ~PKR 0.2mln invested in listed equity securities, to generate a supplementary income. The Company holds an equity base of ~PKR 557mln, and requires stringent efforts to manage SECP's requirement of enhancing the paid-up capital to ~PKR 2bln by 2030. Lately, Pakistan General has drafted a detailed strategy, with a defined timeline, for enhancing the Company's liquidity position through equity injection and other means. Moreover, the Company has improved its insurance panel. These are imperative to the assigned rating. However, the overall quantum of risk remains considerable.
The rating is dependent upon improved performance, and in turn the relative position of the Company. Moreover, resolution of compliance concerns related to financial transparency and qualified opinion. Additionally, the development of a liquid investment book, along with achieving breakeven from the core operations, is imperative. Maintaining a stable financial risk profile, with a strong emphasis on onboarding good quality reinsurers, is crucial.

About the Entity
The Pakistan General Insurance Company Limited (‘Pakistan General' or 'the Company'), incorporated in Jul-47, is listed on PSX. The Company is primarily (~84.7%) owned by M. Shahzad Habib and his associates/family, while the rest is free float, held by the general public (~15.3%). The Company’s Board comprises seven members, including three Independent Directors. The Board is chaired by Mr. Abrar Ahmed Cheema. Mr. Abdul Hseeb Fakih heads the Company as the CEO, with Mr. Ali Shahzad managing the operations as the Chief Operating Officer. All Board members and management personnel are experienced professionals.