PACRA Maintains IFS Rating of Adamjee Life Assurance Company Limited

The life insurance sector in Pakistan remains largely dominated by public-sector insurers, accounting for ~61% of the market as of Dec-24, with private companies covering the remaining ~39%. During CY24, the industry recorded a Gross Premium Written (GPW) of ~PKR 434 bln, marking a healthy ~7% YoY increase from ~PKR 404bln in CY23. Net claims edged up slightly to ~PKR 374bln (from ~PKR 366bln), reflecting sustained claims activity. The sector’s profitability gathered support from a robust investment income of ~PKR 467bln, up ~60% from ~PKR 292bln, driving Profit After Tax (PAT) to ~PKR 23bln, up from ~PKR 20bln in the previous year. The industry's total investment portfolio also expanded, reaching ~PKR 2,518bln from ~PKR 2,027bln YoY. The overall outlook remains stable, underpinned by favorable underwriting metrics and continued strength in investment returns.
Amid this landscape, Adamjee Life Assurance Company Limited ('Adamjee Life' or 'the Company'), part of the Nishat Group, emerged as a formidable mid-sized player with a ~7.1% market share in CY24. The Company leveraged strategic bancassurance synergies with MCB Bank and benefits from the governance framework strengthened by sponsors' representation on the Board. In line with its transformation strategy, Adamjee Life pivoted decisively from its traditional agency distribution model toward bancassurance. This shift yielded impressive results: GPW surged by ~33%, driven predominantly by single-premium products, which now comprise ~55% of total premiums. Furthermore, a notable rise in renewal premiums underscores effective client retention. Financial discipline was evidenced through a well-managed combined ratio, enabling an underwriting surplus. On a net basis, profitability was supported by both underwriting gains and elevated investment income. Ultimately, net income soared to ~PKR 1.554bln (~PKR 23bln PAT industry-wide), compared to ~PKR 908mln the previous year, with EPS rising to PKR 6.22 from PKR 3.63. Looking ahead, sustained profit growth will depend on prudent investment portfolio management. Confidence in Adamjee Life’s risk-absorption capacity is reinforced by ample liquidity and a high-quality investment book. Adamjee Life's liquidity and investment discipline positions it well for future opportunities, provided investment management remains vigilant.
The rating primarily depends on the Company's enhanced competitive positioning. Alongside this, sustained improvement in core and operational profitability is essential to maintaining the rating. Additionally, the Company's solvency profile, as reflected by its reserves, must remain robust at all times. Prudence in risk management, particularly when expanding through the agency model, remains a key consideration.

About the Entity
Adamjee Life Assurance Company Ltd. ('Adamjee Life' or 'the Company') is a public listed company and has floated its shares with a trade symbol of “ALIFE” on the PSX. The Company was initially incorporated as a public unlisted company in Aug-08. The Company commenced its business in Apr-09 and became a listed concern in Mar-22. Adamjee Life operates in conventional business, offering a number of life insurance schemes.
The Company is a subsidiary of Adamjee Insurance, with ~90% shareholding. The rest of the shareholding resides between associated companies, modarabas, and the general public. Recently, Mr. Umer Mansha has been appointed as Board chairman effective 30-Apr-25. Mr. Manzar Mushtaq heads the Company as the CEO. He is assisted by an experienced team of professionals.