PACRA Maintains IFS Rating of Habib Insurance Company Limited

Habib Insurance Company Limited's ("Habib Insurance" or "the Company") assigned rating gathers comfort from its association with the House of Habib, a well-established business group, and a streamlined governance framework. The Company operates in the general insurance industry, which held a size of ~PKR 214bln in CY24, exhibiting a growth of ~14% in GPW. An increase of ~70% was witnessed in the underwriting results, while the overall investment income grew by ~34% in CY24. Habib Insurance generated GPW from both conventional (~84%) and window takaful (~16%) operations. The GPW trickles in from diversified segments, where fire & property remains the major contributor with ~37.5% in the total GPW, followed by motor (~34%), marine & transport (~15%), miscellaneous (~ 13%), and health (~0.2%) segments. The Company’s GPW rose to PKR 4bln in CY24 (CY23: PKR 3.7bln), reflecting a growth of ~9%, staying in line with the industry parameters. However, consistently high-level claims continued to keep the combined ratio inflated, leading to a stressed underwriting performance. The Company has booked an underwriting loss of PKR 251mln during CY24. However, bottomline gathers support from a healthy investment income of PKR 490mln as of Dec-24, which was primarily sourced from dividend income, gains on disposal of equity investments, deposits, and government securities. Liquidity remains adequate with an investment book of ~PKR 3.4bln, supported by a steady equity base of ~PKR 2.2bln as of Dec-24. The Company benefits from a panel of strong-rated reinsurers. Going forward, greater inclusion of digitization is expected to support business volumes and operational improvements. A clear focus on the elevated standing of claims and efforts to gather support from the captive and non-business business is important.
The rating is based on the Sponsor's profile and the relative position of Habib Insurance in the general insurance industry. A cautious approach to improve the business volumes that support the underwriting results remains critical. Growth in the investment income, along with an enhanced liquid profile is imperative for the rating.

About the Entity
Habib Insurance Company Limited ("Habib Insurance" or "the Company") was incorporated in 1942 as a public listed company. The principal activity includes managing non-life insurance through Conventional and Window Takaful in Fire and Property, Marine, Accident and Health, Motor and Miscellaneous segments. The major stake of the Company lies with the House of Habib (~70.8%), mainly through the Trust and Individuals. Earlier, the Board was chaired by late Mr. Rafiq M. Habib. While Mr. Syed Ather Abbas serves as the Company's CEO. He is assisted by a team of experienced professionals.