PACRA maintains IFS rating of The United Insurance Company of Pakistan Limited

The IFS rating assigned to The United Insurance Company of Pakistan Limited ('United Insurance' or 'the Company') gathers support from its sound presence in the insurance industry. The Company's Gross Premium Written (GPW) saw an impressive growth of ~29% during CY24, reaching around PKR 13bln (compared to PKR 10bln during CY23), with the growth primarily driven by its conventional portfolio, which accounts for ~81% of the total GPW. Moreover, growth in the Takaful business adds support to the Company; however, effort and commitment are needed to fully realize the potential. Currently, the miscellaneous segment (which includes hospitalization, travel, and bond business) is the largest contributor, accounting for ~40% of the total GPW, followed by crop insurance, which contributes roughly ~22%. Looking ahead, the Company is banking on continued growth in the crop insurance segment to capture more market share, along with maintaining a stable position in the motor and fire & property insurance segments, which together support its underwriting results. However, the Company faces some challenges, particularly in terms of higher outstanding claims, which highlight its reliance on liquidity. Despite this, the bulk of these claims are expected to be settled by reinsurers. The combined ratio stands at ~71%, indicating a sound operational performance. On the investment side, the Company has seen a notable increase in income from its investment book, which is predominantly composed of cash and bank balances as well as government securities. This uptick in income has positively contributed to the Company’s overall financial performance. From a financial risk perspective, United Insurance benefits from a strong panel of reinsurers and a solid equity base. However, there is a need to improve its liquidity profile, particularly as the Company looks to diversify into the real estate and life insurance sectors. The successful and timely execution of these diversification efforts will be crucial for the ratings. The Company has lately divested 59mln shares in APNA Microfinance Bank.
The rating is dependent on the management's ability to effectively leverage its well-established platform for business expansion. Furthermore, the successful execution of its strategic objectives is critical. Maintaining a strong liquidity profile and enhancing equity levels are also key factors in sustaining the IFS rating.

About the Entity
The United Insurance Company of Pakistan Limited ('United Insurance' or 'the Company') was established in 1959 and is listed on the Pakistan Stock Exchange (PSX). The Company offers non-life insurance products through both conventional and Window Takaful operations, covering key segments such as Fire and Property, Marine, Accident and Health, Motor, Miscellaneous, and Crop insurance.
The majority stake in the Company is held by United International Group (~89.3%), with the remaining shares owned by individuals and institutions (~10.7%). The Board of Directors is chaired by Mr. Jamil Ahmed Khan, while Mr. M. Akram Shahid serves as the CEO, supported by a team of experienced professionals.