PACRA Maintains IFS Rating of TPL Insurance Limited

Pakistan's general insurance industry has a total size of PKR ~168bln during 9MCY24 (9MCY23: ~PKR 146bln), exhibiting a growth of ~15%, in terms of Gross Written Premium (GWP). The industry reported a growth of ~81% in underwriting results (9MCY24: ~PKR 7.7bln, 9MCY23: ~PKR 4.2bln). The net income of the industry also experienced an increase of ~33% to PKR 17bln during 9MCY24 (9MCY23: PKR 13bln). Overall, the industry outlook remains stable with substantial liquidity available to players.
The IFS rating of TPL Insurance Limited ('TPL Insurance' or 'the Company') gathers support from its stable position in the peer universe. The Sponsors hold adequate acumen, with the requisite presence on the Board and managerial framework. The Company underwrites business in both Conventional (~49.7%) and Window Takaful Operations (~50.3%), and witnessed a substantial growth of ~23% in GWP. Motor remained the top contributor, generating ~64% of the overall GWP, followed by Fire & Property (~17%), Accident & Health (~11%), Miscellaneous (5%), and Marine & Transport (~3%). However, at the underwriting level, the Company only generated ~PKR 37mln. The combined ratio remained significant, highlighting the need for a prudent underwriting strategy going forward. The investment income, despite being small, supports the bottom line. Going forward, efficient management of the investment book is required for sustained profits. On the financial risk front, the Company holds adequate liquidity with the majority of the investment book comprising bank deposits. Higher claims stress the efficiency. The Company works with an adequately rated panel of reinsurers. Equity is maintained at an adequate level.
The rating depends on the Company's ability to diversify its revenue stream. The inclusion of foreign partners is expected to provide oversight and remains imperative to the overall risk profile of the Company. Prudent management of business and financial risk remains crucial for the ratings. Considerable challenges to the financial performance and position of the Company require attention.

About the Entity
TPL Insurance Limited ('TPL Insurance' or 'the Company') was incorporated in 1992 as a publicly listed company. The principal activity includes managing non-life insurance through Conventional and Window Takaful in Fire and Property, Marine and Transport, Accident and Health, Motor and Miscellaneous segments.
The Sponsors own a major stake (~53.6%) through Associated companies, with prominent shareholding held by TPL Corp Limited (~52.87%), and TPL Holdings owns (~0.7%) share of the Company. Foreign companies hold ~32.9% stake in the Company, with prominent shareholding held by DEG - Deutsche Investitions- und Entwicklungsgesellschaft MBH (~15.87%), whereas Finnish Fund for Industrial Cooperation Ltd. holds ~17.02% stake. The remaining stake is held by Banks, DFI & NBFI, mutual funds, and individuals.
The Company's Board is chaired by Mr. Jameel Yousuf. While Mr. M. Aminuddin serves as the CEO. They are assisted by a team of experienced professionals.