PACRA Maintains IFS Rating of TPL Insurance Limited

The IFS rating of TPL Insurance Limited (‘TPL Insurance’ or ‘the Company’) derives support from its stable position within the non-life insurance providers in Pakistan. Overall, the non-life insurance sector has exhibited a growth of ~14% in terms of Gross Written Premium (GWP) during CY24. The underwriting results surged by ~70%. This, combined with better investment income, provided suitable support to the sectors' overall profitability. The players hold substantial liquidity; however, the prevailing economic conditions will continue to be a crucial factor for the industry's sustained performance. TPL Insurance operates in both Conventional (~42%) and Window Takaful (~58%) segments, recording a growth of ~23% and ~8% in GWP during CY24 and 6MCY25, respectively. The Motor segment continued to dominate the portfolio, contributing ~69% of total GWP, followed by Fire & Property (~9%), Accident & Health (~9%), Miscellaneous (~9%), and Marine & Transport (~4%). At the underwriting level, the Company generated a modest profit of ~PKR 37mln during CY24, and ~PKR 39mln during 6MCY25. While the combined ratio remained elevated. Investment income is limited and insufficient to support the bottom line. Prudently managing the underwriting side, along with clarity in the investment management, remains essential to achieve sustained profitability going forward. On the financial risk front, the Company maintains adequate liquidity, with the majority of its investment book placed in bank deposits. Elevated claims continue to test operational efficiency. Working with a well-rated panel of reinsurers benefits the Company. Equity levels are adequate, in line with SECP's latest requirement of increased MCR. The Sponsors hold sound financial strength and relevant business acumen, with appropriate representation on the Board. Governance and control frameworks remain adequate, supporting the Company’s strategic direction and oversight. Lately, TPL Insurance has received an intention from VEON Group Holding Company Ltd and/or its subsidiaries/associated entities (the “Acquirer”) to potentially acquire shares and control of the Company beyond the thresholds prescribed under Section 111 of the Securities Act, 2015. VEON Group (‘the Group’) is a UAE-headquartered digital operator delivering converged connectivity, digital financial services, and AI-driven solutions to nearly 160mln customers across five high-growth markets. Operating in regions home to over 6% of the world’s population, the Group advances economic growth and individual empowerment. In Pakistan, its flagship brand Jazz— the country’s leading mobile operator—serves 70mln+ subscribers, underscoring the Group's deep market commitment. The intention remains subject to requisite regulatory approvals, due diligence, negotiations with sellers, and execution of definitive agreements. This will restructure the Company's governance framework and managerial practices, going forward. The modalities of this acquisition, along with its timely and successful completion, are important; hence, PACRA assigns a Watch to the Company's maintained IFS rating.
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 operations in Fire and Property, Marine and Transport, Accident and Health, Motor and Miscellaneous segments.
The Sponsors own a major stake of ~54.6%, through TPL Corp Limited (~53.88%), and TPL Holdings (~0.73%). Foreign companies hold ~32.9% stake in the Company, with prominent shareholding held by DEG - Deutsche Investitions- und Entwicklungsgesellschaft MBH (~15.87%), and Finnish Fund for Industrial Cooperation Ltd. (~17.02%). 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.