PACRA Maintains IFS Rating of Salaam Takaful Limited

Salaam Takaful Limited (“Salaam Takaful” or “the Company”) is a dedicated takaful operator. The assigned Insurance Financial Strength (IFS) rating is underpinned by the presence of financially sound and experienced sponsors, supported by a structured and evolving governance framework. Over the years, the Company has demonstrated consistent value-driven growth in Gross Premium Written (GPW), primarily emanating from the fire & property, motor, and health segments. This growth trajectory reflects the Company’s sizeable market penetration and business footprint within Pakistan’s takaful landscape. The company had fast paced growth model ever since it came under the incumbent leadership. The year 2025 saw a slowdown. Other the business volume, the motor and health segment did not perform well particularly. Besides, the expense ration witnessed an increase. These factors led to sizeable deficit. The management has reevaluated the philosophy and have made requisite changes. The projected performance reflects improving trend. This is crucial for the continued sustainable risk profile. The recent equity injection is a testimony that sponsors are committed and making efforts to upscale the company performance.
Investment income, largely supported by revaluation gains on investment properties, requires sustained discipline to ensure stability and recurrence in earnings. The Company’s financial risk profile remains moderately constrained by a relatively static investment book, predominantly comprising investments in subsidiaries and associates, namely Salaam Family Takaful and Salaam Properties as well as investment properties. While the Company’s capitalization remains adequate, liquidity indicators remain under stress. Liquid assets cover need improvement, while claims-to-liquid investments remain elevated. Consequently, effective liquidity management remains critical, particularly until the life takaful and property segments mature into sustainable cash-generating businesses. The management has intentions to lift up their family takaful arm. This type of investment requires higher capital deployment and long gestation period. Hence, vigilance is required. This coupled with real estate related investments have diluted the financial flexibility of the company. The equity injection and future profits would be essential to bring about historical equilibrium.
Pakistan’s general insurance industry reported a total GPW of approximately PKR 138.1bln as of Sep’25 (Sep’24: PKR 151.8 billion), registering a year-on-year decline of around 9.0%. The industry’s underwriting performance declined markedly, with underwriting results decreasing by 50% YoY to PKR 4.8bln in 9MCY25 (9MCY24: PKR 9.6bln). Additionally, investment income declined by around 16.4% YoY to PKR 22.9bln (9MCY24: PKR 27.4bln), primarily attributable to monetary easing.
The assigned rating remains contingent the successful execution of the Company’s strategic initiatives, particularly enhancement of liquidity, diversification of revenue streams, strengthening of profitability, and reinforcement of equity levels and avoidance of creating cash consumers from the company’s resources.

About the Entity
Salaam Takaful Limited (“Salaam Takaful” or the “Company”) is an unlisted public limited company incorporated in Jun-06. The Company is a sole takaful operator in the non-life segments. Major shareholding (~78.6%) of the Company resides with Mr. Salim Habib Godil, Mr. Shahzad Salim Godil, Mr. Rizwan Hussain, and Mr. Salman Hussain. ~21.4% stake in the Company is held by House Building Finance Company Limited, Al Baraka Bank Limited, Mal Al Khaleej Investment LLC, and Sitara Chemical Industries. Mr. Salim Habib Godil chairs the Board; while, Mr. Rizwan Hussain heads the Company as the CEO. They are supported by a team of experienced professionals.