PACRA Upgrades IFS Rating of Habib Insurance Company Limited

The Insurer Financial Strength (IFS) rating of Habib Insurance Company Limited ("Habib Insurance" or "the Company") reflects an improvement in its overall profile, with the Company demonstrating a positive trajectory under its new leadership. Habib Insurance is part of a renowned business group, and its established brand reflects a strong institutional value system, a commitment to sound governance, and adherence to industry best practices. The Company's long history of sustained operations is a testament to its ability to withstand industry pressures. These factors support the rating upgrade. During 9MCY26, the Company demonstrated a notable improvement in its operating performance, with gross premium written (GPW) increasing by 36% to PKR 4.1bln. Higher business volumes were accompanied by stronger underwriting performance, with underwriting activities generating a profit of PKR 77mln, compared to a loss in the corresponding period last year. The combined ratio improved to 93.3% (9MCY25: 107.5%), supported by higher business volumes and improved underwriting discipline. Concurrently, profit after tax increased by 135.5% to PKR 372.8mln (9MCY25: PKR 158.3mln), as complemented by higher investment and other income; the investment yield improved to 18.5% (9MCY25: 13.1%). The improvement in earnings reflects strengthened operational performance and provides a more favorable basis for sustainable profitability. The improvement in operating performance is anchored by management's continued focus on strengthening the realization of insurance-related receivables and reinsurance balances.
Recognizing the importance of timely recoveries for liquidity management, the management has indicated that dedicated oversight and follow-up mechanisms for outstanding balances have been expedited. The improvement in claims recoveries reflects progress in this area, and continued management attention is expected to support the gradual realization of outstanding receivables and strengthen the Company's liquidity position.
Furthermore, the Company is taking steps to strengthen its investment management framework through induction of a dedicated resource. This initiative is expected to complement the existing oversight provided by the finance and actuarial teams, enhance investment evaluation, and support more informed portfolio allocation decisions. In parallel, the Board has documented its commitment to strengthening internal capital over time, which is expected to improve financial flexibility and reinforce the Company's capacity to support business growth. In line with its commitment to strengthening the capital base and ensuring regulatory compliance, Habib Insurance increased its paid-up capital to PKR 1,000mln during 3QCY26 (6MCY26: PKR 619mln) through the issuance of bonus shares. Collectively, these initiatives reflect a more proactive approach towards financial management, investment oversight, and capital strengthening. These developments are expected to support the Company's financial resilience and provide a stronger foundation for its rating profile going forward. Going forward, continued growth in the premium base, supported by prudent risk selection and pricing discipline, is expected to further strengthen the underwriting contribution to overall earnings.
The upgrade rating remains dependent on sustained growth, progress towards underwriting profitability, timely recovery of insurance-related receivables and adequate liquidity.

About the Entity
Habib Insurance Company Limited (“Habib Insurance” or “the Company”) was incorporated in 1942 as a public listed company. The Company underwrites non-life insurance through conventional and window takaful operations across fire and property, marine, accident and health, motor, and miscellaneous segments. The Company is predominantly owned by the House of Habib (~70.8%), primarily through trusts and individuals. Mr. Mansoor G. Habib serves as Chairman of the Board, while Mr. Murtaza Hussain, who has been associated with the Company since 2003 is the CEO. He is supported by a team of experienced professionals.