PACRA Maintains IFS Rating of East West Insurance Company Limited

The IFS rating of East West Insurance Company Limited ('East West' or 'the Company') reflects a stable risk profile supported by the Sponsors, a diversified non-captive underwriting base and strong capital and liquidity. Operating since 1983, the Company has a nationwide presence through regional offices and branches across all provinces, Azad Kashmir and Gilgit-Baltistan. It also has dedicated divisions for corporate, engineering, health and agriculture businesses. The Company underwrites conventional insurance (87% of 6MCY26 GPW) alongside window takaful operations. Fire & property remains the top segment (36%), followed by motor (18%), engineering (18%), miscellaneous (17%) and marine, aviation & transport (12%), indicating a well-spread portfolio. The general insurance sector continues to expand from a low base, with a penetration of 0.2% of GDP. Sector GPW grew 11% to PKR 245bln in CY25 and 13% during 3MCY26, supported by commercial activity, motor and takaful. Profitability remains under pressure. The sector’s combined ratio exceeded 100% in CY25 on elevated takaful claims with limited re-takaful providers, and investment income is expected to stay volatile. Regulatory reforms, including IFRS 17, risk-based capital and higher minimum capital requirements, will raise compliance costs, particularly for smaller players. Against this backdrop, East West has outpaced the sector. GPW grew 45% during 6MCY26 to PKR 7.5bln, building on a 53% increase in CY25 to PKR 12.9bln, with takaful rising faster than conventional business. The Company holds 5.8% of the conventional market and retains a higher share of risk than large-player peers, which has lifted net premium and supported earnings. Underwriting results improved by 64% and stood at PKR 1.0bln in 6MCY26. The combined ratio was 80% (CY25: 84%), well below the sector, on a stable loss ratio and contained expenses. Investment income nearly doubled to PKR 647mln, aided by capital gains. The PKR 13.6bln investment book is deployed largely in government securities and equities, which keeps returns sensitive to market movements. Profit after tax rose markedly to PKR 1.1bln during 6MCY26, translating into a healthy return on equity. Equity reached PKR 7.4bln, and paid-up capital of PKR 3.1bln already exceeds the regulatory minimum requirement. Liquidity remains substantial, and claims management is efficient. A multi-layered treaty program backed by a panel of reinsurers protects against large losses. Management intends to sustain growth by leveraging its specialized divisions, expanding takaful and advancing digitization, while keeping retention and reinsurance protection prudent. Projections indicate continued growth in premiums and profitability in CY26.
The rating depends on the Company's ability to sustain market share and profitability, and to maintain underwriting discipline as retention rises. Risk-adjusted investment returns must also improve, and capital and liquidity must stay aligned with growth and the evolving risk-based capital regime.

About the Entity
East West Insurance Company Limited was incorporated as a public listed company (listed on PSX) and became operational in 1983. It operates as a general insurance company with a primary tilt towards the fire & property segment. The Yunus family holds the majority shareholding, with the rest held by the general public. The Board comprises nine members, including four independent directors, and is chaired by Mr. Javed Yunus. Mr. Naved Yunus leads the Company as CEO, supported by Mr. Saad Yunus as Deputy MD and a professional team. Governance and managerial depth remain strong.