PACRA maintains IFS Rating of Atlas Insurance Limited

The reaffirmed rating captures Atlas Insurance Limited's (“Atlas Insurance” or “the Company”) entrenched and diversified standing within Pakistan's non-life insurance sector, reinforced structurally by its affiliation with the Atlas Group, a diversified industrial and financial conglomerate spanning the Automobile, Engineering, Power, Financial, and Trading sectors. This affiliation translates into tangible rating support: a stable captive and recurring business pipeline, an implicit capital backstop, and governance discipline inherited from a professionally run group structure. The Company's dual operating architecture (conventional non-life underwriting complemented by Takaful Window Operations) allows participation across both regulatory paradigms without diluting the primacy of its conventional core, which continues to anchor the overall risk and earnings profile. Atlas Insurance also maintains its presence in the UAE market through its associated company, which operates as an insurance broker. The net premium expanded by 23% during CY25 and by a further 11% in 1QCY26, without deterioration in underwriting discipline. The combined ratio held broadly within the 60’s range despite an elevated claims charge, evidencing that expansion is being driven by genuine risk selection and pricing adequacy rather than premium chasing. The consistency of this underwriting margin across two consecutive periods, rather than a single favorable year, lends the trajectory credibility as a sustainable driver rather than a cyclical outlier. Net income remained strong over the period, increasing from PKR 2.0bln in CY24 to PKR 2.1bln in CY25, reflecting a stable, strong bottom line. During 1QCY26, the bottom line remained strong with net profit of PKR 569mln (1QCY25: PKR 391mln), exhibiting an increase of 45%. Investment income continued to outweigh underwriting income as the dominant profit driver, a structural feature common to the domestic sector. The reliance on investment income carries an inherent exposure to yield and capital-market cycles. The assigned rating takes comfort from the absolute quantum of investment income along with improving underwriting results, indicating that the Company is building profitability in parallel, reducing single-point sensitivity to either interest-rate cycles or claims’ volatility. From a claims-settlement capacity standpoint, the ~35% expansion in the equity base during CY25 outweighs asset growth itself. The moderation in equity during 1QCY26, attributable to mark-to-market movement, does not alter this trajectory, given that unappropriated profit continued to accrete through the quarter. Sustained placement with financially strong and unique reinsurer treaties further extends the Company's effective risk-absorption capacity beyond its own balance sheet, insulating policyholder claims from single-event severity. The Company benefits from a well-structured Board comprising experienced professionals, supported by sound governance practices and a seasoned management team. Continued strategic and financial backing from the Atlas Group remains a key strength, reinforcing stability and long-term business sustainability. Atlas Insurance is already compliant to date with the prescribed phased paid-up capital requirement; therefore, no capital shortfall exists on this front.
A widening gap between investment and underwriting profitability would warrant scrutiny; continued parallel improvement in both legs would instead be the strongest affirmation of the current rating. Maintenance of the capital buffer relative to net retention, and continuity of reinsurance panel quality, remain the principal safeguards underpinning claims-paying capacity going forward.

About the Entity
Atlas Insurance Limited, which began its operations in 1935 and is listed on the Pakistan Stock Exchange, is a non-life insurance provider. The Company offers conventional and takaful insurance services through a nationwide network of 29 branches. The Atlas Group holds ~78% of the Company's stake, with other significant shareholders including State Life Insurance Corporation (~1.5%), financial institutions & others (~0.8%), and the general public (~19.7%). The Board is chaired by Mr. Iftikhar H. Shirazi, and the Company is led by the CEO, Mr. Babar Mahmood Mirza, and his team of professionals.