PACRA Upgrades IFS Rating of Premier Insurance Limited

Premier Insurance Limited ('Premier Insurance' or 'the Company'), a member of the well-established Crescent Group with over seven decades of operating history in Pakistan's non-life insurance space, continues to draw its core credit strength from Group affiliation and its long incumbency in the market. The Company operates through a nationwide branch network spanning Karachi, Lahore, Faisalabad, Multan, Sialkot, Gujranwala, Islamabad, and Peshawar, supported by dedicated Underwriting, Claims, Reinsurance, and Risk Management functions, and offers Takaful window operations under Shariah governance. During the year, the Company continued to strengthen its digital capabilities and technology infrastructure, with initiatives focused on enhancing operational efficiency, cybersecurity, and digital service delivery. Integration of an online payment gateway with its Travel Insurance Portal is also underway, which is expected to support broader digital distribution going forward. Pakistan's General Insurance sector recorded robust growth in CY25, with Gross Premium Written (GPW) rising ~11.4% YoY to PKR~245.2bln (CY24: PKR~220.0bln) and Net Premium Written up ~17.5% to PKR~102.2bln, aided by a recovery in auto sales and expanding Takaful uptake. However, sector wide underwriting performance weakened, with the combined ratio slipping to ~101.5%, driven largely by elevated claims within the Takaful segment, leaving investment income (up ~10.4% YoY to PKR~43.5bln) as the principal profit driver. Premier Insurance Limited’s performance diverged from the broader Sector, posting stronger topline momentum. The Company's GPW rose to PKR 844mln in CY25 (CY24: PKR 731mln), up 15.4% YoY, driven largely by a sharp pickup in the Takaful segment (+44.9%) against modest growth in conventional business (+1.6%). Net Insurance Premium increased 17.0% to PKR 419mln (CY24: PKR 374mln), with a retention ratio of 51.8% (CY24: 53.9%) against a reinsurance cession of ~34.2% of GPW (CY24: 34.0%). Underwriting operations posted a narrower loss of PKR 135mln (CY24: loss of PKR 172mln), as net claims rose to PKR 333mln (CY24: PKR 270mln) and the loss ratio increased to 64.0% (CY24: 60.7%) — driven chiefly by the Fire & Property and Motor segments. Profitability was nonetheless cushioned by investment income of ~PKR233mln. On governance, leadership transitioned during the year, with Mr. Sharik Bashir now serving as Chief Executive Officer, supported by Mr. Khalid Bashir as Non-Executive Chairman; the Board retains independent representation through Mrs. Rukhsana Saleem and Mr. Salman Rafi. Shareholding remains concentrated within the Crescent Group and associated family entities, which together hold ~57% of the Company, underscoring continued sponsor commitment. Going forward, management's priorities center on reversing the decline in core underwriting volumes, tightening claims management in health lines, and strengthening the equity base in line with SECP's phased minimum paid up capital roadmap (PKR~1.0bln by end Dec'26, rising to PKR~2.0bln by end Dec'30), a step increasingly pivotal to franchise sustainability.
The rating continues to draw support from Group affiliation, long market presence, and adequate liquidity, and remains constrained by the Company's thin market share, weak and declining premium base, elevated combined ratio, and the pressing need for capital augmentation. Sustained improvement in underwriting discipline, a reversal of the GWP contraction, and timely capital build up will remain key rating sensitivities.

About the Entity
Premier Insurance Limited ('Premier Insurance' or 'the Company') was incorporated as a listed concern, on PSX, in 1952. The Company operates through two business hubs: South and North. The Crescent Group and its associated companies hold majority shareholding of the Company. The Group operates in diversified sectors of textile, steel, sugar, and power. The Board is chaired by Mr. Khalid Bashir. The Company is headed by Mr. Sharik Bashir, as the Chief Executive Officer. He is aided by a team of experienced professionals.