The Pakistan Credit Rating Agency Limited
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Faraan Taimoor

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PACRA Maintains IFS Rating of Adamjee Life Assurance Company Limited

Rating Type IFS
(24-Dec-19 )
(25-Jun-19 )
Action Maintain Maintain
IFS Rating A+ A+
Outlook Stable Stable
Rating Watch - -

Adamjee Life under the umbrella of Nishat Group is a mid-sized life insurance company. Synergic benefits with the group bank (MCB) are being unlocked. The business volumes have declined as the company shifts its strategy towards regular premium. Persistency in subsequent years renewal remained fairly stable. The company has registered a surplus in 9MCY19. The company's statutory funds are now self-subsistent. Introduction of window takaful operations has boded well for the company, adding significant volumes. Adamjee General Insurance is in the process of taking over remaining 26% stakes in the company from IVM Intersurer however the deal is pending due to the approval of regulator. The Management has expanded its branch network and also has built a sales force around agency model as well to add to its growth momentum. Meanwhile, comfort is drawn from Adamjee Life's strong risk absorption capacity, represented by sufficient liquidity and overall quality of its investment portfolio.
The continued self-subsistence of statutory funds, ability to improve its market position and strengthening of core profitability are integral for the rating. Moreover, prudent management of risk in wake of increasing business volumes and agency model remain important.

About the Entity
Adamjee Life Assurance Company Limited (ALAC) was incorporated in Pakistan on 4 August 2008 as a public unlisted company and started its operations from 24 April 2009. Recently, Adamjee General Insurance acquired the full control of this subsidiary. Adamjee Life is currently offering a number of life insurance schemes including Group Life, Credit Life, Saving / Investment, and Health covers. With adoption of agency model, the company has expanded its branch network to total 14 branches; two branches in Karachi, two in Hyderabad, two in Lahore, two in Multan and each in Islamabad, Sialkot, Faisalabad, Gujranwala, Sargodha and Sukkur.

The company’s BoD comprises seven members, including the CEO – Mr. Umer Mansha. AICL has majority representation (four members) on the board. Board had two members from IVM Intersurer and one member from Hollard Brokers Market South Africa at Dec-18, however, after Board elections were held in April-19, all Board members are representative of Adamjee General Insurance.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.