The Pakistan Credit Rating Agency Limited
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PACRA Maintains IFS Rating of Alfalah Insurance Company Limited

Rating Type IFS
(26-Aug-20 )
(29-Aug-19 )
Action Maintain Maintain
IFS Rating AA- AA-
Outlook Stable Stable
Rating Watch - -

The rating recognizes Alfalah Insurance's robust financial profile, emanating from i) consistent profitability providing support to equity base and ii) investment book that contributes a sizeable income stream hence providing cushion to the bottom line. Growth in business volumes of the company has been observed. Value addition is stimulated in health segment through collaboration with well renowned telecom operator in health insurance product, which has yielded noteworthy results. This augers well for the business expansion and branding of the company. The inherent practice of retaining risk in motor segment has yielded higher underwriting profitability. Positive momentum in volumes is expected to continue on the back of synergies with Bank Alfalah in motor segment and improved business volumes via the health product post COVID. Rating also draws comfort from sponsorship of the company i.e. Abu Dhabi Group and the association with group bank – Bank Alfalah.
Prior to COVID-19, the general insurance industry witnessed a growth of 11% YoY. The current pandemic affected the volumes, which led to a contraction in the growth. However, volumes have picked up post-June 2020 amidst increase in economic activities throughout the country. The volumes need to sustain, indeed, improve in tandem with the longer historical trend. The interest rate regime would impact the fixed income stream but the equity market is improving though requiring a prudent approach.
The rating is dependent on the company's ability to augment its market position in the competitive landscape, while upholding the underwriting performance. Strengthening of liquid profile is vital along with prudent management of claims and receivables.

About the Entity
Alfalah Insurance Company Limited, commencing business in Sep'06, is engaged in providing non-life insurance services. Alfalah Insurance, with its head office in Lahore, operates through two business Hubs North and South with a total of 10 branches. Abu Dhabi Group (ADG), consisting of members of UAE's ruling family and leading businesses, owns Alfalah insurance through key sponsoring individuals and group companies including Bank Alfalah Limited.
The company’s seven-member board, including CEO, is chaired by H.H. Sheikh Nahayan Mabarak Al Nahayan. Three board members come from the sponsoring group; two members represent Bank Alfalah Limited, while one member holds executive position in ADG. The CEO, Mr. Abdul Haye, is assisted by a team of professionals, possesses around three decades of related experience.

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.