The Pakistan Credit Rating Agency Limited
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Maryam Ijaz

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PACRA Maintains IFS Rating of Pak-Qatar General Takaful Limited

Rating Type IFS
(24-Feb-21 )
(25-Feb-20 )
Action Maintain Maintain
IFS Rating A A
Outlook Stable Stable
Rating Watch - -

Pak-Qatar General, one of earliest dedicated takaful companies in Pakistan, possesses strong business acumen through its association with the Qatar based financial institutions while also being allied to it’s sister concern; Pak-Qatar Family Takaful. These interconnections along with the appointment of Mr. Nasir Ali Syed as the Chief Executive Officer (formerly Chief Executive Officer of Pak-Qatar Family Takaful) provides positive omen for the future growth of the company.

Currently, the company has stagnant market position in the wake of intense competition amongst dedicated takaful peers and window takaful operations of much established players in the industry. This has resulted in pressure on the profitability. The management has devised a strategy under the new leadership to cater the growth moving forward. Efforts have been initiated to seek synergic benefits using cross selling through sister concern. The reduced interest rates would further provide impetus in the motor segment; traditionally the forte of the company. Enhancement of bank business and induction of new sale force is also underway. Increase in business volumes and takaful presence needs improvement hence therein.

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 new interest rate regime has added momentum to auto-financing, which is a good sign for the insurance industry.
The rating is dependent on the management’s ability to cohesively execute the business plan. Furthermore, improvement in market share and underwriting profitability are considered vital. Meanwhile, prudent management of premium receivables from corporate customers is essential. Also, implementation of real-time IT infrastructure along with an upgraded MIS should, among others, strengthen the claims management system.

About the Entity
PQGTL, incorporated in 2006, started operations in 2007. H.E. Sheikh Ali bin Abdullah AlThani member of Qatar's Royal Family is the key sponsor of the company. He, directly and through his different Qatar based Financial Institutions (mainly Qatar International Islamic Bank, Qatar Islamic Insurance Company, Masraf AlRayan) control around 54% stake in PQGTL. The other major sponsor is Mr. Said Gul, who controls around 37% stake. Mr. Gul, a Pakistani origin businessman settled in Qatar, has main interest in construction business.

Pak-Qatar has an eight-member board including the Managing Director – Mr. Said Gul. Mr. Gul has been associated with the company since inception. Mr. Nasir Ali Syed has been appointed as the Chief Executive Officer of the company. He is associated with the group since the last two decades. An able management team assists him.

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.