The United Insurance Company of Pakistan Limited

CREDIT RATING REPORT | Sep-25

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Rating History
Dissemination Date IFS Rating Outlook Action Rating Watch
30-Sep-25 AA+ (ifs) Stable Maintain -
27-May-25 AA+ (ifs) Stable Maintain YES
18-Apr-25 AA+ (ifs) Stable Maintain -
19-Apr-24 AA+ (ifs) Stable Maintain -
19-Apr-23 AA+ (ifs) Stable Maintain -
About the Entity

The United Insurance Company of Pakistan Limited ('United Insurance' or 'the Company') was established in 1959 and listed on the Pakistan Stock Exchange (PSX). The Company is primarily owned by the United International Group (UIG), which holds a controlling stake of ~89.3%. The remaining shares are distributed among individuals and institutions. United Insurance specializes in non-life insurance, offering products through conventional and Window Takaful operations across major segments including Fire, Marine, Health, Motor, and Crop insurance. Mr. M. Ashraf Khan serves as the Chairman of the Board, while Mr. M. Akram Shahid leads the management team as the Chief Executive Officer, supported by a professional staff.

Rating Rationale

The assigned IFS rating of The United Insurance Company of Pakistan Limited ('United Insurance' or 'the Company') is supported by its sound and established presence in the insurance industry. The Company is the flagship entity of the United International Group (UIG), which maintains diversified interests across sectors, including insurance, microfinance, IT, dairy, and vehicle tracking. United Insurance operates within the non-life segment, managing both conventional (~81%) and window Takaful (~19%) operations, with active efforts underway to realize the full potential of the Takaful segment. The revenue structure is primarily dependent on the miscellaneous segment (including hospitalization, travel, and bond business), which contributes ~30% of the total Gross Premium Written (GPW), followed by crop insurance at ~22%. In CY24, the Company's GPW demonstrated promising growth of ~29% (CY24: PKR 13bln, CY23: PKR 10bln), backed by improvements in both conventional and Takaful sides. While GPW was subdued in 6MCY25, the Company's active management of ceded reinsurance led to a ~14% growth in Net Premium Written (NPW). Operationally, the Company’s combined ratio indicates sound performance, and it has successfully managed claim expenses, which were a challenge historically. The Company’s investment book, predominantly composed of cash, bank balances, and government securities, has generated a notable increase in income, positively contributing to the overall financial performance. Underwriting results are expected to be supported by sustained growth across all insurance segments. United Insurance benefits from a strong panel of reinsurers and a solid equity base. The operational reliance on reinsurers means the bulk of claims is expected to be settled by them; however, liquidity enhancement remains important. While the combined ratio is sound, the Company's forward-looking risk profile requires attention to its liquidity profile, especially as it seeks to diversify into the real estate and life insurance sectors. The successful and timely execution of these diversification efforts will be crucial for the stability of the ratings.
Following the stay order granted by the Islamabad High Court and the subsequent withdrawal of the earlier press release by SECP (dated 21-May-25), PACRA maintains the IFS rating of United Insurance at AA+. This rating denotes a very strong capacity to meet policyholders and contract obligations. Risk factors are very low, and the impact of any adverse business and economic factors is expected to be minimal.

Key Rating Drivers

The assigned IFS rating is contingent upon management successfully achieving the core objectives, by leveraging its well-established platform for business expansion, and executing its strategic objectives. Concurrently, maintaining a stable liquidity profile and strengthening equity levels are likewise essential requirements for sustaining the current rating.

REPORT CONTENTS
  1. Rating Analysis
  2. Financial Summary
  3. Rating Scale
  4. Regulatory Disclosure

METHODOLOGY

RATING ANALYST

  • Zaeem Ul Rehman
  • zaeemulrehman@pacra.com
  • +92-42-35869504
  • www.pacra.com

The United Insurance Company of Pakistan Limited

rating analysis

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Profile
Legal Structure

The United Insurance Company of Pakistan Limited ('United Insurance' or 'the Company') was incorporated as a public listed company on 20-Oct-59. The Company is listed on PSX.


Background

United Insurance was set up by Mr. Fakhruddin Valika. Initially, the Company was authorized to offer both Life Assurance and General Insurance services; however, later it remained focused on general insurance while continually diversifying its product range. In 2023, SPI Insurance Company Ltd. was merged with and into the Company.


Operations

The Company primarily engages in general insurance and underwrites business in Fire & Property Damage, Marine Aviation & Transport, Motor, Crop, and Miscellaneous segmnets as well as operates a Takaful Window since 18-Aug-14. The Company operates through 150 branches mainly in Punjab, with its registered office in Karachi, and a head office in Lahore.


Ownership
Ownership Structure

United International Group ('the Group') holds majority stake of ~86.69%; out of which the Associated Companies hold ~80.9%, while Directors hold ~5.79% stake in the Company. Banks, DFIs and NBFIs hold ~4.38%, followed by NIT and ICP holding ~2.16% stake in the Company. The Company has a free float of ~6.41%.


Stability

A sound shareholding structure channeled through the Group provides stability to the ownership profile of the Company.


Business Acumen

The Group has expanded its footing in diversified business avenues - like insurance, banking, technology, tracking, health care, and risk advisory. All these companies are performing well in their respective sectors.


Financial Strength

The Group holds considerable financial muscle to support the Company, if and when needed.


Governance
Board Structure

The overall control of the Company vests in the seven-member BoD, including the CEO. There are two Independent, two Executive and three NonExecutive Directors. There is sufficient independence in the decision making and policy formation process.


Members’ Profile

Mr. M. Ashraf Khan, the Chairman since Apr-24, has over 35 years of professional experience. Earlier, Mr. Jamil A. Khan chaired the BoD. Mr. Ihsan ul Haq Khan, an Independent Director, has more than four decades of banking experience. All Directors brings diversity to the policy formation process.


Board Effectiveness

The BoD has three committees: Ethics, HR & Remuneration, Investment, and Audit Committee, to ensure the effective and efficient operations. These Committees meet on a quarterly basis to review the performance and operations. Minutes of the meetings are formally documented.


Transparency

The Company's external auditor M/s Avais Hyder Liaquat Nauman, Chartered Accountants, expressed an unqualified opinion on the financials for Dec-24. The firm is QCR rated and on the SBP's panel of auditor's in the category 'A.'


Management
Organizational Structure

The Company has established a clear segregation of duties within its organizational structure. The CEO manages core insurance-related activities and the Executive Directors oversee business development functions. However, the CEO is the man the last mile.


Management Team

The management team is led by the CEO, Mr. M. Akram Shahid, since 3-May-21. He has played a vital role in establishing the Company's market presence. All members of the senior management holds considerable industry related know-how.


Effectiveness

The management is facilitated by Underwriting, Claim Settlement, Reinsurance and Coinsurance, and Risk Management & Compliance Committee. All these Committees hold quarterly meetings to review the performance and set future strategies. Meeting minutes are formally documented.


MIS

United Insurance has an in-house-built ERP solution. The real-time MIS capturing critical information may help improve the overall efficacy of the decision-making process. Meanwhile, the development of a business intelligence system is in the offing.


Claim Management System

The Company has a centralized claims processing function. Although the claim is initially intimated at the respective branch, the authority for the appointment of surveyor and approval of the claim amount rests with the head office.


Investment Management Function

The BoD approved Investment Policy Statement (IPS) provides detailed guidelines, an execution structure, and benchmarks for diverse investment categories. Quarterly assessments by the Investment Committee evaluates the performance.


Risk Management framework

The underwriting and risk management function is centralized at head office, where policies above PKR 100mln are approved head office. Whereas, for policies approval and issuance below PKR 100mln, three zones in Lahore, Islamabad, and Karachi are setup.


Business Risk
Industry Dynamics

Pakistan's general insurance industry reached a total size of ~PKR 215bln in CY24, marking ~15% growth in Gross Premium Written (GPW) from the previous year. The sector's financial performance showed significant improvement, with underwriting results surging by ~180% to PKR 14bln. This positive trend was complemented by a ~51% increase in overall investment income, which reached PKR 37bln. Despite this strong growth, the industry's performance remains highly susceptible to prevailing economic conditions.


Relative Position

United Insurance has ~6% of market share as of Dec-24, and is ranked among the top five players of the general insurance sector


Revenue

The Company generates GPW from both Conventional (~81.5%) and Takaful (~18.5%) operations. During CY24, GPW improved by ~29.4% to PKR 13bln (CY23: PKR 10bln), attributed to inclusion of takaful business from SPI Insurance. Conventional business was primarily driven by the Misc. segment (~49.8%), followed by Crop (~17.7%), Fire & Property (~13.4%), Motor (~13.1%), and Marine (~5.8%). In 6MCY25, the Company generated a GPW of ~PKR 3.4bln, with a dip of ~8%. Going forward, the Company projects a growth trajectory in the GPW as of CY25. 


Profitability

During CY24, the underwriting performance of the Company reported at ~PKR 2.1bln in CY24 (CY23: ~PKR 1.3bln). With driving support from investment income (CY24: ~PKR 544mln, CY23: ~PKR 178mln), the bottom line of the Company improved to ~PKR 2bln in CY24, from ~PKR 1.2bln in CY23. In 6MCY25, the Company reported an underwriting income of ~PKR 1.2bln. On the net level, the Company book an income of PKR 678mln, due to a loss booked by the sale of a strategic investment in Apna Microfinance Bank. 


Investment Performance

The Company's investment portfolio is characterized by cash & bank balances (~57%), followed by government securities (~19%), investment in properties(~12%), debt instruments (~8%), and equity instruments (~3%). During CY24, the investment income of the Company witnessed an uptake of ~206% and was reported at ~PKR 544mln (CY23: PKR 178mln), primarly driven by gain on disposal of investment in govt securities. In 6MCY25, the Company booked an investment loss of PKR 247mln, due to loss on the strategic sale of investment in Apna Microfinance Bank. Going forward, the Company requires vigilance in managing its investment portfolio.


Sustainability

The Company plans to setup a life insurance company; however, the recently enhanced minimum capital requirement by SECP requires attention. Additionally, the Company's management is actively identifying growth opportunities.


Financial Risk
Claim Efficiency

The Company’s risk absorption capacity, reflected by liquid assets coverage to outstanding claims, stood at 0.8x as of CY24 (CY23: 0.6x). Whereas, claims outstanding days reduced to 323 days (CY23: 344 days), majorly owing to an decrease in insurance/takaful claim expense. As of CY24, insurance/takaful claim expanse clocked to ~PKR 5.1bln (CY23: ~PKR 4.4bln). In 6MCY25, the liquid asset cover to outstanding claims remains stable at 0.8x and the claim expense clocked in at PKR 2bln. Going forward, the Company's claim efficiency is expected to remain adequate.


Re-Insurance

The Company operates partnring with a panel of strong reinsurers, which include Swiss Re(Rated ‘AA-’ by S&P), Korean Re(Rated A by S&P), Hannover AG(Rated ‘A+ ‘by S&P), Pakistan Reinsurance(Rated AA locally), Chaucer MENA Underwriting Ltd.(Rated ‘A' by S&P), Echo Re(Rated ‘A-' by S&P), Canopius Asia(Rated ‘A+' by AM Best), Societe Centrale de Reassurance(Rated ‘B++' by AM Best), Africa Re(Rated ‘A-' by S&P), Kuwait Re(Rated ‘A-' by AM Best), Tunis Retakaful(Rated ‘AA' by Fitch), Kenya Re(Rated ‘B+' by AM Best). 


Cashflows & Coverages

United Insurance’s liquid investment book in CY24 was reported at ~PKR 3.9bln (CY23: PKR 3.2bln). As of CY24, the Company's Liquid Assets/Outstanding Claims including IBNR reported at 0.8x (CY23: 0.6x) reflecting weak liquidity coverage.The Company withdraw investment from Govt securities. Investment Book from conventional business witnessed growth of ~23% whereas investment book of takaful business also increased by ~36%. In 6MCY25, the liquid book cover stands at ~PKR 3.9bln, with a stable liquid cover of 0.8x. Going forward, the Company's cashflows and cover is expected to remain stable. 


Capital Adequacy

The Company’s equity stood at ~PKR 6.4bln for CY24 (CY23: ~PKR 5.5bln) and witnessed an increase owing to increased profit accumulation. During CY24, Company paid cash dividend of ~PKR 1bln, that could potentially impact the Company's liquidity position and its ability to invest in its operations or pay off debts. As of 6MCY25, the Company's equity base stands at ~PKR 7.1bln, with an uptick in the Company's paid up capital of ~PKR 693mln, due to the issuance of ~20% bonus shares. The Company remains well above the SECPs latest regulatory requirement of of equity enhancement to PKR 2bln. This is expected to bode well for the Company.
 
 

Sep-25

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The United Insurance Company of Pakistan Limited

financial summary

(PKR mln)

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Jun-25
6M		 Dec-24
12M		 Dec-23
12M		 Dec-22
12M
Management Audited Audited Audited
A. BALANCE SHEET
1. Investments 3,955 3,989 3,155 3,643
2. Insurance Related Assets 7,929 8,524 8,425 7,927
3. Other Assets 4,728 3,577 2,800 2,116
4. Fixed Assets 2,281 2,347 1,958 1,619
5. Window Takaful Operations 0 0 0 0
Total Assets 18,893 18,438 16,337 15,305
1. Underwriting Provisions 3,801 4,312 3,463 3,270
2. Insurance Related Liabilities 5,113 5,055 5,576 5,711
3. Other Liabilities 2,691 2,471 1,786 1,286
4. Borrowings 188 184 49 83
5. Window Takaful Operations 0 0 0 0
Total Liabilities 11,793 12,022 10,874 10,350
Equity/Fund 7,100 6,416 5,463 4,955
B. INCOME STATEMENTS
CONSOLIDATED INCOME STATEMENT
1. Gross Premium Written/Gross Contribution Written 4,569 13,026 10,066 8,539
2. Net Insurance Premium/Net Takaful Contribution 3,229 7,195 5,635 4,877
3. Underwriting Expenses (2,033) (5,110) (4,382) (3,627)
Underwriting Results 1,196 2,086 1,253 1,250
4. Investment Income (247) 544 178 149
5. Other Income / (Expense) 36 146 152 (38)
Profit Before Tax 985 2,776 1,582 1,361
6. Taxes (307) (766) (365) (277)
Profit After Tax 678 2,010 1,218 1,084
PARTICIPANTS' TAKAFUL FUND - PTF
1. Gross Contribution Written 1,140 2,411 2,171 2,102
2. Net Takaful Contribution 598 1,184 1,302 963
3. Net Takaful Claims (581) (1,272) (1,028) (771)
4. Direct Expenses Including Re-Takaful Rebate Earned 9 10 (97) (49)
Surplus Before Investment & Other Income/(Expense) 26 (77) 177 144
5. Investment Income 11 26 15 11
6. Other Income/(Expense) 12 35 20 8
Surplus for the Period 50 (17) 212 162
OPERATOR'S TAKAFUL FUND - OTF
1. Wakala Fee Income 505 875 703 534
2. Management, Commission & Other Acquisition Costs (464) (846) (715) (551)
Underwriting Income/(Loss) 42 29 (12) (17)
3. Investment Income 27 42 26 25
4. Other Income/(Expense) 8 3 (6) (5)
Profit Before tax 77 74 8 3
5. Taxes 0 0 0 0
Profit After tax 77 74 8 3
C. RATIO ANALYSIS
1. Profitability
Loss Ratio - Net Insurance & Takaful Claims / Net Insurance Premium or Takaful Contribution 22.1% 36.2% 35.4% 31.3%
Combined Ratio (Loss Ratio + Expense Ratio) 63.0% 71.0% 77.8% 74.4%
2. Investment Performance
Investment Yield -12.4% 15.2% 5.2% 4.7%
3. Liquidity
(Liquid Assets - Borrowings) / Outstanding Claims Including IBNR 0.8 0.8 0.6 0.7
4. Capital Adequacy
Liquid Investments / Equity (Funds) 48.2% 54.6% 51.7% 68.4%

Sep-25

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The United Insurance Company of Pakistan Limited

rating scale

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Sep-25

www.pacra.com

The United Insurance Company of Pakistan Limited

regulatory disclosure

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  1. Rating Team Statements
    1. Rating is just an opinion about the creditworthiness of the entity and does not constitute a recommendation to buy, hold, or sell any security of the entity rated or to buy, hold, or sell the security rated, as the case may be. (Chapter III; 14-3-(x))
    2. Conflict of Interest
      1. The Rating Team or any of their family members have no interest in this rating (Chapter III; 12-2-(j))
      2. PACRA, the analysts involved in the rating process, and members of its rating committee and their family members do not have any conflict of interest relating to the rating done by them (Chapter III; 12-2-(e) & (k))
      3. The analyst is not a substantial shareholder of the customer being rated by PACRA [Annexure F; d-(ii)]
      4. Explanation: for the purpose of the above clause, the term "family members" shall include only those family members who are dependent on the analyst and members of the rating committee.
  2. Restrictions
    1. No director, officer, or employee of PACRA communicates the information acquired by him for use for rating purposes to any other person, except where required under law to do so. (Chapter III; 10-(5))
    2. PACRA does not disclose or discuss with outside parties or make improper use of the non-public information which has come to its knowledge during a business relationship with the customer. (Chapter III; 10-7-(d))
    3. PACRA does not make proposals or recommendations regarding the activities of rated entities that could impact a credit rating of the entity subject to rating. (Chapter III; 10-7-(k))
  3. Conduct of Business
    1. PACRA fulfills its obligations in a fair, efficient, transparent, and ethical manner and renders high standards of services in performing its functions and obligations. (Chapter III; 11-A-(a))
    2. PACRA uses due care in the preparation of this Rating Report. Our information has been obtained from sources we consider to be reliable, but its accuracy or completeness is not guaranteed. PACRA does not, in every instance, independently verify or validate information received in the rating process or in preparing this Rating Report. (Clause 11-(A)(p))
    3. PACRA prohibits its employees and analysts from soliciting money, gifts, or favors from anyone with whom PACRA conducts business. (Chapter III; 11-A-(q))
    4. PACRA ensures before the commencement of the rating process that an analyst or employee has not had a recent employment or other significant business or personal relationship with the rated entity that may cause or may be perceived as causing a conflict of interest. (Chapter III; 11-A-(r))
    5. PACRA maintains the principle of integrity in seeking rating business. (Chapter III; 11-A-(u))
    6. PACRA promptly investigates in the event of misconduct or a breach of the policies, procedures, and controls, and takes appropriate steps to rectify any weaknesses to prevent any recurrence, along with suitable punitive action against the responsible employee(s). (Chapter III; 11-B-(m))
  4. Independence & Conflict of Interest
    1. PACRA receives compensation from the entity being rated or any third party for the rating services it offers. The receipt of this compensation has no influence on PACRA’s opinions or other analytical processes. In all instances, PACRA is committed to preserving the objectivity, integrity, and independence of its ratings. Our relationship is governed by two distinct mandates: i) rating mandate - signed with the entity being rated or issuer of the debt instrument, and ii) fee mandate - signed with the payer, which can be different from the entity.
    2. PACRA does not provide consultancy/advisory services or other services to any of its customers or their associated companies and associated undertakings that are being rated or have been rated by it during the preceding three years, unless it has an adequate mechanism in place ensuring that the provision of such services does not lead to a conflict of interest situation with its rating activities. (Chapter III; 12-2-(d))
    3. PACRA discloses that no shareholder directly or indirectly holding 10% or more of the share capital of PACRA also holds directly or indirectly 10% or more of the share capital of the entity which is subject to rating or the entity which issued the instrument subject to rating by PACRA. (Chapter III; 12-2-(f))
    4. PACRA ensures that the rating assigned to an entity or instrument is not affected by the existence of a business relationship between PACRA and the entity or any other party, or the non-existence of such a relationship. (Chapter III; 12-2-(i))
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  5. Monitoring and Review
    1. PACRA monitors all the outstanding ratings continuously, and any potential change therein due to any event associated with the issuer, the security arrangement, the industry, etc., is disseminated to the market immediately and in an effective manner after appropriate consultation with the entity/issuer. (Chapter III; 17-(a))
    2. PACRA reviews all the outstanding ratings periodically on an annual basis. Provided that public dissemination of annual review and in an instance of change in rating will be made. (Chapter III; 17-(b))
    3. PACRA initiates an immediate review of the outstanding rating upon becoming aware of any information that may reasonably be expected to result in downgrading of the rating. (Chapter III; 17-(c))
    4. PACRA engages with the issuer and the debt securities trustee to remain updated on all information pertaining to the rating of the entity/instrument. (Chapter III; 17-(d))
  6. Probability of Default
    1. PACRA’s Rating Scale reflects the expectation of credit risk. The highest rating has the lowest relative likelihood of default (i.e., probability). PACRA’s transition studies capture the historical performance behavior of a specific rating notch. Transition behavior of the assigned rating can be obtained from PACRA’s Transition Study available at our website. (www.pacra.com) However, the actual transition of rating may not follow the pattern observed in the past. (Chapter III; 14-3(f)(vii))
  7. Proprietary Information
    1. All information contained herein is considered proprietary by PACRA. Hence, none of the information in this document can be copied or otherwise reproduced, stored, or disseminated in whole or in part in any form or by any means whatsoever by any person without PACRA’s prior written consent.

Sep-25

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