Premier Insurance Limited ("Premier Insurance" or "the Company") was incorporated in 1952 as a public listed company, listed on the Pakistan Stock Exchange (PSX).

In 1952, Mr. Zahid Hussain, the first Governor of the State Bank of Pakistan, brought together leading industrialists to establish Premier Insurance with a vision to support the insurance requirements of the country's nascent, developing economy.

The Company offers general insurance solutions under two categories: Commercial Line and Personal Line, providing coverage for fire, marine, motor, health, travel risk, personal accident, homeowners, and other specialized segments. The Company's head office is in Karachi and operates through two hubs — South and North — with 12 branches. During CY25, the Company's business mix shifted markedly toward Takaful, in line with an industry-wide, SECP-facilitated transition of the insurance sector toward Shariah-compliant models pursuant to the 26th Constitutional Amendment and the Federal Shariah Court's directive for a riba-free economy. This shift is reflected in the Company's CY25 premium composition and is discussed further under Business Risk.

Premier Insurance is part of the Crescent Group. As of Dec'25, the pattern of shareholding shows that associated companies and related undertakings form the largest block with approximately 26.6% equity, led primarily by Crescent Powertec Limited, Equity Textiles Limited, and Suraj Cotton Mills Limited. The Company’s leadership, comprising directors, the CEO, and their immediate families, collectively controls around 5.4% of the shares, primarily through Mr. Imran Maqbool, Mr. Nadeem Maqbool, and Mr. Sharik Bashir. The remaining institutional holdings are dispersed across modest stakes, with insurance companies, modarabas, mutual funds, and other corporate nominees holding roughly 8.0%, while banks and other financial institutions hold a minimal fraction of about 1.7%.

The Crescent Group's presence continues to provide stability to the Company's ownership structure. There have been no significant changes in the shareholding pattern, and the majority of shares remain closely held, contributing to ownership stability.

Within the Crescent Group, the Bashir family remains the single majority stakeholder (~45%). The Group has weathered many business cycles and maintains interests across multiple sectors, underpinned by a strong track record.

The Crescent Group holds a significant presence in Pakistan's textile, sugar, steel and power segments.

The Board of Premier Insurance continues to comprise seven members: one Executive Director, two Independent Directors (one of whom is a female director), and four Non-Executive Directors. The Board remains dominated by the presence of the sponsoring family, while the presence of independent directors provides objective oversight aligned with best governance practices. The board of directors is chaired by Non-Executive Director Mr. Khalid Bashir, alongside fellow Non-Executive Directors Mr. Nadeem Maqbool, Mr. Ahsan Bashir, and Mr. Imran Maqbool. Executive leadership is represented by Mr. Sharik Bashir, who serves as the Chief Executive Officer and Executive Director, while independent governance is provided by Mrs. Rukhsana Saleem and Mr. Salman Rafi as Independent Directors.

Mr. Khalid Bashir, an experienced entrepreneur, continues to serve as Chairman of the Board since April 2015, having previously served as CEO from February 2013 to March 2014. Meanwhile, Mr. Sharik Bashir, who had been an Executive Director since March 2020, has been elevated to Chief Executive Officer, while Mr. Nadeem Maqbool, after serving as CEO since January 2020, has transitioned to a Non-Executive Director role on the Board. This leadership transition represents a notable governance development since the previous review and is reflected in the updated Management Team.

The Board's oversight continues to be exercised through three dedicated committees, namely Investment, Audit, and HR & Remuneration, ensuring effective monitoring of operations. Minutes of these proceedings are diligently maintained, reflecting operational transparency.

The external auditor’s BDO Ebrahim & Co. gave an unqualified opinion on the financial statements for the year ended CY25. The firm is QCR rated and is on SBPs panel of auditors in the category 'A'.

The Company continues to maintain clear reporting lines, with Sales and Operations kept separate. Sales remains divided into North and South Zones, each overseen by an executive director; Operations comprises six departments: Underwriting and Risk Management, Claims, Corporate Services, Finance, IT, and HR.

Following the CEO transition noted under Governance, the management team is now led by Chief Executive Officer Mr. Sharik Bashir. Key corporate and control functions are headed by Mr. Farhan Ali Salim as Chief Financial Officer, Mr. Fariq M.K. Rohilla as Company Secretary, Mrs. Niina Afridi as Compliance Officer, and Mr. Rao Ali Zeeshan as Head of Internal Audit. Operational and core business lines are overseen by Mr. Ali Asgher Bhojani as Head of Operations, Mr. Amir Hassan as Head of Marketing, Mr. Hasan Mustafa as Head of Claims, Mrs. Kiran Parveen as Acting Head of Underwriting, and Mr. Ali Muhammad as Acting Head of Reinsurance.

The Company continues to operate through four management committees, namely Claim Settlement, Underwriting, Risk Management & Compliance, and Reinsurance & Coinsurance, consisting of departmental heads who convene monthly to review performance and address operational matters.

To strengthen its Management Information Systems, information security, and digital capabilities, the Company has undertaken several key initiatives that mark a notable improvement over its previously basic setup. On the infrastructure and continuity front, it has migrated to Microsoft Office 365 for secure cloud collaboration and transitioned selected systems to cloud platforms to enhance scalability, availability, and disaster recovery. Core operations and customer touchpoints are also being modernized through a structured IT Service Management ticketing system to streamline support, alongside the ongoing integration of an online payment gateway with the Travel Insurance Portal to enable secure payments and seamless digital policy issuance.

The claims process continues to require approval from the Head Office/Zonal Office, while claim reporting is handled by the respective branches attending to the claim. No change to this process was evidenced for this review.

The Investment Committee, comprising Independent Directors, the CEO, and the CFO, continues to oversee the approval of new investment strategies and policy frameworks.

The Company's Risk Management Framework continues to define underwriting and reinsurance guidelines and the roles and responsibilities of all stakeholders from the Board to support staff.

Pakistan's General Insurance sector recorded robust growth in CY25, with Gross Premium Written (GPW) rising 11.4% YoY to PKR245.2bln (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. Motor insurance penetration is also expected to benefit going forward from the Sindh government's landmark move — supported by the SECP — to make third-party motor liability insurance mandatory for all registered vehicles under the Provincial Motor Vehicles (Amendment) Act, 2026, with active policies in the province surging over 1,374% (from ~11,200 in March 2026 to ~165,064 by June 2026) following enforcement; SECP is now working with Punjab and other provinces to replicate the framework nationally. However, sector-wide underwriting performance weakened, with the combined ratio slipping to 101.5%, driven largely by elevated claims within the Takaful segment, while the marine segment came under additional pressure from a sharp rise in war-risk premiums amid escalating Middle East tensions (including the Iran-Israel-US conflict and Strait of Hormuz disruptions), which pushed up reinsurance costs and cargo/hull war cover rates well above pre-conflict levels. This left investment income (up 10.4% YoY to PKR 43.5bln) as the principal profit driver for the sector.

Premier Insurance remains categorized among small players, with a market share of less than ~1% of industry GPW as of CY25.

The Company's GPW increased to PKR 844mln in CY25 (CY24: PKR 731mln), up 15.4% YoY. Per PACRA's ratio analysis, this was driven by a sharp pickup in the Takaful book, whose GPW growth rate registered ~44.9% in CY25 (CY24: 26.7%), while the conventional book posted modest growth of 1.6% (CY24: 3.5%), consistent with the Company's ongoing shift of new business toward its Window Takaful Operations amid the broader industry transition described above. Premium/Contribution Earned rose to PKR 708mln (CY24: PKR 622mln), and Net Insurance Premium & Takaful Contribution increased to PKR 419mln (CY24: PKR 374mln), aided by Wakala Fee income of PKR 102mln (CY24: PKR 71mln) that is specific to the Takaful operation. Going forward, the pace and completion of the Company's conventional-to-Takaful transition will be a key variable for revenue trends.

Underwriting performance improved, with the underwriting loss narrowing to PKR 135mln in CY25 (CY24: loss of PKR 172mln), even as net claims expense rose to PKR 333mln (CY24: PKR 270mln, +23%). The improvement was supported by a decline in net commission and other acquisition costs to PKR 5mln (CY24: PKR 27mln) and broadly stable management expenses of PKR 318mln (CY24: PKR 321mln). Investment income of PKR 251mln (CY24: PKR 228mln) supplemented underwriting performance, enabling the Company to report Profit After Tax of PKR 105mln in CY25 (CY24: PKR 68mln), an increase of ~54%, and Return on Equity of 8.2% (CY24: 6.1%). Going forward, profitability will remain sensitive to claims development in the shrinking conventional book and to equity-market-linked investment returns.

The Company's investment book grew to PKR 1,864mln as of CY25 (CY24: PKR 1,762mln), remaining concentrated in Equity Instruments (~43% of investments) and Subsidiaries/Associates (~33%). Investment income grew to PKR 251mln (CY24: PKR 228mln), driven by a surplus on revaluation of investments of PKR 223mln (CY24: PKR 155mln) amid buoyant equity market conditions, alongside dividend income of PKR 57mln (CY24: PKR 61mln). Investment yield remained healthy at 13.9% (CY24: 14.3%). The outlook for investment performance remains linked to equity market conditions and hence carries an element of volatility.

Going forward, the management envisages sustaining the ongoing strategy whilst being prudent in its approach when underwriting the business. They plan to raise capital to meet the new Minimum Capital Requirement (MCR), an initiative that will require significant support from the group to ensure successful compliance and reinforce the company's financial stability. The assigned rating is contingent on the successful implementation of these strategic projections and the Company's ability to meet its MCR target.

Net claims expense rose to PKR 333mln in CY25 (CY24: PKR 270mln, +23%); however, claims outstanding days improved markedly to 488 days (CY24: 741 days), reflecting a faster claims-settlement turnover despite the higher claims cost. Going forward, claims development in the run-off conventional book bears monitoring.

Premier Insurance arranged its CY25 conventional-book reinsurance panel primarily through AON, MNK Re, and Lockton. The panel is anchored by Saudi Reinsurance Company, which holds an AM Best rating of A- and accounts for roughly 30% across most treaties. Other key participants include SMGA (A-, 15%), Sava Re (A, 10%), Labuan Re (A-, 10%), and Mekong (Fitch BB+, 15%), alongside smaller allocations with Arab Re (B+, 10%), SOPAC (B+, 5%), Kenya Re (B, 2.5%), and Pakistan Reinsurance Company Limited (AA, 2.5%). Separately, the Window Takaful Operations are covered by a distinct panel led by Labuan Reinsurance (L) Limited, Malaysia (A-) with a 50% share across Fire, Engineering, Marine, and General Accident treaties. The remaining takaful capacity is distributed among Saudi Re (A-, 20%), Kenya Re (B, 20%), and Arab Re (B, 10%).

The liquidity coverage for provisions of outstanding claims (including IBNR) improved further to 1.6x as of CY25 (CY24: 1.5x), reflecting a comfortable buffer against short-term obligations. Going forward, the Company's liquidity position is expected to remain adequate to meet its short-term commitments.

The Company's equity base grew ~6% to PKR 1,316mln in CY25 (CY24: PKR 1,241mln), driven by profit retention, despite accumulated losses standing at PKR (895)mln (CY24: PKR (1,000)mln). As discussed under Sustainability, the Company's capital adequacy going forward remains dependent on successful execution of a capital plan to meet the enhanced Minimum Capital Requirement of PKR 2,000mln for non-life insurers.