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The Pakistan Credit Rating Agency Limited
Press Release

Date
09-Dec-21

Analyst
Wajahat Arjumand Ansari
wajahat.ansari@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains IFS Rating of Habib Insurance Company Limited

Rating Type IFS
Current
(09-Dec-21 )
Previous
(09-Dec-20 )
Action Maintain Maintain
IFS Rating A+ A+
Outlook Stable Stable
Rating Watch - -

Habib Insurance Company Limited (HIC or the Company), an associated Company of the Habib Group, provides general insurance (Conventional & Takaful) service provider, operating through five core segments, namely; i) Fire & Property ii) Marine & transport iii) Motor iv) Group Hospitalization v) Miscellaneous. Further, the Company benefits from synergy created through group entities, ultimately, channeled through its sponsor group (Habib Group of Companies). The economy revival post COVID-19 picked up the industrial activity, with large scale manufacturing benefitting from the upsurge through bolstered demand for the corporate sector, positively scaling the overall insurance demand. Further, emerging auto policies are expected to provide a boost to the motor insurance business in the industry prospectively. In line with the economy trend, the positive developments instigated relative GPW growth for HIC, particularly within the fire segment and motor segment, boosting the topline of the Company to PKR 1,422mln for the period ended 9MCY21 (CY20: PKR 1,658mln; CY19: PKR 1,620mln). Enhanced topline, combined with moderate claims and expense management resulted in underwriting results of PKR 94mln for the period ended 9MCY21 (CY20: PKR 121mln; CY19: PKR 101mln). Product innovation and elongated market outreach, capitalizing on the Habib group, bodes well for HIC’s business profile. A stable investment performance sourced through prime equity investments provided a reliable dividend income stream, contributing PKR 89mln, composing 68.5% of the total investment income, with additional support derived from investment capital gains. The rating acknowledges HIC's corporate strategy to increase its position on the market by prudent underwriting practices while focusing on bottom-line growth. The financial risk matrix remains adequate, with skewed profile of investment book towards liquid equity investments and secured government securities, along-with a sufficient equity base, providing comfort to the liquidity of HIC.
The rating is based upon sponsor profile and relative position of Habib Insurance Company in the general insurance industry. The future prospects of the Company will require further improvements in business size, underwriting profitability and investment income. As the company grows, the liquid profile must be enhanced.

About the Entity
Habib Insurance Company, part of Habib Group, was incorporated as a Public Limited Company in 1942. It is listed on Pakistan Stock Exchange with a trading symbol of “HICL”, and operates through a nationwide network of 17 branches. Habib Insurance Company is majorly owned by Habib Group, which is one of the renowned and well established groups of the country, having exposure in industrial and financial sectors.
The overall control of the company vests in the Board of Directors, structured with nine BoD members. It includes five non-executive directors, three independent directors and one executive director. Mr. Shabbir Gulamali, is the CEO of the Company. He possesses over two decades of experience in insurance industry majorly served within Habib Group of Companies.

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.