PACRA Maintains IFS Rating of Askari Life Assurance Company Limited

The life insurance sector in Pakistan remains largely dominated by public-sector insurers, accounting for ~61% of the market as of Dec-24, with private companies covering the remaining ~39%. During CY24, the industry recorded a Gross Premium Written (GPW) of ~PKR 434 bln, marking a healthy ~7% YoY increase from ~PKR 404bln in CY23. Net claims edged up slightly to ~PKR 374bln (from ~PKR 366bln), reflecting sustained claims activity. The sector’s profitability gathered support from a robust investment income of ~PKR 467bln, up ~60% from ~PKR 292bln, driving Profit After Tax (PAT) to ~PKR 23bln, up from ~PKR 20bln in the previous year. The industry's total investment portfolio also expanded, reaching ~PKR 2,518bln from ~PKR 2,027bln YoY. The overall outlook remains stable, underpinned by favorable underwriting metrics and continued strength in investment returns.
Askari Life Assurance Company Limited ('Askari Life' or 'the Company') draws considerable strength from its affiliation with the Army Welfare Trust (AWT). The Trust holds a broad and diversified business portfolio encompassing its established role in the insurance sector through Askari General & Life Insurance companies. Askari Life offers a range of products from savings and family protection plans to tailored health and life insurance coverage, strengthened through bancassurance and takaful collaborations. During CY24, Askari Life achieved ~25% growth in GPW, largely fueled by strong renewal and group business, despite a softening in first-year sales amid constrained consumer spending. Its first-year persistency remained subdued at ~66%, while renewal persistency held firm at ~68%. The underwriting landscape improved as the combined ratio showed signs of normalizing; however, high acquisition costs continued to exert pressure. Investment income provided partial offsetting support. The Company has lately reported a net profit of PKR 15mln in CY24; however, equity remains stretched. On the financial risk front, Askari Life maintains a stable liquidity buffer, supported by a stable equity position of ~PKR 509mln. Looking ahead, a strategic pivot is necessary. Efforts to meet the regulatory capital adequacy requirements will strengthen the Company's financial risk profile. The Company must reduce operational and acquisition expenses and bolster its first-year sales to restore profitability and equity. Consistent efforts towards digitization and bancassurance expansion, backed by the AWT’s institutional and governance support, can enhance distribution efficiency and help reclaim valuation and market standing.
Sustained improvement in the business and financial risk profile of the company in line with their relative positioning in the industry remain vital to the rating. The liquidity profile should continue to cushion the policyholder's liabilities.

About the Entity
Askari Life Assurance Company Limited (“Askari Life” or “the Company”), formerly known as East West Life Assurance Company Limited, is listed on the Pakistan Stock Exchange and commenced operations in Feb -93.
The Army Welfare Trust (the Trust) holds a majority of the shareholding (~66.6%), followed by East West Insurance Company (~19%), while the rest of the shareholding is vested with individuals and directors. The Company’s Board is chaired by Lt Gen. Nauman Mahmood (R.), while Mr. Jhanzeb Zafer is the CEO of the Company. He is assisted by a team of experienced professionals.