PACRA Maintains IFS Rating of State Life Insurance Corporation of Pakistan

The life insurance sector is primarily dominated by the public sector, holding ~61% market share during CY24, while the private sector accounts for around 39%. The industry’s Gross Premium Written (GPW) stood at ~PKR 434 bln during CY24 (CY23: ~PKR 404 bln), reflecting a YoY growth of ~7%. Net Premium amounted to ~PKR 425 bln in CY24 (CY23: ~PKR 398 bln), also showing a YoY increase of ~7%. On the claims side, Net Claims stood at ~PKR 374 bln in CY24 (CY23: ~PKR 366 bln). The industry's bottom line was supported by robust investment income of ~PKR 467 bln during CY24 (CY23: ~PKR 291.5 bln), representing a YoY increase of ~60% which was primarely due to increased policy rates during CY24 as most of the investment is made in Govt. securities, which contributed to improved Profit After Tax (PAT) of ~PKR 23 bln in CY24 (CY23: ~PKR 20 bln). The total investment portfolio of the insurance industry stood at ~PKR 2,513 bln as of CY24 (CY23: ~PKR 2,027 bln). Going forward, the overall outlook for the industry remains stable.
State Life Insurance Corporation of Pakistan (“State Life” or “the Corporation”), a Government of Pakistan (GoP) owned life insurance organization, derives strength from its substantial market share of ~61%. The Corporation is considered to have the most effective agency model that penetrates well into the life insurance market. During CY24, State Life's Gross Premium Written (GPW) slightly decreased by ~1.3%, primarily due to a decrease in group premiums. The Corporation's diverse and innovative product offerings, coupled with operational excellence, have resulted in strong customer trust, as reflected in its robust persistency ratios. Second-year persistency stands at ~84% with a renewal persistency of ~90%. However, due to lower claims, the Corporation reported an underwriting profit. This was primarily driven by lower claims due to reviving economic conditions. State Life's loss ratio reduced to ~86%, impacting the combined ratio (~106%). The comfort is derived from State Life's strong risk absorption capacity, supported by sufficient liquidity and the overall quality of its investment portfolio, along with the Government of Pakistan's (GoP) guarantee for policyholders' liabilities. Experienced management team adds comfort to the overall rating; however, State Life must revamp its digital strategy to remain alongside the evolving requirements.
State Life's ability to maintain its leadership in the life insurance sector is important. Successful execution of envisioned strategies: including diversification and continued growth remains essential. Additionally, implementation of new ERP system will enable efficient business operations with the real time provision of services to all stakeholders

About the Entity
State Life Insurance Corporation of Pakistan ("State Life" or "the Corporation") was incorporated in Nov-72. Currently, the Corporation operates through a widespread sales network throughout Pakistan and also holds presence in Middle East. The Corporation is the largest Life Insurer in Pakistan with ~61% market share.
The Corporation is governed by the Government of Pakistan (GoP) through the Federal Ministry of Commerce. The Board is Chaired by Mr. Suleiman S Mehdi, while Mr. Shoaib Javed Hussain is the CEO. He is assisted by a team of experienced professionals.