PACRA Upgrades IFS Rating of Adamjee 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.
Adamjee Life Assurance Company ('Adamjee Life' or 'the Company') has secured ~7.1% of the market share in CY24, emerging as a mid-sized player. This success is the direct result of a strategic bancassurance partnership, since the early years of the Company's operation, with MCB Bank, which is one of the largest private sector bank in the country, and steady progress towards maturity of the Company's direct sales force distribution model. The Company's bancassurance business with MCB Bank & other banks generated ~55% of the new regular premium business for the Company, and has significantly improved the Company’s distribution efficiency and reach. The increase in renewal premiums also indicates stronger client retention and persistency. As a result, GPW grew by ~33% largely driven by single premium products, which now account for ~55% of GPW. Disciplined underwriting practices have led to a healthy underwriting surplus, and this, combined with strong investment income, led to net profit after tax of ~PKR 1.55 bln, a significant jump from ~PKR 908 mln in CY23. Consequently, Earnings per share (EPS) climbed sharply to PKR 6.22 per share, up from PKR 3.63 per share. With active oversight from the Nishat Group via Board representation, the Company's governance and strategic direction remain strong. Looking forward, the Company is well-positioned for continued profitability. Prudent management of the investment portfolio and the steady, recurring business from its bancassurance channel has added the requisite cushion. PACRA upgrades Adamjee Life's IFS rating, backed by solid liquidity and a high-quality investment book that strengthens the Company's ability to manage risk and seize new opportunities. This, along with the Company's ability to enhance its equity base as per SECP's regulation of PKR 3bln, remains pivotal.
The rating primarily depends on the Company's enhanced competitive positioning. Alongside this, sustained improvement in core and operational profitability is essential to maintaining the rating. Additionally, the Company's solvency profile, as reflected by its reserves, must remain robust at all times. Prudence in risk management, particularly when expanding through the agency model, remains a key consideration.

About the Entity
Adamjee Life Assurance Company Ltd. ('Adamjee Life' or 'the Company') is a public listed company and has floated its shares with a trade symbol of “ALIFE” on the PSX. The Company was initially incorporated as a public unlisted company in Aug-08. The Company commenced its business in Apr-09 and became a listed concern in Mar-22. Adamjee Life operates in both conventional and takaful businesses, offering a number of life insurance schemes.
The Company is a subsidiary of Adamjee Insurance, with ~83.5% shareholding. The rest of the shareholding resides between associated companies, modarabas, and the general public. Recently, Mr. Umer Mansha has been appointed as the Board's Chairman effective 30-Apr-25. While Mr. Manzar Mushtaq heads the Company as the CEO. They are assisted by an experienced team of professionals.