PACRA Maintains IFS Rating of Pak Qatar General Takaful Limited

In terms of Gross Written Premium (GWP), the general insurance industry has a total size of PKR 166bln in 9MCY23 compared to PKR 113bln in 9MCY22, exhibiting a growth of ~47%. The industry reported a growth of ~266% in underwriting results to PKR 9.9bln in 9MCY22 (9MCY22: PKR 2.7bln). The net income of the industry also experienced an increase of ~170% to PKR 20bln in 9MCY22 (9MCY22: PKR 7.4bln). The industry experienced a period without significant claims, contributing to the overall positive performance reported by the entire sector.
The assigned ratings of Pak-Qatar General Takaful Limited (“Pak Qatar” or “the Company”) incorporates its standing as one of Pakistan's pioneering dedicated takaful companies. The Company demonstrates robust business acumen, strengthened by its strategic associations with Qatar-based financial institutions. Additionally, its affiliation with Pak-Qatar Family Takaful, a sister concern, adds a complementary dimension to its overall strategic standing. Currently, the Company holds a stable market position amidst intense competition from sole takaful and window takaful operations. Pak Qatar has demonstrated a consistent upward trend in its topline, driven primarily by value. The Company relies significantly on Motor and health segments to keep a high cash influx while slowly expanding its other segments. The management has devised a strategy under the new leadership to pivot the health portfolio towards the retail segment, with the goal of ensuring a more favorable loss ratio. Further, proactive efforts have been launched to capitalize on synergies through cross-selling opportunities with sister concerns. The Company's investment portfolio, non-discretionary Separately Managed Account (SMA), posted growth and is managed by Pak Qatar Asset Management Co., a recent initiative of the group in the asset management space. Going forward, the Company intends to strengthen its presence in the motor segment through a strategy revamp towards the dealership networks. Moreover, plans to expand into the fire segment, with the overarching goal of achieving a more robust and balanced portfolio mix. On the financial risk front, the liquidity profile remains stable with an effective claim management system. However, the equity base needs to be strengthened.
The rating is dependent on the management’s ability to cohesively execute its business plan. Also, improvement in market share and underwriting profitability are considered vital. Meanwhile, prudent management of premium receivables from corporate customers is essential. Moreover, the implementation of real-time IT infrastructure along with an upgraded MIS should, among others, strengthen the claims management system.

About the Entity
Pak-Qatar General Takaful Limited (“Pak Qatar” or “the Company”) is an unlisted public limited incorporated in 2006, started operations in 2007. H.E. Sheikh Ali bin Abdullah Al-Thani, a member of Qatar's Royal Family, sponsors the company with ~41.8% stake, while Mr. Said Gul, a Pakistani businessman in Qatar, holds ~48.3% stake through direct and indirect ownership.
H.E. Sheikh Ali, a member of Qatar's Royal Family, has served as the chairman of Pak-Qatar General Takaful since its establishment in 2007. The Chief Executive Officer is Mr. Zahid Hussain Awan, supported by a capable management team.