PACRA maintains IFS rating of The United Insurance Company of Pakistan Limited

The assigned ratings of The United Insurance Company of Pakistan Limited (“United Insurance” or “the Company”) reflect its strong presence in the insurance industry. Moreover, prudent managerial practices ensure quality and control standards. United Insurance's GPW posted growth (~18%) during CY23, reporting at ~PKR 10bln (CY22: ~PKR 8.5bln), primarily driven by its conventional portfolio (~78%). Takaful business was envisioned to gather support once M/s SPI Insurance Company Limited (SPI) was merged with and into the United Insurance. However, this requires further effort and commitment. Currently, the major contribution of ~48% in the GPW stems from the miscellaneous segment (including hospitalization, travel, and bond business), followed by crop insurance contributing ~18% to the overall GPW. Going forward, the Company banks on its ever-growing crop insurance segment to gather further support and capture the market. This along with stable footing in motor and health segments, holds the Company's underwriting results. However, higher outstanding claims highlight depedence on liquidity; though a bulk of it is receivable from reinsurance. The combined ratio stood at (~77.8%). The investment book, majorly comprising government securities and cash & bank balances, reported an uptick in income of ~20% during CY23. Thus supplementing the Company’s overall bottom line. The divestment from APNA Microfinance Bank has had an impact Company's standing. On the financial risk front, the Company holds a robust panel of reinsurers along with a strong equity base. However, liquidity needs to be enhanced. Moreover, a successful and timely materialization of the Company's envisioned plans to diversify into real estate and in life insurance business remains imperative to the ratings.
The ratings are dependent upon the envisaged plan of sustaining its relative positioning and its control environment. Continued generation of internal capital, enhancement of liquidity and opening of new venture (The United Life Assurance) in near future is considered essential.

About the Entity
The United Insurance, established in 1959, is listed on the Pakistan Stock Exchange. The principal activity includes managing non-life insurance through Conventional and Window Takaful in Fire and Property, Marine, Accident and Health, Motor and Crop segments.
Major stake of the Company lies with the United International Group ~89.3% of shares, whereas the remaining stake is held by individuals and Institutions (~10.7%). The Company's Board is chaired by Mr. Jamil Ahmed Khan; while Mr. Muhammad Akram Shahid serves as the CEO. He is assisted by a team of professionals.