PACRA Maintains IFS Rating of TPL Insurance Limited

Pakistan's general insurance industry has a total size of PKR 166bln during 9MCY23 (9MCY22: PKR 113bln), exhibiting a growth of ~47%, in terms of Gross Written Premium (GWP). The industry reported a growth of ~266% in underwriting results (9MCY23: PKR 9.9bln, 9MCY22: PKR 2.7bln). The net income of the industry also experienced an increase of ~170% to PKR 20bln during 9MCY23 (9MCY22: PKR 7.4bln). The industry's overall outlook remains stable with substantial liquidity available with players.
The IFS Ratings of TPL Insurance Limited ('TPL Insurance' or 'the Company') is driven by stable position in the relevant universe. Effective governance framework and managerial practices has maintained a controlled environment. Overall growth of the Company remain stagnant due to restricted growth (~7%) in GWP, backed by value uptick. Major (~67%) contribution in GWP is shown by motor segment, followed by fire & property (~16%), accident and health (~12%), miscellaneous (~4%) and marine & transport (~2%) segments. The Company booked underwriting losses due to higher claims and few one off managerial expenses. Bottomline gathers support from investment income. Lately, the merger of New Hampshire Insurance Company with and into the Company is expected to support the overall performance of TPL Insurance, going forward. However, contingencies of the merged company needs to be addressed so as to reap the benefit of this transaction. On the financial risk front, the Company holds adequate liquidity; however, higher claims stress the efficiency. The Company works with an adequately rated panel of reinsurers (enhanced treaty limits); along with holding an adequate equity base.
The rating is dependent upon the Company's ability to diversify its revenue stream. The inclusion of the foreign partners is expected to provide oversight and remains imperative to the overall risk profile of the Company. Prudent management of business and financial risk remains crucial for the ratings. Considerable challenges on the financial performance and position of the Company requires attention.

About the Entity
TPL Insurance Limited ('TPL Insurance' or 'the Company') was incorporated in 1992 as a public listed concern. The principal activity includes managing non-life insurance through Conventional and Window Takaful in Fire and Property, Marine and Transport, Accident and Health, Motor and Miscellaneous segments.
Major stake (~53.6%) is owned by the Sponsors through Associated companies, with prominent shareholding held by TPL Corp Limited (~52.87%) and TPL Holdings owns (~0.6%) share of the Company. Foreign companies hold ~32.9% stake in the Company, with prominent shareholding held by DEG - Deutsche lnvestitions- und Entwicklungsgesellschaft mbH (~15.87%), whereas Finnish Fund for Industrial Cooperation Ltd. holds ~17.02% stake. The remaining stake is held by Banks, DFI & NBFI, mutual funds and individuals.
The Company's Board is chaired by Mr. Jameel Yousuf. While, Mr. M. Aminuddin serves as the CEO. He is assisted by a team of experienced professionals.