PACRA Maintains IFS Rating of Alfalah Insurance Company Limited

Alfalah Insurance Company Limited (‘Alfalah Insurance’ or ‘the Company’) ratings reflect its association with Abu Dhabi Group and Bank Alfalah Limited (BAFL). Alfalah Insurance is a non-life insurance company offering conventional and takaful insurance, where conventional business constitutes the majority (~86%) of the Company’s operations. The rating takes comfort by the Company's healthy financial profile, supported by robust business volumes, and a substantial income stream from its investment book generating consistent profitability. During CY23, the Company reported a slight decline in its topline due to loss of business in the health portfolio. However, the Company has almost recovered from the downturn experienced during the beginning of the year. The Company reported a growth of ~37% in its underwriting profits, despite a decline in business, due to support obtained through positive acquisition costs. Going forward, the Company aims to increase its overall portfolio, which will further strengthen underwriting profitability. The synergies with BAFL, one of the largest private banks in Pakistan, has positively influenced business volumes. Business volumes through the non-captive side have shown consistent growth over the years. This further strengthens the diversification of the topline into smaller segments, along with providing stability. The Company's substantial involvement in window takaful operations also supports the topline. Additionally, the Company's robust investment income contributes significantly to the overall strength of the bottom line. Enhanced liquidity and sound cash flow generation add further strength to the Company's financial position. Alfalah Insurance has demonstrated its commitment to the Shareholders by paying dividends, highlighting its financial stability. The presence of internationally recognized and highly rated reinsurance provides support to the Company's risk management framework. The rating also takes into account the Company's effective corporate governance practices and the presence of an experienced management team that has been associated with the Company since its inception.
The assigned rating is dependent on the Company's ability to augment its market position within the competitive landscape while maintaining strong underwriting performance. It remains crucial that the Company strengthens its liquidity profile and exercise prudent management of claims and receivables.

About the Entity
Alfalah Insurance Company Limited (‘Alfalah Insurance’ or ‘the Company’), commencing business in Sept-06, is engaged in providing non-life insurance services. The sponsoring family (Al Nahayan) owns ~60% stake, with H.H. Sheikh Nahayan Mabarak Al Nahayan holding a majority stake of ~40% of the Company. Institutional investors, such as Bank Alfalah Ltd. (~30%) and M/s Electromechanical Co. LLC (~10%) holds the remaining stake.
Alfalah Insurance's seven-member Board, including the CEO, is chaired by H.H. Sheikh Nahayan Mabarak Al Nahayan. The CEO, Mr. Abdul Haye, is assisted by a team of professionals.