PACRA Maintains IFS Rating of IGI Life Insurance Limited

Pakistan's Life Insurance market is dominated by the public sector (~66.6% share as of Dec-23), while the private sector holds only ~33.4% share. The sector players have shifted their focus from first-year persistency to subsequent years, prioritizing Gross Premium (GPW) growth. During CY23, overall GPW showed a YoY growth of ~7.69%. Out of the total, ~46.58% of the GPW pertains to renewals, followed by group life without cash value (~37.2%). Net Premium also showed a YoY increase of ~7.39%. As policy maturities and surrenders have largely trickled in, net claims grew by ~31%. To adapt, the industry holds a substantial investment book (CY23: PKR 2,021bln, CY22: PKR 1,747bln) stabilizing the overall outlook.
IGI Life Insurance Limited (‘IGI Life’ or ‘the Company’) rating derives comfort from association with Packages ('the Group'). The Company holds a strong governance framework. IGI Life has revamped its overall portfolio to optimize its risk profile by selectively reducing the loss making business avenues. The Company seemed able to hold its surrenders significantly along with clearing the claims. The Company reported second-year persistency at ~81%, while first-year's persistency stood at ~62%. During CY23, the Company reported a growth of ~32% in GPW. The Company further plans to improve its underwriting portfolio. IGI Life achieved profits from core operations. This along with managing a healthy investment portfolio, with ~63% allocated to government securities, contributes significantly to the Company's overall profits. Comfort is drawn from IGI Life's strong risk absorption capacity, represented by sufficient liquidity and considerable equity standing.
The rating is dependent upon sustained improvement in the business and financial risk profile, in line with its relative positioning. Concurrently, improved equity and liquidity profile should be maintained, to cushion the policyholder's liabilities. The performance of 'Vitality' remains essential.

About the Entity
IGI Life Insurance Limited (‘IGI Life’ or ‘the Company’), a public listed company, listed on the Pakistan Stock Exchange, started its operations in May-95. The Company operates a life insurance company.
IGI Holdings holds the majority stake in the Company (~82.69%), whereas the remaining shareholding is distributed between a consortium of institutions, individuals and directors & related parties. IGI Life’s Board is chaired by Mr. Shamim Ahmad Khan, while Mr. Ali Nadim is the CEO of the Company. He is assisted by a team of experienced professionals.