PACRA maintains IFS Rating of Pak-Qatar Family Takaful Limited

Pakistan's Life Insurance market is dominated by the public sector (~66.2% share as of Dec-23), while the private sector holds only ~33.8% share. The sector players have shifted their focus from first-year persistency to second-year, 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.
Pak-Qatar Family Takaful Limited ('Pak-Qatar' or 'the Company') derives strength from its Sponsors and robust market position. The Company has a strong foothold in the takaful segment of life insurance sector. Pak-Qatar has demonstrated steady market share retention, ensuring stability in premium income, while capitalizing on its substantial investment portfolio. During CY23, the Company reported a ~59% growth in GPW, significantly supported by its competitive product - Mahana Bachat Plan. This growth enhanced its overall market share to ~4% during the period, from ~2.7% during CY22. The Company needs to enhance its market share to effectively compete with its peers of similar rating. Pak-Qatar's first-year persistency rate remained relatively weak at ~58%. The Company has significantly enhanced its underwriting performance, reporting an uptake of ~190% backed by disciplined underwriting practices and effective business operations. Further support from strong investment income, primarily (~88%) attributed to revaluation gains on Company investments. During CY23, the Company reported a decline in net profitability due to significant reserve built for the policyholders. This remains on the lower end within the life insurance industry. The Company benefits from its association with FWU, a Germany based firm, in the form of technical partnership, as the sponsors provide synergic benefits. Comfort is drawn from Pak-Qatar's strong risk absorption capacity represented by sufficient liquidity. The Company holds a stable equity base.
The rating takes comfort from the ability of the Company to capitalize on the market share whilst sustaining the performance. Maintaining the surplus in takaful fund and liquidity position is essential. while continuing to focus on improving profitability.

About the Entity
Pak-Qatar Family Takaful Limited (‘Pak-Qatar’ or ‘the Company’), a dedicated family takaful provider, began operations in 2007 as an unlisted public company and operates through a network of more than 160 branches.
Major ownership is vests with Mr. Said Gul and his affiliated entity (~38.8%), alongside H.E. Sheikh Ali Bub Abdullah Al-Thani and Associated Institutions (~31.9%) and FWU AG, a technical partner based in Germany (~15.2%). The remaining stake is distributed among various individual investors (~14.9%). The Board is chaired by H.E. Sheikh Ali Bin Abdullah Al-Thani, a member of the Qatar Royal Family. Mr. Waqas Ahmad, appointed as the CEO in Mar-24, is support by an experienced team.