Asia Insurance Company Limited

CREDIT RATING REPORT | Aug-25

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Rating History
Dissemination Date IFS Rating Outlook Action Rating Watch
22-Aug-25 A++ (ifs) Stable Maintain -
23-Aug-24 A++ (ifs) Stable Maintain YES
25-Aug-23 A++ (ifs) Stable Maintain YES
26-Aug-22 A++ (ifs) Stable Maintain -
31-Mar-22 A++ (ifs) Stable Harmonize -
About the Entity

Asia Insurance Company Limited ('Asia Insurance' or 'the Company') was established in 1979 as a General Insurance Company and was listed on the Pakistan Stock Exchange. The Company operates a network of 28 branches across the country.
Mr. Ihtsham ul Haq Qureshi and family holds majority (~67.8%) stake in the Company. Whereas, InsuResilience Investment Fund (IIF) holds ~25.4% of the shareholding. The Company's Board is chaired by Mr. Ihtsham ul Haq Qureshi. While, the Company is led by Mr. Zain ul Haq Qureshi as the CEO. They are aided by a team of experienced professionals.

Rating Rationale

Pakistan's general insurance industry reached a total size of ~PKR 215bln in CY24, marking ~15% growth in Gross Premium Written (GPW) from the previous year. The sector's financial performance showed significant improvement, with underwriting results surging by ~180% to PKR 14bln. This positive trend was complemented by a ~51% increase in overall investment income, which reached PKR 37bln. Despite this strong growth, the industry's performance remains highly susceptible to prevailing economic conditions.
Asia Insurance Company Limited ('Asia Insurance' or 'the Company'), an established player in the non-life insurance market, offers both Conventional and Takaful products, with Conventional business making up ~90% of its operations. The Company's rating is characterized by its long-standing market position and a strategic association with the InsuResilience Investment Fund. This partnership, an initiative of the German Development Bank (KfW), not only provides requisite capital injection but also strengthens the Company's governance framework through nominee representation. Focusing on IT integration and new product development, Asia Insurance saw a modest GPW growth of ~2.3% in CY24, reaching PKR 1,380mln. Fire (~48.7%) and Marine (~17.1%) are the Company's largest GPW generating segments. The Company's net insurance premium grew by ~40%. Despite posting an improvement, the combined ratio remains comparatively high at ~96.8%. Consistency in the income from the core operations, along with an improved investment income of PKR 152mln (CY23: PKR 54mln), has helped the Company to achieve a net profit of PKR 174mln (~112% higher than CY23's net profit of PKR 82mln). The Company's financial risk remains a focus area, where equity has increased by ~14% to PKR 1,120mln. Though capital structure is considered adequate, a formal plan to enhance its core equity in line with SECP directives is pivotal for future stability. This, along with the support from an investment portfolio valued at PKR 1,012mln as of CY24, provides essential liquidity and a cushion against operational fluctuations. Holding an association with strong reinsurers bodes well for the Company. The Rating Watch has been removed after six consecutive quarters of underwriting profits, showcasing a stability in the Company's core operations.

Key Rating Drivers

The rating is dependent on continued growth in core business along with support from the investment side so as to enhance profitability. Sustaining underwriting profits will be crucial, going forward. This along with the preserving the liquidity needs attention. Sustaining the financial risk remains imperative to the rating.

REPORT CONTENTS
  1. Rating Analysis
  2. Financial Summary
  3. Rating Scale
  4. Regulatory Disclosure

Asia Insurance Company Limited

rating analysis

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Profile
Legal Structure

Asia Insurance Company Limited ('Asia Insurance' or 'the Company') was incorporated as a public listed company in Dec-79 as per Companies Act,1913 (now Companies Act, 2017). The Company is listed since 1982 and its shares are traded with a symbol of 'ASIC'on PSX.


Background

Asia Insurance officially began commercial operations in 1980. In 2002, the Company merged with Indus Insurance Company Limited to expand its business operations.The Company was granted a license in Aug-15 to operate as a "Window Takaful Operator," allowing it to offer general insurance products that comply with Islamic principles.International Investment: A significant milestone was the investment by the InsuResilience Investment Fund, which is managed by a Swiss-based company and funded by the German Development Bank KfW. This investment not only increased the Company's capital but also strengthened its governance.


Operations

The Company has focused on non-life insurance, including fire, marine, motor, agriculture, and other miscellaneous categories. Asia Insurance's operates through the head office loacted in Lahore and a network of 28 branches setup across the country. The Company's branch network includes specified branches with designated division for non-conventional avenues. Health, Travel and Agri insurance divisions are based in Lahore, while Auto insurance division is based in Karachi.


Ownership
Ownership Structure

Major shareholding of the Company (~67.8%) resides with Mr. Ihtesham ul Haq Qureshi and his family. While, InsuResilience Investment Fund holds ~25.4% of the shareholding. The remaining ~6.7% shareholding is held by the general public (~5.4%) and government holdings (~1.4%).


Stability

The ownership structure of the Company seems stable as majority stake is held by the sponsoring family with clear succession plan. Moreover, the stake held by a foreign fund further adds stability. 


Business Acumen

The Sponsors are well versed with industry and business dynamics. Mr. Ihtsham ul Haq, the driving force behind the business, started his career as an industrial engineer. Later on, he launched his own business in electrical and construction work by establishing Falcon Engineering. It is the main representative of FLSmidth of Denmark, one of the leading cement plant manufacturers in Pakistan.


Financial Strength

Mr. Ihtasham ul Haq has a number of varied businesses including the electrical and construction work business named Falcon Engineering. Moreover, sizeable investment in Asia Insurance comparative to other ventures, the Company has emerged as the core business. The Sponsors hold considerable financial footing to support the Company, if needed.


Governance
Board Structure

The Company's Board (BoD) comprises seven members; out of which two members are Independent Directors, four members are Non-Executive Directors, and one member is an Executive Director. Out of four Non-Executive Directors, one Director is a nominated by the InsuResiliance Investment Fund. The BoD holds gender dversity and considerable independance in the policy formation and decision making process. This bodes well.


Members’ Profile

The BoD’s Chairman, Mr. Ihtsham ul Haq, has establish and manage varies businesses in construction and software (CSoft). He ventured into the insurance industry by setting Indus Insurance. Nominee director of foreign investment fund, Mr. Thibaud Ponchon, adds quality of the BoD. All BoD members hold diverse skillset and knowledge which facilitates the decision making process.


Board Effectiveness

The BoD met 4 times during CY24 with majority attendance. Three BoD level committees, namely, Audit Committee (BAC), Investment Committee (IC) and Ethics, Human Resource & Remuneration Committee (E,HR&R) ensure the effective working of the BoD. BAC met 6 times during the year, while the IC and HR Committee met 4 times during the year with majority attendance.


Transparency

The External Auditors, M/S Ilyas and Co., has expressed unqualified opinion on financial statements of CY24. Previously, BDO Ebrahim & Co. were appointed as the external auditors of the Company. Both firms are QCR rated and are on the SBP's panel in Category 'A'.



Management
Organizational Structure

The Company operates through Operations-Underwriting and Reinsurance, Claims, Sales and Marketing, Finance and Accounts, I.T, and Human Resources and Administration function. Each functional head reports to the CEO, who then reports to the BoD. However, Heads of Internal Audit and HR function reports the BoD Audit and HR Committee, respectively.


Management Team

Mr. Zain ul Haq Qureshi, the CEO, has fourteen years of experience and was appointed to the role in 2020. Ms. Rafia Asraf, the CFO, brings in an experience spanning across 17 years. Overall, the management comprises experienced and qualified professionals. This bodes well for the Company.


Effectiveness

The management is supported by four management Committees: Underwriting, Re-insurance & Co-insurance, Claims Settlement and Risk Management & Compliance Committee. The management committees met 4 times during CY24. Meeting was well attended with minutes being formally drafted. 


MIS

Asia Insurance has developed an in-house, centralized, real-time Oracle-based operating system. Key MIS reports used by the management includes Monthly Business Summary Reports; segment-wise and branch wise premium written and collected report, segment-wise and agent wise premium in comparison with last year, and branch wise report on premium written and outstanding.


Claim Management System

The Company is working on a digitized claim system after which claims are filed giving a call to any branch across the country. The appointed surveyors are licensed by the SECP.


Investment Management Function

Asia Insurance has a formal investment policy statement (IPS), approved by Borad, providing fundamental guidelines and execution structure to the investment process at the Company.


Risk Management framework

The Company has implemented risk management policy which identifies major risks which may threaten the existence of the Company.


Business Risk
Industry Dynamics

Pakistan's general insurance industry reached a total size of ~PKR 215bln in CY24, marking ~15% growth in Gross Premium Written (GPW) from the previous year. The sector's financial performance showed significant improvement, with underwriting results surging by ~180% to PKR 14bln. This positive trend was complemented by a ~51% increase in overall investment income, which reached PKR 37bln. Despite this strong growth, the industry's performance remains highly susceptible to prevailing economic conditions.


Relative Position

Asia Insurance, a small sized player, holds a market share of less than~1%.


Revenue

During CY24, GPW reflected a growth of ~2.2%, reported at PKR 1,380mln compared to PKR 1,349mln in CY23. The major portion of GPW is driven by Conventional Business (~90%), with the remainder (~10%) from the takaful window. Fire and Property remain the main (~49%) GPW generating segment, followed by Marine (~17%). During 3MCY25, GPW posted ~1% growth and clocked in at ~PKR 336mln (3MCY24: ~PKR 331mln). Going forward, GPW is expected to gather momentum as the Company plans to change its segmental concentration. 


Profitability

The Company reported a profit after tax of PKR 174mln in CY24, posting an uptick of ~112% from PKR 82mln in CY23. This improvement was driven by positive underwriting results (CY24: PKR 31mln, CY23: PKR 15mln) and increased investment income (CY24: PKR 152mln, CY23: PKR 54mln). During 1QCY25, the Company earned a profit of PKR 27mln, compared to after tax of PKR 39mln in 1QCY24.


Investment Performance

During CY24, the Company’s investment book totals PKR 1bln, comprising term deposits (~ 63%), followed by equity instruments (~24%), government securities (~8%), investment property (~4%) and cash and bank balance (~2%)  (CY23: PKR 902mln). The Company reported an uptake in investment income, with PKR 152mln in CY24 compared to PKR 54mln in CY23, largely due to revaluation gains. Similarly, during 1QCY25, investment income stood at PKR 22mln (1QCY24: PKR 25mln).


Sustainability

Going forward, the Company envisions increase in its share and GPW, with a focus on innovation and development of new business channels as they forecast an increase in demand towards agriculture. Moreover, a focus on better margin generating segments remains important for the Company, going forward.


Financial Risk
Claim Efficiency

The claims outstanding days reduced to 207 as of CY24, compared to 274 days in CY23. The Company incurred claim expenses amounting to PKR 410mln in CY24, up from PKR 332mln in CY23. As at 1QCY25, claims outstanding days increased to 259, compared to 296 days in 1QCY24. Claim expenses remained relatively stable at PKR 76mln in 1QCY25, compared to PKR 68mln in 1QCY24.


Re-Insurance

Asia Insurance has reinsurance arrangements with Hannover Re ('AA-' by S&P), Kuwait Re ('A-' by A.M Best), Swiss Re ('AA-' by S&P), Tunis Re (“AA” by Fitch), Saudi Re (“A-”by S&P), BMI Re (“A-” by A.M. Best) and Kenya Re (“A-” by A.M Best). These arrangment bodes well for the Company's risk writing ability.


Cashflows & Coverages

The majority of investment book is invested in liquid avenues to strong arm the liquid profile of the Company. The liquid investment book reported at PKR 972mln as at CY24 and PKR 972mln in 1QCY25 (CY23: PKR 861mln and 1QCY24: PKR 861mln). The liquid investment to Net Insurance Claims coverage improved owing to the uptake in the liquid investment book. The coverage reported at 2.5x as at CY24 and 2.2x as of 1QCY25 (CY23: 2.7x and 1QCY24: 3.9x). 


Capital Adequacy

The equity base reflected an uptake of ~14% as at CY24 reported at PKR 1,120mln (CY23: PKR 982mln). The equity base further enhanced to PKR 1,146mln as at 1QCY25 reflecting healthy uptake (1QCY24: PKR 1,021mln). Though capital structure is considered adequate, a formal plan to enhance its core equity in line with SECP directives of enhancing the equity level to ~PKR 2bln is pivotal for the Company's stability.
 
 

Aug-25

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Asia Insurance Company Limited

financial summary

(PKR mln)

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Mar-25
3M		 Dec-24
12M		 Dec-23
12M		 Dec-22
12M
Management Audited Audited Audited
A. BALANCE SHEET
1. Investments 1,007 1,012 902 856
2. Insurance Related Assets 1,278 1,132 936 941
3. Other Assets 332 351 314 298
4. Fixed Assets 168 178 156 185
5. Window Takaful Operations 0 0 0 0
Total Assets 2,785 2,673 2,308 2,280
1. Underwriting Provisions 666 642 621 511
2. Insurance Related Liabilities 651 611 484 590
3. Other Liabilities 216 190 109 127
4. Borrowings 105 111 112 152
5. Window Takaful Operations 0 0 0 0
Total Liabilities 1,639 1,553 1,326 1,380
Equity/Fund 1,146 1,120 982 900
B. INCOME STATEMENTS
CONSOLIDATED INCOME STATEMENT
1. Gross Premium Written/Gross Contribution Written 336 1,380 1,349 1,102
2. Net Insurance Premium/Net Takaful Contribution 269 1,085 913 803
3. Underwriting Expenses (260) (1,054) (898) (862)
Underwriting Results 9 31 15 (59)
4. Investment Income 22 152 54 (26)
5. Other Income / (Expense) 3 66 85 (4)
Profit Before Tax 34 249 154 (88)
6. Taxes (8) (75) (72) 17
Profit After Tax 27 174 82 (71)
PARTICIPANTS' TAKAFUL FUND - PTF
1. Gross Contribution Written 49 146 129 100
2. Net Takaful Contribution 13 39 37 28
3. Net Takaful Claims (26) (48) (52) (29)
4. Direct Expenses Including Re-Takaful Rebate Earned (0) (0) (1) (0)
Surplus Before Investment & Other Income/(Expense) (13) (9) (16) (0)
5. Investment Income 1 0 0 4
6. Other Income/(Expense) 3 15 12 0
Surplus for the Period (9) 5 (3) 3
OPERATOR'S TAKAFUL FUND - OTF
1. Wakala Fee Income 16 55 49 39
2. Management, Commission & Other Acquisition Costs (10) (31) (26) (23)
Underwriting Income/(Loss) 6 24 23 16
3. Investment Income 0 0 0 0
4. Other Income/(Expense) 1 11 12 3
Profit Before tax 7 35 35 19
5. Taxes 0 0 0 0
Profit After tax 7 35 35 19
C. RATIO ANALYSIS
1. Profitability
Loss Ratio - Net Insurance & Takaful Claims / Net Insurance Premium or Takaful Contribution 28.3% 37.9% 36.4% 39.2%
Combined Ratio (Loss Ratio + Expense Ratio) 90.6% 96.8% 98.1% 107.3%
2. Investment Performance
Investment Yield 8.9% 15.2% 6.3% -3.3%
3. Liquidity
(Liquid Assets - Borrowings) / Outstanding Claims Including IBNR 2.2 2.5 2.7 1.6
4. Capital Adequacy
Liquid Investments / Equity (Funds) 75.4% 86.8% 87.7% 90.8%

Aug-25

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Asia Insurance Company Limited

rating scale

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Aug-25

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Asia Insurance Company Limited

regulatory disclosure

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  1. Rating Team Statements
    1. Rating is just an opinion about the creditworthiness of the entity and does not constitute a recommendation to buy, hold, or sell any security of the entity rated or to buy, hold, or sell the security rated, as the case may be. (Chapter III; 14-3-(x))
    2. Conflict of Interest
      1. The Rating Team or any of their family members have no interest in this rating (Chapter III; 12-2-(j))
      2. PACRA, the analysts involved in the rating process, and members of its rating committee and their family members do not have any conflict of interest relating to the rating done by them (Chapter III; 12-2-(e) & (k))
      3. The analyst is not a substantial shareholder of the customer being rated by PACRA [Annexure F; d-(ii)]
      4. Explanation: for the purpose of the above clause, the term "family members" shall include only those family members who are dependent on the analyst and members of the rating committee.
  2. Restrictions
    1. No director, officer, or employee of PACRA communicates the information acquired by him for use for rating purposes to any other person, except where required under law to do so. (Chapter III; 10-(5))
    2. PACRA does not disclose or discuss with outside parties or make improper use of the non-public information which has come to its knowledge during a business relationship with the customer. (Chapter III; 10-7-(d))
    3. PACRA does not make proposals or recommendations regarding the activities of rated entities that could impact a credit rating of the entity subject to rating. (Chapter III; 10-7-(k))
  3. Conduct of Business
    1. PACRA fulfills its obligations in a fair, efficient, transparent, and ethical manner and renders high standards of services in performing its functions and obligations. (Chapter III; 11-A-(a))
    2. PACRA uses due care in the preparation of this Rating Report. Our information has been obtained from sources we consider to be reliable, but its accuracy or completeness is not guaranteed. PACRA does not, in every instance, independently verify or validate information received in the rating process or in preparing this Rating Report. (Clause 11-(A)(p))
    3. PACRA prohibits its employees and analysts from soliciting money, gifts, or favors from anyone with whom PACRA conducts business. (Chapter III; 11-A-(q))
    4. PACRA ensures before the commencement of the rating process that an analyst or employee has not had a recent employment or other significant business or personal relationship with the rated entity that may cause or may be perceived as causing a conflict of interest. (Chapter III; 11-A-(r))
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  4. Independence & Conflict of Interest
    1. PACRA receives compensation from the entity being rated or any third party for the rating services it offers. The receipt of this compensation has no influence on PACRA’s opinions or other analytical processes. In all instances, PACRA is committed to preserving the objectivity, integrity, and independence of its ratings. Our relationship is governed by two distinct mandates: i) rating mandate - signed with the entity being rated or issuer of the debt instrument, and ii) fee mandate - signed with the payer, which can be different from the entity.
    2. PACRA does not provide consultancy/advisory services or other services to any of its customers or their associated companies and associated undertakings that are being rated or have been rated by it during the preceding three years, unless it has an adequate mechanism in place ensuring that the provision of such services does not lead to a conflict of interest situation with its rating activities. (Chapter III; 12-2-(d))
    3. PACRA discloses that no shareholder directly or indirectly holding 10% or more of the share capital of PACRA also holds directly or indirectly 10% or more of the share capital of the entity which is subject to rating or the entity which issued the instrument subject to rating by PACRA. (Chapter III; 12-2-(f))
    4. PACRA ensures that the rating assigned to an entity or instrument is not affected by the existence of a business relationship between PACRA and the entity or any other party, or the non-existence of such a relationship. (Chapter III; 12-2-(i))
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  5. Monitoring and Review
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    2. PACRA reviews all the outstanding ratings periodically on an annual basis. Provided that public dissemination of annual review and in an instance of change in rating will be made. (Chapter III; 17-(b))
    3. PACRA initiates an immediate review of the outstanding rating upon becoming aware of any information that may reasonably be expected to result in downgrading of the rating. (Chapter III; 17-(c))
    4. PACRA engages with the issuer and the debt securities trustee to remain updated on all information pertaining to the rating of the entity/instrument. (Chapter III; 17-(d))
  6. Probability of Default
    1. PACRA’s Rating Scale reflects the expectation of credit risk. The highest rating has the lowest relative likelihood of default (i.e., probability). PACRA’s transition studies capture the historical performance behavior of a specific rating notch. Transition behavior of the assigned rating can be obtained from PACRA’s Transition Study available at our website. (www.pacra.com) However, the actual transition of rating may not follow the pattern observed in the past. (Chapter III; 14-3(f)(vii))
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