Salaam Takaful Limited (“Salaam Takaful” or “the Company”) is an unlisted public limited company, incorporated on June 02, 2006, under the repealed Companies Ordinance, 1984 (now governed by the Companies Act, 2017).

In 2017, Takaful Pakistan Limited was acquired by new sponsors with a strategic vision to establish a digitally enabled Islamic insurance platform. Subsequently, the Company was rebranded as Salaam Takaful Limited, marking a strategic shift toward positioning itself as Pakistan’s first digital Islamic Insurtech. The rebranding reflected the sponsors’ intent to enhance operational efficiency, customer outreach, and technological integration within the takaful landscape.

Salaam Takaful Limited operates as a sole takaful operator in the non-life segment and conducts its business under the supervision of a Shariah Adviser, ensuring full compliance with Shariah principles. The Company underwrites risks across Fire & Property, Marine, Motor, Health, and Miscellaneous lines of business. Operationally, the Company maintains a network of eight branches, comprising its Head Office in Karachi and a Regional Office in Lahore, supporting its nationwide presence.

Salaam Takaful Limited is majority-owned by its sponsoring shareholders. Mr. Salim Habib Godil, Mr. Shahzad Salim Godil, Mr. Rizwan Hussain, and Mr. Salman Hussain collectively hold 78.6% of the Company’s shareholding, ensuring strong sponsor control and continuity. The remaining 21.4% stake is held by institutional and corporate investors, including Al Baraka Bank Limited, House Building Finance Company Limited, Mal Al Khaleej Investment LLC, Sitara Chemical Industries Limited, and Trust Securities & Brokerage Limited, providing diversification in the ownership base.

The sponsors have demonstrated a long-term strategic commitment to the Company, as evidenced by their continued involvement in governance and management oversight. The clarity of vision and sustained sponsor presence support the Company’s operational and strategic stability.

The sponsors collectively possess close to three decades of experience in the insurance and takaful sector, having successfully navigated multiple industry cycles. Their sector-specific knowledge and familiarity with regulatory, underwriting, and claims dynamics enhance the Company’s strategic direction and execution capability.

The sponsors maintain adequate financial strength, which provides comfort regarding their ability to extend financial and strategic support to the Company, if required, particularly during periods of growth or stress.

The Company is governed by a seven-member Board of Directors (BoD), responsible for setting the overall policy framework and strategic direction. The BoD comprises two Independent Directors, four Non-Executive Directors, and one Executive Director. While the Board reflects reasonable independence and diversity, sponsor representation remains dominant, which is typical for closely held entities.

The Board is chaired by Mr. Salim Habib Godil, who brings over four decades of professional and business experience and has been associated with the Company since 2017. Mr. Shahid Mobin Siddiqui, an Independent Director, contributes an external perspective to Board deliberations, supported by over two decades of professional experience. Other Board members possess diversified experience and have held senior roles across financial services, manufacturing, and corporate sectors.

The BoD is supported by three key committees: Audit Committee, Human Resource & Remuneration Committee, and Investment Committee, which assist in policy formulation and oversight. During the year, the Board convened four meetings, with properly documented minutes, indicating an active governance framework.

The Company’s financial statements for CY24 were audited by UHY Hassan Naeem & Co. Chartered Accountants., who issued an unqualified audit opinion. The internal audit function is outsourced to M/s Yousaf Adil. Both firms are included in the State Bank of Pakistan’s ‘A’ category panel, reflecting sound audit quality and acceptable transparency standards.

Salaam Takaful maintains clearly defined reporting lines with appropriate segregation of duties. All Heads of Departments report to the Chief Executive Officer (CEO), who in turn reports to the BoD. The Head of Internal Audit and Human Resources report administratively to the CEO while functionally reporting to the relevant Board committees, strengthening governance oversight.

The Company is led by Mr. Rizwan Hussain (CEO & Managing Director), who has over two decades of experience in the insurance industry. Mr. Amjed Bahadur Ali, recently appointed as Chief Financial Officer, brings approximately a decade of sector experience. The senior management team is supported by qualified professionals with relevant functional expertise.

Management oversight is supported through three management-level committees: Underwriting & Retakaful / Co-Takaful Committee, Benefit (Claims) Settlement Committee, and Risk Management & Compliance Committee. These committees meet regularly, and meeting minutes are adequately documented, supporting effective decision-making and control.

The Company operates an in-house Takaful Management System, which integrates underwriting, claims, agency, and finance modules. The system enables real-time MIS generation, facilitating effective monitoring and timely management decisions.

Salaam Takaful follows a centralized claims management framework. While branches are authorized to enter claims data, reserves are recorded centrally based on estimated losses, and independent surveyors are appointed in line with approved procedures, supporting claims discipline.

The Investment Committee, comprising the CEO, CFO, and two BoD members, oversees investment activities. The Company maintains a formal Investment Policy Statement (IPS), which is reviewed annually and approved by the Shariah Advisory, ensuring Shariah compliance and disciplined investment practices.

Underwriting and policy issuance are centrally controlled at the Head Office. Branches may issue policies; however, policy posting and new customer creation rights remain centralized. All policy issuance is subject to pre-inspection analysis, based on information collected by branches, strengthening risk controls and underwriting discipline.

Pakistan’s general insurance industry reported a total GPW of approximately PKR 138.1bln as of Sep’25 (Sep’24: PKR 151.8 billion), registering a year-on-year decline of around 9.0%. The industry’s underwriting performance declined markedly, with underwriting results decreasing by 50% YoY to PKR 4.8bln in 9MCY25 (9MCY24: PKR 9.6bln). Additionally, investment income declined by around 16.4% YoY to PKR 22.9bln (9MCY24: PKR 27.4bln), primarily attributable to monetary easing. From a business risk perspective, concentration risk has shown marginal improvement due to a significant expansion in the fire & property segment. However, underwriting performance remains pressured, primarily due to elevated claim ratios in the health segment, coupled with an increase in reinsurance costs.

Salaam Takaful holds a market share of ~2.5% for the period ended Sep'25, deeming it a small player in the general insurance industry.

Salaam Takaful's GPW mix is dominated by Motor (~32%), Health (~29%), followed by Fire & Property (~21%) Misc. (~15%) and Marine (~3%) segments. The Company is a sole Takaful operator. During 9MCY25, GPW experienced an annualized decline of ~13% ,The Company actively manages concentration risk for efficient operations.

The Company reported an underwriting profit of ~PKR 81mln during 9MCY25, compared to an underwriting profit of ~PKR 365mln in CY24, reflecting a notable deterioration in underwriting performance. The decline is primarily attributable to a sharp increase in net loss ratio to ~85.2% in 9MCY25 (CY24: ~70.7%), driven by elevated claims—particularly in the accident & health segment—alongside higher re-takaful costs, which collectively eroded underwriting margins.

The Company’s total investment portfolio declined to ~PKR 1,752mln as at Sep-25, compared to ~PKR 1,905mln as at CY24, remaining heavily concentrated in subsidiaries/associates and investment properties, underscoring a strategic rather than yield-oriented investment approach. Consequently, investment income moderated to ~PKR 18mln during 9MCY25, compared to ~PKR 35mln in CY24, offering limited support to profitability, as reflected in a subdued investment yield of ~1.4% (CY24: ~2.3%).

The Company prioritizes technology for enhanced operational efficiency, anticipating positive impacts on the bottom line. Moreover, the focus on diversification – fire & property and motor segments, besides health - bodes well for the overall growth.

As of Sep-25, Salaam Takaful’s claims efficiency remains under pressure, as evidenced by a very high insurance claims to liquid investments ratio of ~1,561%, though showing some improvement from ~2,298% in CY24. Meanwhile, outstanding claims days improved to ~86 days in 9MCY25, compared to ~108 days in CY24, indicating relatively faster claims settlement, albeit from a stressed liquidity position.

Salaam Takaful has its Re-Takaful arrangements with Labuan Re (‘A-’ by AM Best), Saudi Re (‘A3’ by Moody), Kuwait Re (‘A-’ by AM Best), Malaysian Re ("A- " by A.M Best), PRCL ("AA" by VIS) and Singapore Re (‘A’ by AM Best). Quota and Surplus treaties with stable capacity bodes well for the Company.

As of CY24, Salaam Takaful’s liquid assets/outstanding claims including IBNR reported at 0.1x reflecting limited liquidity coverage. The concentration of investment book towards Subsidiaries/Associates and Investment Propoerty has impacted the coverage ratios.

The Company maintains a good capital position, remaining compliant with SECP capital adequacy requirements. Total equity stood at ~PKR 1,220mln as at Sep-25, compared to ~PKR 1,490mln as at CY24, reflecting erosion primarily due to losses at the participant level. Nevertheless, the Company further strengthened its capital base by increasing its paid-up/statutory capital to ~PKR 1,788mln as at Sep-25, up from ~PKR 1,788mln in CY24, providing a reasonable cushion to absorb underwriting volatility and support business continuity, though sustained profitability and liquidity improvement remain critical going forward.