Muhammad Noor Ul Haq
PACRA Maintains IFS Rating of TPL Insurance Limited
|IFS Rating||AA (ifs)||AA (ifs)|
TPL Insurance’s rating is driven by its strong position in the relevant universe of players. The Company’s efficient management systems, in tandem with sustained growth and operational efficiency are reflected in the rating. Further, consistency in implementing prudent financial strategies also played a pivotal role in the maintenance of the entity’s rating. The aforementioned factors also enabled the perpetuation of a stable outlook. TPL Insurance has constantly endeavoured to diversify its business composition and while its forte resides with the motor segment, the Company offers a variety of other products. Additionally, impetus is derived from abundant liquidity in the form of high liquid investments and cash reserves. Reinsurance treaties provide sufficient coverage to risks. Moreover, TPL Insurance continues to witness an increase in business volumes of the Window Takaful.
The rating is supported by the induction of a German-based institution, DEG, which acquired a 20% stake in the Company in 2021. Another foreign company, Finnfund, is being inducted as an equity partner in the Company. The investment will provide further impetus to TPLI’s vision of introducing innovative and tech-driven products, such as yield-based crops and livestock insurance thereby increasing the penetration of insurance in Pakistan. TPL Insurance intends to further develop its digital footprints and bring efficiencies through the digitization of business processes. The equity injection will also improve the financial strength and underwriting capability of TPL Insurance.
The rating is dependent upon the Company's ability to diversify its revenue stream. The inclusion of the foreign partner should provide oversight and impetus to the business and financial risk profile while aiding growth trajectory of the Company. Additional capital received in the form of equity should be kept in cash equivalent or liquid investment.
TPL Insurance Limited (TIL), formed in 1992 and listed on Pakistan Stock Exchange, a majority-owned (~63%) subsidiary of TPL Corp. TPL Corp – five-billion-rupee corporate conglomerate in turnover terms – has expanded its footings in diversified business avenues with a sizable portfolio of strategic investments. Major companies in the group include; TPL Properties, TPL Trakker, TPL Insurance, TPL Life Insurance amongst others.
TPL Insurance has an eight-member Board of Directors including the CEO. The Chairman of the board is Mr. Jameel Yousuf. The CEO, Mr. Aminuddin, carries significant experience in the insurance industry. He is supported by a team of experienced professionals.