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The Pakistan Credit Rating Agency Limited
Press Release

Date
07-May-22

Analyst
Zara Zafar
zara.zafar@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains IFS Rating of TPL Insurance Limited

Rating Type IFS
Current
(07-May-22 )
Previous
(31-Mar-22 )
Action Maintain Harmonize
IFS Rating AA (ifs) AA (ifs)
Outlook Stable Stable
Rating Watch - -

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 endeavored 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.

About the Entity
TPL Insurance Limited (TIL), formed in 1992 and listed on Pakistan Stock Exchange, a majority-owned (~59%) subsidiary of TPL Corp. TPL Corp – close to 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.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.