The Pakistan Credit Rating Agency Limited
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Muhammad Noor Ul Haq

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PACRA Maintains Entity Ratings of TPL Life Insurance Company Limited

Rating Type IFS
(29-Jun-22 )
(31-Mar-22 )
Action Maintain Harmonize
IFS Rating A (ifs) A (ifs)
Outlook Stable Stable
Rating Watch - -

The rating reflects TPL Life Insurance’s strong balance sheet strength in tandem with its adequate operating performance, limited business profile and appropriate enterprise risk management. Concurrently, the rating takes comfort from strong Group support that can be witnessed through multiple equity injections that have persistently been made during the past few years. TPL Corporation – the holding company, is a rising conglomerate having foothold in insurance, real estate, transport, technology and financial sectors. TPL Life had been pursuing both life and health insurance businesses in the past; however, recently the Company is striving to accentuate its life insurance business. In the pursuit of permeating awareness and enhance penetration of life insurance, TPL Life has placed emphasis on introducing short-term, innovative products. Insurance industry in Pakistan witnessed accelerated growth during CY21: the market size of the industry with respect to the Gross Premium Written (GPW) summed up to PKR 291bln, showcasing an increase of 25% YoY. Simultaneously, net claims declined by 0.4% and investments made by the industry soared by 12% YoY. While TPL life has successfully reduced its underwriting expenses during CY21, repetitive deficits incurred entail a grave concern. The Company’s underwriting and operating results are not commensurate with the industry and have consistently been following a downward trajectory. However, the management envisages a boost in margins in the forthcoming years by way of aggressive marketing of its products, especially tailored to cater to the divergent needs of the local population. Additionally, an equity injection, amounting PKR 200mln, is also on the horizon, and will further cushion the financial position of the Company.
The rating is dependent on the Company’s ability to execute its existing business plan in an efficient manner; herein, consistent growth in top-line and underwriting profits are essential. Maintenance of liquidity levels are pivotal for rating while the addition of foreign partner will provide added strength.

About the Entity
Incorporated in 2008, TPL Life Insurance Limited obtained the license to carry out operations in 2009. The Company is majority owned by TPL Corporation, which maintains 97.14% stake in the Company while the remaining 2.86% is cumulatively held by the directors and their spouses. Mr. Saad Nisaar, the CEO of the Company, is a seasoned professional with a vast experience in the insurance industry. The Company offers a wide range of life insurance solutions for individuals, small to large corporates and microfinance segment.

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.