PACRA Maintains IFS Rating of Adamjee Life Assurance Company Limited
|IFS Rating||A++ (ifs)||A++ (ifs)|
Adamjee Life under the umbrella of “Nishat Group” is a mid-sized life insurance company. Synergic benefits with the group bank (MCB Bank Limited) are being unlocked specifically in the bancassurance. The Company has registered a surplus in CY21 whereas the window takaful operations have added significant volumes. The management has expanded its branch network and also has built a sales force around agency model in order to diversify its distribution channels other than bancassurance. The Company has witnessed heightened increase in second year premium, means higher clientage retention as a result. Meanwhile, comfort is drawn from Adamjee Life's strong risk absorption capacity, represented by sufficient liquidity and overall quality of its investment portfolio. The Company aims to sustain its position in light of the current political and economic circumstances. The Company issued right shares during CY21 and got listing on Pakistan Stock Exchange (PSX) on 4th March, 2022 with a free float of 10%. Listing on PSX has strengthen the Company's financial profile.
Gross Premium Written (GPW) of the Life Insurance industry in Pakistan stood at PKR~95bln during 1QCY22 (1QCY21: PKR~62bln; CY21: PKR~291bln; CY20: PKR~233bln), showing a YoY growth of ~53%. Major growth was observed in Govt. sector. Past year has been very challenging due to the COVID-19 which has caused immense stress on most businesses. CY21 has shown a recovery in business and a positive trend in the growth of the industry, as compared to the corresponding period. Recent hike in the policy rate will be a source of safe return for the Companies on Govt. investments. On the other hand, a massive hike in inflation is also going to affect the surplus income of the general public.
The continued self-subsistence of statutory funds, ability to improve its market position and strengthening of core profitability are integral for the rating. Moreover, prudent management of risk in wake of increasing business volumes and agency model remain important.
Adamjee Life Assurance Company Limited is a public listed company, possessing a trading symbol of “ALIFE” on the PSX. The Company was initially incorporated as public unlisted company on August 4, 2008. The Company commenced its business in April 2009. Adamjee Life is subsidiary of Adamjee General Insurance with 90% shareholding. The branch network comprises 68 branches mainly concentrated in Punjab and Sindh geographically.
The Company’s BoD comprises seven members. Mr. Sheikh Muhammad Jawed has been re-appointed as the Chairman of the board. The board consists of one executive director, four non-executive directors and two independent directors. Mr. Manzar Mushtaq has been appointed as a CEO of the Company with effective from May'22. He has an experience of 19 years.