The Pakistan Credit Rating Agency Limited
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Muhammad Noor Ul Haq

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PACRA Assigns Initial IFS Rating to Reliance Insurance Company Limited

Rating Type IFS
(30-Dec-22 )
Action Initial
IFS Rating A+ (ifs)
Outlook Stable
Rating Watch -

The assigned rating of Reliance Insurance Company Limited ("Reliance" or the "Company") derives strength from a long track record of insurance operations which extends over four decades and also from the stable and strong ownership profile of two renowned industrial groups, Al-Noor Group and Amin Bawany Group. The parent groups are well-established and maintain a sound investment portfolio in diversified businesses. They have a long shared and common history in this Company. Reliance has an experienced management team associated with the Company for a substantial period of time. The rating also considered Company’s organic growth and very low captive business. The Company exhibited a growth of 19% YoY in net insurance premium to PKR 252mln in 9MCY22 (9MCY21: PKR 212mln). However, due to volatility in the capital market, the Company experienced a decrease of 47% in Investment Income to PKR 35mln during 9MCY22 (9MCY21: PKR 66mln). Company has constantly endeavored to diversify its business composition and while its forte resides with the fire segment, the Company offers a variety of other products. Going forward, growth is projected to accelerate in parallel with economic activity; management anticipates that the fire, marine, and motor segments will drive much of the growth. Moreover, to maintain the firm's risk appetite, the company has well-known reinsurers with strong credit risk profiles. The rating also factors in an adequate liquidity position, as evidenced by the existence of considerable liquid assets.
The rating is dependent on the company’s ability to improve its market position with continued profitability. The liquidity position and hence, financial risk profile should remain afloat along with growth. Sustaining underwriting profitability will be crucial going forward.

About the Entity
Reliance Insurance Company Limited was incorporated in 1981. The majority shares of the Company are held by Al-Noor and Amin Bawany groups. The board comprises nine members whereas CEO & MD being executive director is deemed director under Company Act, 2017. A healthy mix of independent and non-executive members is present. Mr. Irfan Zakaria Bawany, having professional experience of over three decades is the Chairman of the board. Mr. A. Razak Ahmed is the Chief Executive and Managing Director of the Company since Nov 1995. He has also been a part of the executive committee of the Insurance Association of Pakistan (IAP). He is assisted by an experienced management team with over decades of experience.

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.