The Pakistan Credit Rating Agency Limited
Press Release


Waqas Ahmad

Applicable Criteria

Related Research

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 Premier Insurance Limited

Rating Type IFS
(26-Aug-22 )
(31-Mar-22 )
Action Maintain Harmonize
IFS Rating A+ (ifs) A+ (ifs)
Outlook Negative Negative
Rating Watch - -

The rating reflects continuing efforts of the new leadership to steer the Company towards positive performance. The management of Premier Insurance is cautiously underwriting business, though the market share remained limited. Annual financials showed slight signs of improvement which bodes well for the Company, going forward. Whereas, there was a decline in business during the period ended Mar’22. Net losses have been reduced for CY21, owing to better investment performance. Whereas, there was an increase in losses during 3MCY22. The equity levels going forward must be maintained as the unappropriated loss amount is concerning. The new leadership has envisaged business plan in order to steer Premier Insurance into profitable growth. There has been change in the operational management of the Company.
The insurance industry in Pakistan is relatively small compared to its peers in the region. The insurance penetration and density remain very modest as compared to other jurisdictions while the insurance sector remains underdeveloped relative to its potential. CY20 was full of challenges and unprecedented pressures, locally as well as in the global economy. However, CY21 has been the road to recovery from these setbacks of the previous year. In terms of GPW, Pakistan’s general insurance industry have a total size of PKR ~34.1bln for 1QCY22 (CY21: PKR~112.8bln), have shown a growth of ~19% YoY basis. Investment income has also been a support to the bottom-line performances of the Companies during the period. Overall industry has earned profit after tax of PKR 3.5bln for 1QCY22 (CY21: PKR 13.4bln), owing to lower profitability and lower underwriting profits for period ended Mar'22.
The rating is dependent on positive performance matrix. Meanwhile, the management has to carefully manage its insurance asset liability structure wherein timely realization of outstanding premium along with smooth settlement of claims is critical. Any further dilution in the risk profile of the Company may impact the rating.

About the Entity
Premier Insurance was incorporated in 1952 and is listed on the Pakistan Stock Exchange. It operates through two business Hubs; South and North. Crescent Group and its associated companies hold 70% shareholding. State Life Insurance Corporation is another major shareholder with 11%. The Crescent Group (CG) operates in diversified sectors of textile, steel, sugar, and power.
Premier Insurance has a eight-member Board, including the CEO, comprising six representatives of Crescent Group and one of State Life Insurance Corporation. Mr. Nadeem Maqbool has been CEO of the Company since Feb’20. Mr. Maqbool has been associated with Premier Insurance for more than 17 years and is also the CEO of Suraj Cotton, part of Crescent Group.

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.