PACRA Maintains IFS Rating of Pak Qatar General Takaful Limited
|IFS Rating||A+ (ifs)||A+ (ifs)|
Pak-Qatar General Takaful Limited (PQGTL or the Company) is one of earliest dedicated takaful companies in Pakistan, possessing strong business acumen through its association with Qatar based financial institutions, while also being allied to its sister concern; Pak-Qatar Family Takaful. PQGTL rallied against its peers and established window takaful operators during the year in order to sustain its competitive position in the industry. Currently, the Company has stagnant market position in the wake of intense competition amongst dedicated takaful peers and window takaful operations of much established players in the industry. The management has devised a strategy under the new leadership to cater the growth moving forward. Efforts have been initiated to seek synergic benefits using cross selling through sister concern. High interest rates, however, could adversely impact the motor segment; traditionally the forte of the Company. Enhancement of bank business and induction of new sale force is also underway. The Company’s digital platform is providing impetus to its customer base.
During 9MCY22, general insurance industry reported GPW of PKR~114bln for 9MCY22 (9MCY21: PKR~89bln), achieving a growth of ~28% YoY basis. Insurance penetration remained very modest as compared to neighboring markets, underdeveloped relative to its potential. Investment income has deteriorated to PKR ~8bln for 9MCY22 (9MCY21: PKR 9.45bln). Overall industry has earned profit after tax of PKR 7.45bln for 9MCY22 (9MCY21: PKR 9.9bln), owing to higher claims, lower investment income and imposition of super tax. Some major industry claims have resulted in slight increase in claim ratio, recent flood will further impact profitability of insurance companies in last quarter of CY22.
The rating is dependent on the management’s ability to cohesively execute its business plan. Furthermore, improvement in market share and underwriting profitability are considered vital. Meanwhile, prudent management of premium receivables from corporate customers is essential. Also, implementation of real-time IT infrastructure along with an upgraded MIS should, among others, strengthen the claims management system.
PQGTL, incorporated in 2006, started operations in 2007. H.E. Sheikh Ali bin Abdullah Al-Thani member of Qatar's Royal Family is the key sponsor of the Company. He, directly and through his different Qatar based Financial Institutions control around 41.8% stake in PQGTL. Mr. Said Gul, a Pakistani origin businessman based in Qatar, controls around 48.3% stake through direct ownership and through PQIL.
Pak-Qatar has an nine-member board including the CEO – Mr. Zahid Hussain Awan. Mr. Awan has been associated with the Company since inception. Mr. Saqib Zeeshan has been appointed as the Dy. Chief Executive Officer of the Company. He possesses over two decades of experience in the insurance industry and had been initially part of the Pak-Qatar Group. A capable management team assists him.