PACRA Maintains IFS Rating of The United Insurance Company of Pakistan Limited

The rating of United Insurance takes into account continued performance of the company reflected by the growing business; the company is regarded as the fourth largest player in terms of volume in the industry. The profitability is healthy though there is slight downward adjustment in the underwriting income on comparative period basis; requiring management's attention in this regard. The business is emanating from all segments of insurance, representing a strength; the main contributor is the miscellaneous segment. The company has continued to generate liquidity; yet a major portion has been placed into a strategic investment. On a standalone basis, the liquidity is adequate yet the relative positioning requires significant improvement. Apna Bank has traveled a long distance; getting closer to sustainable profitability, which is essential to the sustained risk profile of the group. Materialization of inflows from divestment may be of help. The management has plans to beef up its liquidity position, nevertheless. The UIG group has spread its wings in other sectors and abroad and boasts off a number of investment including any other emerging insurance company "SPI".

The ratings are dependent on sustained improvement in the liquidity position of the company. The profitability indicators need to hold in future in wake of rise in business volume. Improving the customer interface including claims settlement process is important. Harnessing the control environment is considered essential.

About the Entity
UIC, established in 1959, is listed on the Pakistan Stock Exchange. It is operating through an extensive network of close to 140 branches concentrated in the North region of Pakistan. The company is part of The United International Group (UIG) which controls ~92% shareholding in the company. The Company is led by strategic vision of the chairman of United International Group Mian M. A. Shahid, an insurance veteran. UIG has sizeable stake in micro finance banking, through Apna Microfinance Bank, and insurance industry, through UIC and SPI Insurance. The group's presence in insurance is being augmented through takaful operations in both insurance companies. Other ventures include tracking business, farming and software.

The overall control of the company vests in seven-member BoD. Three members represent UIG, three members are non-executive including chairman and one is independent director. Mr. Javaid Sadiq is the Chairman of the Board and possess over three decades of experience