The Pakistan Credit Rating Agency Limited
27-Feb-19
Analyst
Ayesha Qasim
ayesha.qasim@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains IFS Rating of Shaheen Insurance Company Limited
| Rating Type | IFS | |
|
Current (27-Feb-19 ) |
Previous (12-Dec-18 ) |
|
| Action | Maintain | Maintain |
| IFS Rating | A | A |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The rating reflects Shaheen's Insurance strong parentage - Shaheen Foundation - ensuring financial soundness of the company while augmenting its business operations and control environment through active vigilance. The significant improvement in the liquidity profile emanates from equity injection. Shaheen Insurance has sustained market share keeping pace with the industry's growth. Dominating portfolio ¬ motor ¬ is depicting good underwriting results, enabling the company to nourish other segments; for which the company is enhancing linkage with financial institutions. The company is expanding into other segments, leading to a diversified premium mix. The company carries support from investment income; gradually improving.The recent drive to invest in real estate sector needs to enmesh with the liquidity requirements of the company.
The rating is dependent upon sustained improvement in business profile of the company. This requires enduring emphasis on underwriting profitability and building requisite human resource. Given increasing size of investment book, investment policy statement needs elaboration and performance tracking mechanism. Some of the company's assets are not liquid, generating no
return as well. Conversion into liquid and return generated assets is important.
About
the Entity
Shaheen Insurance commenced commercial operations as a general insurance company in 1995, and is currently listed on the Pakistan Stock Exchange. With its head office in Karachi, the company has a nationwide network of 11 branches. It is majority owned by Shaheen Foundation Group and affiliates with its shareholding increasing after the issue of right shares to 73.4% (previous: 64.6%) followed by Hollard Insurance (10.6%).
The overall control of the company vests in the seven¬ member BoD. All directors represent SF, resulting in SF having complete dominance on the board. Chairman of the board, Air Marshal Muhammad Jamshed Khan (Retd.), is MD of Shaheen Foundation. DMD of SF, Air Vice Marshal Syed Razi Ul Hassan Nawab (Retd.), is a non executive director of the company. Mr. Sohail Najam Kidwai, CEO of the company since Jan¬14, possesses over two decades of insurance experience. He is assisted by a team of professionals.