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The Pakistan Credit Rating Agency Limited
Press Release

Date
19-Apr-18

Analyst
Ayesha Qasim
ayesha.qasim@pacra.com
+92-42-35869504
www.pacra.com

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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 Ratings of The Universal Insurance Company Limited

Rating Type IFS
Current
(19-Apr-18 )
Previous
(29-Sep-17 )
Action Maintain Maintain
IFS Rating A- A-
Outlook Stable Stable
Rating Watch - -

The rating of Universal reflects strong parentage of the company – Bibojee group. The parentage has provided multi-faceted support to the company: a) injection of capital (PKR 500 mln as at Dec 17) from different times of the crisis: PKR 84mln lately injected, b) sustenance in the cleansing period spanning over a couple of years, c) captive business. Underwriting resulted in loss while the bottomline was cushioned from; profits of associates-Gandhara Industries and some other write-backs. The business strategy envisages tapping captive business with gradual entry into the market business. The road ahead is long, as the company is building the marketing force while enlisting with the banks. The ratings also incorporate significant market value of the strategic investment book; which also yields benefit in the form of dividends.
The rating is dependent upon sustained improvement in liquidity position of the company, augmenting its risk absorption capacity, as envisaged by the board and the management. Meanwhile, continued improvement in the business profile of the company, is also imperative for the rating.

About the Entity
Universal Insurance Company Limited, incorporated in 1958, is listed on Pakistan Stock Exchange (PSX). Majority ownership of the company is held by Bibojee Group (87%), through holding company “Bibojee Services Private Limited” (BSL). Bibojee group is well established in having various industrial sectors including Textile, Auto, Tyres & Rubber and Engineering.

Nine members BoD constitutes six members from sponsoring family- including the CEO. One member is an employee of the group along with an independent director inducted. The CEO, Mr. Gohar Ayub Khan, replaced in succession to Begum Zeb Gohar Khan (Late), in Jan16. Managing Director – Mr. Amir Raza, is an experienced insurance professional long associated with the company

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.