Analyst
Ayesha Qasim
ayesha.qasim@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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