The Pakistan Credit Rating Agency Limited
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Faraan Taimoor

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PACRA maintains IFS Rating of Shaheen Insurance

Rating Type IFS
(26-Aug-20 )
(29-Aug-19 )
Action Maintain Maintain
IFS Rating A A
Outlook Positive Positive
Rating Watch - -

The company has witnessed a moderate growth over the years. Impetus is being added lately through the efforts of Shaheen Foundation. The underwriting portfolio is dominated by motor segment. The rating represent powerful parentage of Shaheen's Insurance- Shaheen Foundation. The foundation provides strategic oversight while sharing business volumes with Shaheen Insurance through its subsidiaries. The company aims to penetrate further in the non-motor segment both through captive and non-captive channels. The support from investment income is steady. Financial risk profile needs to be sustained.
Prior to COVID-19, the general insurance industry witnessed a growth of 11% YoY. The current pandemic affected the volumes, which led to a contraction in the growth. However, volumes have picked up post-June 2020 amidst increase in economic activities throughout the country.
The volumes need to sustain, indeed, improve in tandem with the longer historical trend. The interest rate regime would impact the fixed income stream but the equity market is improving though requiring a prudent approach.
The rating is dependent upon sustained improvement in business profile of the company. Growth in revenue streams alongwith sustaining equity levels are crucial. Improvement in liquidity is core to the rating.

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 13 branches. It is majority owned by Shaheen Foundation Group and affiliates with shareholding increasing after otherwise than right issue, to 73.4%, followed by Hollard Insurance (10.6%).

The overall control of the company vests in the sevenĀ¬ member BoD. All directors represent SF, resulting in SF having complete dominance on the board. Chairman of the board, Air Marshal Muhammad Arif Pervaiz (Retd.), is MD of Shaheen Foundation. DMD of SF, Air Vice Marshal Salman Ahsan Bokhari (Retd.), is a non executive director of the company. Mr.
Sohel Najam Kidwai, CEO of the company since JanĀ¬14, possesses over two decades of insurance experience. He is assisted by a team of professionals.

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.