Analyst
Wajahat Arjumand Ansari
wajahat.ansari@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains IFS Rating of Pak Qatar General Takaful Limited
Rating Type | IFS | |
Current (24-Feb-22 ) |
Previous (24-Feb-21 ) |
|
Action | Maintain | Maintain |
IFS Rating | A | A |
Outlook | Stable | Stable |
Rating Watch | - | - |
Pak-Qatar General Takaful Limited (PQGTL or the Company) is one of earliest dedicated takaful companies in Pakistan, possessing strong business acumen through its association with Qatar based financial institutions, while also being allied to its sister concern; Pak-Qatar Family Takaful.
PQGTL rallied against its peers and established window takaful operators during the year in order to sustain its competitive position in the industry. On account to combat the economic implications of COVID-19, the massive reduction in policy rates had provided impetus to the motor segment depicting a prudent underwriting approach being utilized, however, with the revival in the economy and observed hike in policy rates, diversification of segmental mix remains critical. The Company continues to enjoy synergic benefits using cross selling through sister concern. Enhancement of bank business and induction of new sale force is under development. Increase in business volumes and takaful presence needs improvement hence therein.
During CY21, bank financing and automotive sector growth facilitated the industry progression. A conservative investment approach was undertaken by the industry participants, with investment mix majorly construing fixed income securities along-with minor equity exposure. As COVID re-emerged through its “Omicron” variant, its potential implications are yet to unfold in the coming year. Reduction in management expenditure and product innovation shall remain crucial for the industry participants for solidification of market position.
The rating is dependent on the management’s ability to cohesively execute its business plan. Furthermore, improvement in market share and underwriting profitability are considered vital. Meanwhile, prudent management of premium receivables from corporate customers is essential. Also, implementation of real-time IT infrastructure along with an upgraded MIS should, among others, strengthen the claims management system.
About
the Entity
PQGTL, incorporated in 2006, started operations in 2007. H.E. Sheikh Ali bin Abdullah AlThani member of Qatar's Royal Family is the key sponsor of the company. He, directly and through his different Qatar based Financial Institutions (mainly Qatar International Islamic Bank and Qatar Islamic Insurance Company) control around 41.8% stake in PQGTL. The other major sponsor is Mr. Said Gul, who controls around 48.3% stake through direct ownership and through PQIL. Mr. Gul, a Pakistani origin businessman settled in Qatar, has main interest in construction business.
Pak-Qatar has an eight-member board including the CEO – Mr. Zahid Hussain Awan. Mr. Zahid Hussain has been associated with the Company since inception. Mr. Saqib Zeeshan has been appointed as the Dy. Chief Executive Officer of the Company. He possesses over two decades of experience in the insurance industry and had been initially part of the Pak-Qatar Group. A capable management team assists him.