The Pakistan Credit Rating Agency Limited
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Waqas Ahmad

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PACRA Maintains IFS Rating of Habib Insurance Company Limited

Rating Type IFS
(09-Dec-22 )
(31-Mar-22 )
Action Maintain Harmonize
IFS Rating A++ (ifs) A++ (ifs)
Outlook Stable Stable
Rating Watch - -

The rating reflects strengthened financial position of Habib Insurance Company Limited, which is an associated Company of the Habib Group. Habib Insurance provides general insurance (Conventional & Takaful) services, operating majorly through four core segments, namely; i) Fire & Property ii) Marine & transport iii) Motor and iv) Miscellaneous. Furthermore, the Company benefits from synergy created through group entities, ultimately, channeled through its sponsor group (Habib Group of Companies). Syed Ather Abbas has been appointed as Chief Executive Officer (CEO) of the Company. New management of Habib Insurance is expected to steer the Company towards progressive performance. Positive developments instigated relative GPW growth for Habib Insurance, particularly within the motor segment and fire segment, boosting the topline of the Company to PKR 2,255mln for the period ended 9MCY22 (CY21: PKR 2,295mln). Enhanced topline, combined with moderate claims and management expense resulted in underwriting results of PKR 61mln for the period ended 9MCY22 (CY21: PKR 6mln). Elongated market outreach, capitalizing on the Habib group, bodes well for Habib Insurance’s business profile. The financial risk matrix remains adequate, with skewed profile of investment book towards liquid equity investments and secured government securities, along-with a sufficient equity base, providing comfort to the liquidity of Habib Insurance. Although, Habib Insurance incurred some losses on equity investments, owing to lousy performance of capital market, but the Company’s prime equity investments provided a reliable dividend income stream, contributing PKR 121mln in total investment income, with additional support derived from debt securities. The rating acknowledges Habib Insurance’s corporate strategy to increase its position on the market by prudent underwriting practices while focusing on bottom-line growth.
The rating is based upon sponsor profile and relative position of Habib Insurance Company in the general insurance industry. The future prospects of the Company will require further improvements in business size, underwriting profitability and investment income. As the company grows, the liquid profile must be enhanced.

About the Entity
Habib Insurance Company, part of Habib Group, was incorporated as a Public Limited Company in 1942. It is listed on Pakistan Stock Exchange with a trading symbol of “HICL”, and operates through a nationwide network of 17 branches. Habib Insurance Company is majorly owned by Habib Group, which is one of the renowned and well-established groups of the country, having exposure in industrial and financial sectors.
Overall control of the Company vests in the Board of Directors, structured with nine BoD members. It includes five non-executive directors, three independent directors and one executive director. Syed Ather Abbas has been appointed as CEO in Sep’22, in place of Mr. Shabbir Gulamali. He graces over three decades of experience in the insurance industry. He is accompanied by 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.