The Pakistan Credit Rating Agency Limited
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Muhammad Noor Ul Haq

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PACRA Maintains IFS Rating of TPL Insurance Limited

Rating Type IFS
(05-May-23 )
(07-May-22 )
Action Maintain Maintain
IFS Rating AA (ifs) AA (ifs)
Outlook Stable Stable
Rating Watch - -

TPL Insurance’s rating is driven by its strong position in the relevant universe of players. The Company’s efficient management systems, in tandem with sustained growth and operational efficiency are reflected in the rating. Further, consistency in implementing prudent financial strategies also played a pivotal role in the maintenance of the entity’s rating. The aforementioned factors also enabled the perpetuation of a stable outlook. Company is driving GPW mainly from motor segment (~72.3%) as a result of which concentration risk is surfaced. Additionally, impetus is derived from abundant liquidity in the form of high liquid investments and cash reserves. Reinsurance treaties provide sufficient coverage to risks. The rating is supported by the induction of foreign investors. German-based institution, DEG and another foreign company namely Finnish Fund for Industrial Cooperation Ltd. acquired 15.87% and 17.02% stake in the Company respectively. This investment will provide further impetus to TPLI’s vision of introducing innovative and tech-driven products, such as yield-based crops and livestock insurance thereby increasing the penetration of insurance in Pakistan. Moreover, other than organic growth, company is looking for inorganic growth by way of acquisition/amalgamation with local insurance company operating within Pakistan. TPL Insurance is expanding its footings across the digital market as it has recently become the 1st Insurer in Pakistan with its presence in the Metaverse, whereby focusing on the next generation of its customers.
The rating is dependent upon the Company's ability to diversify its revenue stream. The inclusion of the foreign partner should provide oversight and impetus to the business and financial risk profile while aiding growth trajectory of the Company.

About the Entity
TPL Insurance Limited (TIL), formed in 1992 and listed on Pakistan Stock Exchange, a majority- owned (~52.87%) subsidiary of TPL Corp. TPL Corp – eleven-billion-rupee corporate conglomerate in turnover terms – has expanded its footings in diversified business avenues with a sizable portfolio of strategic investments. Major companies in the group include; TPL Properties, TPL Trakker, TPL Insurance, TPL Life Insurance amongst others.
TPL Insurance has an eight-member Board of Directors including the CEO. The Chairman of the board is Mr. Jameel Yousuf. The CEO, Mr. Muhammad Aminuddin, carries significant experience in the insurance industry. He is supported by a team of experienced 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.