The Pakistan Credit Rating Agency Limited
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Muhammad Noor Ul Haq

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PACRA Maintains IFS Rating of Adamjee Life Assurance Company Limited

Rating Type IFS
(26-Jun-23 )
(29-Jun-22 )
Action Maintain Maintain
IFS Rating A++ (ifs) A++ (ifs)
Outlook Stable Stable
Rating Watch - -

Adamjee Life under the umbrella of “Nishat Group” is a mid-sized life insurance company. Synergic benefits with the group bank (MCB Bank Limited) are being unlocked specifically in the bancassurance. The Company has registered a surplus in CY22 whereas the window takaful operations have added significant volumes. The management has expanded its branch network and also has built a sales force around agency model in order to diversify its distribution channels other than bancassurance. Adamjee Life stands out as the sole life insurance company that places a distinct focus on single premium policies, which account for a significant 35% of its GPW. The Company has also witnessed heightened increase in second year and subsequent year premium, means higher clientele retention as a result. Meanwhile, comfort is drawn from Adamjee Life's strong risk absorption capacity, represented by sufficient liquidity and overall quality of its investment portfolio. The Company issued right shares during CY21 and got listing on Pakistan Stock Exchange (PSX) on 4th March, 2022 with a free float of 10%. Listing on PSX has strengthen the Company's financial profile.
During FY23, Pakistan's Life Insurance sector faced challenges due to an unexpected rise in inflation which led to a decrease in disposable incomes. To adapt, sector players shifted their focus from first-year persistency to second year, prioritizing top-line growth. During the said period, unit-linked products remained attractive, offering fixed-rate investment opportunities amidst high policy rates. The sector's outlook is expected to remain Stable, supported by investment income in the next financial year. However, muted economic growth could adversely impact the sector if not timely mitigated.
The continued self-subsistence of statutory funds, ability to improve its market position and strengthening of core profitability are integral for the rating. Moreover, prudent management of risk in wake of increasing business volumes and agency model remain important.

About the Entity
Adamjee Life Assurance Company Limited is a public listed company, possessing a trading symbol of “ALIFE” on the PSX. The Company was initially incorporated as public unlisted company on August 4, 2008. The Company commenced its business in April 2009. Adamjee Life is subsidiary of Adamjee General Insurance with 90% shareholding. The branch network comprises 68 branches mainly concentrated in Punjab and Sindh geographically.
The Company’s BoD comprises seven members. Mr. Sheikh Muhammad Jawed has been re-appointed as the Chairman of the board. The board consists of one executive director, four non-executive directors and two independent directors. Mr. Manzar Mushtaq has been appointed as a CEO of the Company with effective from May'22. He has an experience of 19 years.

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.