The Pakistan Credit Rating Agency Limited
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PACRA Maintains IFS Rating of Asia Insurance Company Limited

Rating Type IFS
(25-Aug-23 )
(26-Aug-22 )
Action Maintain Maintain
IFS Rating A++ (ifs) A++ (ifs)
Outlook Stable Stable
Rating Watch Yes -

In terms of Gross Premium Written (GPW), the general insurance industry has a total size of ~PKR 41bln during 3MCY23 (3MCY22: ~PKR 34bln), exhibiting a growth of ~21%. Similarly, the underwriting performance of the industry also improved and reported at ~PKR 1.5bln during 3MCY23 witnessing an increase of ~25% (3MCY22: ~PKR 1.2bln). Improved underwriting and investment performance contributed to the industry's earnings reported at ~PKR 4.1bln during 3MCY23 (3MCY22: ~PKR 3.4bln). However, current economic conditions remain imperative for the overall performance of insurance industry.
The ratings reflect stable standing of Asia Insurance Company Limited ('Asia Insurance' or 'the Company') in the insurance sector. The Company gathers support from InsuResilience Investment Fund, which is funded by the German Developed Bank 'KfW' and controlled by the Swiss-based BlueOrchard Finance Ltd. The investor not only enhanced the equity base but also strengthened the governance framework of the Company, through representation of InsuResilience Investment Funds on the Board of Asia Insurance. Despite focus on IT integration and development of new products that supported limited growth in GPW, during CY22, profitability remained subdued due to consistent underwriting losses over the years. The Company’s profitability has been challenged by equity market volatility, participation in some market level claims, and a hit to the agriculture portfolio in the 2022 nationwide floods. However, the Company has already put in place measures for loss mitigation and cost controls to boost its underwriting results. Coupled with increasing investment returns, this has led to a return to profitability in 2Q23. Financial risk, however, remains stretched due weak claim efficiency and limited liquidity. Capital structure, however, is adequate.
The rating is dependent on continued growth in core business of Asia Insurance as well as support from the Investment side to enhance profitability. Sustaining underwriting profitability will be crucial going forward.

About the Entity
Asia Insurance Company Limited ('Asia Insurance' or 'the Company') was established in 1979 as a General Insurance Company and was listed on the Pakistan Stock Exchange. The Company operates a network of 28 branches across the country.
Mr. Ihtsham ul Haq Qureshi and family holds majority (~67.8%) stake in the Company. Whereas, InsuResilience Investment Fund (IIF) holds ~25.4% of the shareholding. The Company's Board is chaired by Mr. Ihtsham ul Haq Qureshi. While, the Company is led by Mr. Zain ul Haq Qureshi as the CEO. He is aided 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.