The Pakistan Credit Rating Agency Limited
Press Release


Muhammad Noor Ul Haq

Applicable Criteria

Related Research

This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains IFS Rating of Salaam Takaful Limited

Rating Type IFS
(01-Feb-23 )
(31-Mar-22 )
Action Maintain Harmonize
IFS Rating A++ (ifs) A++ (ifs)
Outlook Stable Stable
Rating Watch - -

Salaam Takaful Limited (“Salaam Takaful” or the “Company”), a dedicated Takaful company, has demonstrated unprecedented growth since the takeover by new shareholders and the CEO in 2018. Initially a motor-centric company, it has expanded its footprints into the other segment such as health and miscellaneous. The Company has increased focus on its customer service experience through interplay of technology and digital customer interactions which has provided an edge to the company-amidst high competition. It has diligently worked on innovative ideas by employing latest technologies and expects that such strategy will create value by improving customer service. The business has picked up sizably and consistent rapid growth being quite visible. Salaam Takaful earned a Gross Contribution Revenue of PKR 2.2bln in CY21 (CY20: PKR 1.6bln), depicting a growth of 38% YoY. The same growth trend can be seen in 9MCY22, surged a growth of 30% YoY to PKR 1.9bln (9MCY21: PKR 1.4bln). However due to volatility in the capital markets, the Company experienced a contraction in investment income. Given the deprived performance of the capital market, the Company intends to expand its investment canvas to ensure strong supplementary income. Segmental concentration soars in the motor and health segment, with further diversification in untapped segment being expected, going forward. A Major growth in the miscellaneous segment was reported during 9MCY22. The underwriting profitability of the Company inched up on account of considerable contribution from the health segment. Additionally, the Company has plans of further equity injection by end of CY22, which will likely boost liquidity and create room for further expansion. The leverage of the Company needs to be managed. The shareholders are aligned on the business philosophy and share vision for future in a documented way. Going forward, business expansion combined with business diversification is projected in order to strengthen STL’s footprint in the general insurance industry.
The rating is dependent on the management's ability to capitalize on the group's well-built platform for business expansion. Upholding of liquidity and enhancement in equity levels along-with diversity in revenue stream and improved contribution from investments remain essential factors.

About the Entity
Salaam Takaful Limited (STL) is an unlisted public limited company incorporated in June 2006, with its registered head-office in Karachi. Salaam Takaful has a seven-member board. Mr. Rizwan Hussain is the CEO of Takaful Pakistan. He brings more than 30+ years of experience as a seasoned Insurance/Takaful industry professional. He has been able to build a team of qualified professionals in past two years. The leadership and team of experienced professionals have helped the company to maintain healthy profitability along with rapid growth. Along with Mr. Rizwan Hussain and Family, Mr. Salim Godil is also one of the major shareholders, he also owns significant business interests including Toyota Central Motors, one of the largest Toyota auto dealerships in Pakistan. Other shareholders include, Al Baraka Bank Pakistan Limited, House Building Finance Company (Owned by State Bank of Pakistan), Mal Al Khaleej Investment LLC and Sitara Chemical Industries Limited.

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.