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 IGI General Insurance Limited

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

The rating takes comfort from IGI’s association with its parent, IGI Holdings, which has injected a sizeable capital into the Company. This is preserved mostly in the form of liquid investments. The IGI Holdings has an express mandate to proactively support the Company in times of need. The top group resources provide strategic direction and oversight. Given the established customer base and stability in the operational performance of the Company, healthy growth in the financial performance is anticipated for the year-end CY22. Presently, during 9MCY22, general insurance industry has a total GPW size of PKR ~114bln (9MCY21: PKR~89bln), registering a growth of ~28% YoY basis. The insurance penetration and density remained very modest as compared to other jurisdictions while the insurance sector still remains underdeveloped relative to its potential. The insurance industry is capturing market share through offering Islamic Takaful Window operations which are gaining market acceptance rapidly. The Company also followed the industry trend and, expanded and recorded growth in its total assets. The top-line of the Company (GPW) showed a growth of 20% in 9MCY22 (including window takaful operations) over the corresponding period last year. Moreover, the Company has built its liquid investment book to equity ratio which confirms the Company’s ability to cover its short-term due obligations on time quite efficiently. The Company reported an increase in investment income because of the rolled-over effect of interest rates. Upgradation of IT infrastructure has yielded improved efficiency - notably in claims management. Further, the Company continues to enjoy a sound re-insurance panel that provides extensive risk absorption coverage. IGI’s panel includes Hannover Re (rated AA- by S&P), Swiss Re (rated AA- by S&P), Saudi Re (rated A by Moddy’s), Kuwait Re (rated A by S&P), Korean Re (rated A by A.M. Best) and Pak Re (rated AA by VIS).
The rating is based on the improved financial position of the Company. The financial position of the Company has strengthened over the period. The increased GPW is also one of the key rating drivers. The liquid investment book has improved and contributed to maintain the rating.

About the Entity
IGI Holdings holds 100% stake in the company. IGI Holdings is owned by Packages Group, which is ranked amongst the renowned industrial groups of the country, having diversified interests in packaging, dairy, pharmaceutical, and financial sectors. The overall control of the company vests in a six-member board of directors, the board comprises one executive director and five non-executive directors including a female director. A.F. Ferguson & Co. Chartered Accountants issued an unqualified audit report pertaining to financial statements for CY21. The company has a comprehensive organizational structure with clearly demarcated reporting lines, ensuring segregation of duties. Mr. Tahir Masaud, CEO, is an ACII and MBA from LUMS, having diversified national and international insurance related experience of over 20 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.