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The Pakistan Credit Rating Agency Limited
Press Release

Date
26-Jan-24

Analyst
Faiqa Qamar
faiqa.qamar@pacra.com
+92-42-35869504
www.pacra.com

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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 Crescent Star Insurance Limited

Rating Type IFS
Current
(26-Jan-24 )
Previous
(27-Jan-23 )
Action Maintain Maintain
IFS Rating A (ifs) A (ifs)
Outlook Stable Stable
Rating Watch Yes Yes

The assigned rating reflects the modest position of the Company in terms of GPW in the general insurance space. The Company is focusing on growth arenas other than banking channels. Hence the liner of business that the Company underwrites reflects that very approach. The emphasis is on direct line insurance in credit & suretyship, along with miscellaneous segments. Overall, the commitment to underwrite risk-free business has resulted in a notable enhancement of Crescent Star's GPW, translating into improved performance on comparative terms. The liquidity of the Company was previously stuck in a major investment. Under a new arrangement, this liquidity is now flowing back. The Company has received PKR 150mln and hopes to receive the entire PKR 350mln in the coming days. This will beef up the liquidity of the Company. The management has expressed the intention to keep the amount in government securities or bank placements. Materialization of these initiatives, along with liquidity enhancement, remains crucial for the Company. On the financial risk side, the Company's current liquidity profile caters to its current portfolio only. The risks of the Company underwriting are granular and work under facultative agreements. Having a predecided treaty of reinsurance is preferred for insurance companies. Moreover, the Company's relative ability to meet liabilities towards the policyholders remains well.
The rating captures the Company's consolidation process in a merger of Crescent Star Foods into PICIC Insurance, while fulfilling regulatory and legal requirements. Transparency and governance standards remain important.

About the Entity
Crescent Star Insurance Limited, a Company listed on the stock exchange since 1957, sees a significant ownership interest of ~97.8%, dispersed among a diverse group of individuals.
The Company has an eight-member Board (BoD), three Independent, two Non-Executive and three Executive Directors on the BoD. The BoD is chaired by Mr. Naim Anwar, who concurrently serves as the CEO of the Company.

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.