PACRA Maintains IFS Ratings of Adamjee Insurance Company Limited

Pakistan's general insurance industry has a total size of PKR 166bln during 9MCY23 (9MCY22: PKR 113bln), exhibiting a growth of ~47%, in terms of Gross Written Premium (GWP). The industry reported a growth of ~266% in underwriting results (9MCY23: PKR 9.9bln, 9MCY22: PKR 2.7bln). The net income of the industry also experienced an increase of ~170% to PKR 20bln during 9MCY23 (9MCY22: PKR 7.4bln). The industry's overall outlook remains stable with substantial liquidity available with players.
The IFS rating of Adamjee Insurance Company Limited ('Adamjee Insurance' or 'the Company') drives strength from the strong backing of the Nishat Group, majorly through MCB. This along with a robust governance framework provides a comprehensive policy development platform. The Company's GPW posted a value-driven growth of ~23%, with minimal volumes trickling in. This growth was mainly derived from fire and property segment (~50%); While, other segments like motor contributed ~26%, accident and health ~15%, marine and transport ~6% and miscellaneous contributed ~4% to the total GPW. Operational challenges in the international (UAE) business led the Company to book underwriting loss (~PKR 622mln); However, local business remains profitable. The management believes that the overall impact of international branches is expected to breakeven by CY24, while generating profits till CY25. Overall. the bottom-line gathers support from substantial investment income flowing in from a considerably strong investment book (mainly invested in Group companies). Despite substantial standing in Pakistan’s insurance market, management of loss ratio remains crucial for the rating. On the financial risk front, the Company holds adequate liquidity with a considerable equity standing. Higher claims are stressing the efficiency; however, the Company gathers support from a diversifed and creditworthy reinsurer panel.
The rating depends on the profitability of core business and investment income. Continuous strengthening of its market position along with its growing underwriting profits remains fundamental for the rating. Sustainable segment mix and efficient expense management remained critical to the financial performance with further progress being envisaged.

About the Entity
Adamjee Insurance Company Limited ('Adamjee Insurance' or 'the Company') was incorporated in 1960 as a public listed concern. The principal activity includes managing non-life insurance through Conventional and Window Takaful in Fire and Property, Marine and Transport, Accident and Health, Motor and Miscellaneous segments.
The Nishat Group holds ~37%stake in the Company. The Board is chaired by Mr. Muhammad Umar Mansha, while Mr. Muhammad Ali Zeb serves as the Company's CEO. He is assisted by a team of experienced professionals.