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The Pakistan Credit Rating Agency Limited
Press Release

Date
10-Oct-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 Upgrades IFS Rating of East West Insurance Company Limited

Rating Type IFS
Current
(10-Oct-24 )
Previous
(12-Jul-24 )
Action Upgrade Maintain
IFS Rating AA+ (ifs) AA (ifs)
Outlook Stable Positive
Rating Watch - -

East West Insurance Company Limited's ("East West" or “the Company") profile reflects a clear vision of its sponsors built over the years, showcasing prudently managing the quality of business written along with well developed control mechanisms placed across the Company. East West was initially setup as a conventional insurance provider company only; however, later, the Company tapped into window takaful insurance aswell. Today, the Company’s conventional insurance segment still constitutes majority of its operations (i.e. ~91% of its portfolio). Over the years, the Company has progressed well and holds a stable risk profile when compared to its peers. The Company's consolidated GPW posted a growth of ~23% (6MCY24: ~PKR 3.9bln, 6MCY23: ~PKR 3.2bln) mainly value driven, while subtle increase in business volumes also had a trickling impact. Fire and property remain the main contributing segment (~31%) in the overall GPW, followed by engineering (~24%), motor (~17%), miscellaneous (~14%), marine, aviation & transport (~14%). Substantially solid underwriting performance along with stable support from the investment book's performance led to secure and profitable bottom-line. The management’s vision of increasing the inclusion of digitalization is expected to enhance the overall business volumes, going forward. The Company’s capital structure holds a considerable standing. Moreover, the recent injection of PKR 263mln through a rights issue has added support. Though the extended receivable days and the impairment requires vigilance, the Company’s overall financial risk profile remains intact with substantial liquidity on its balance sheet.
PACRA upgrades East West’s IFS rating assissted by superior performance of the Company among its peers. Moreover, healthy cash flows and substantial liquid assets support the rating. As part of ongoing succession planning, sponsors are nurturing future leaders. The induction of the younger generation provides essential support to the existing governance framework.
The rating is dependent on the Company’s ability to sustain the market share along with augmenting the profits. The financial risk profile through imporved liquidity position must remain in line with the growth. Substantial cushion from the underwriting business along with strengthening of underwriting discipline shall remain crucial for the rating, going forward.

About the Entity
East West Insurance Company ("East West" or “the Company") was incorporated as a Public Listed Company (listed on PSX) and became operational in 1983. The Company operates as a general insurance company. Yunus family holds majority shareholding (~68%) of the Company, through individuals (~41%) and the holding company (~27%). The rest resides with the general public. The Board, dominated by the sponsoring family, is chaired by Mr. Umeed Ansari since Apr-24. Mr. Naved Yunus leads the Company as the CEO, supported by Mr. Saad Yunus as Deputy MD. They are assisted by a professional team.

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.