Analyst
Faiqa Qamar
faiqa.qamar@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains IFS Rating of Jubilee Life Insurance Company Limited
Rating Type | IFS | |
Current (16-Jan-25 ) |
Previous (22-Feb-24 ) |
|
Action | Maintain | Maintain |
IFS Rating | AA++ (ifs) | AA++ (ifs) |
Outlook | Stable | Stable |
Rating Watch | - | - |
Life Insurance market is dominated by the public sector (~60% share as of 6MCY24). At the same time, the private sector holds only ~40% of the market share. GPW of the industry stood at ~PKR 181bln during 6MCY24 (6MCY23: ~PKR 193bln), showing a YoY dip of ~6%. On the claims end, net claims declined by ~5% (6MCY24: ~PKR 165bln, 6MCY23: ~PKR 175bln). The total investment book of the insurance industry stood inclined by ~19% (6MCY24: ~PKR 2,144bln, 6MCY23: ~PKR 1,799bln), yielding an investment income of ~PKR 184bln during 6MCY24 (6MCY23: ~PKR 98bln). Going forward, the sector's overall outlook is expected to remain stable.
The assigned IFS rating of Jubilee Life Insurance Company Limited ('Jubilee Life' or 'the Company') derives strength from its strong association with Aga Khan Fund for Economic Development (AKFED), having sound financial footing across many business arenas. Jubilee Life enjoys the strong business acumen of its sponsors, which, combined with AKFED nominees on the Board, enhances the Company's governance framework. The Company offers a wide range of standard products in conventional and takaful markets. The Company offers a wide range of standard products, both in the conventional (generating ~ 75% of the GPW) and takaful (generating ~ 25% of the GPW) market. Individual Life - Unit Linked products remain prominent (~56% of total GPW), followed by accident & health insurance (~30%) and the corporate business segment (~14%). The Company focuses on an agency model with a vast branch network. GPW along with first year and renewal persistency remains stable. Claims, particularly surrenders, remain high due to economic uncertainty, stressing the Company's underwriting performance. However, the bottom line gathers support from a considerably strong investment income, realized from a solid investment portfolio primarily comprising government securities. On the financial risk front, the Company's cash outflow from operations largely remain attributable to claims payouts and surrenders. The rating gathers comfort from an adequate liquidity and risk appetite.
The rating depends on the Company's sustained competitive positioning within the life insurance industry. An ongoing strategy revamp to ensure an improvement in core and operational profitability is imperative. The solvency profile, as indicated through reserves, must remain strong at all times to sustain the rating.
About
the Entity
Jubilee Life Insurance Company ('Jubilee Life' or 'the Company') was incorporated as a public listed company on 29-Jun-95. The majority of the shareholding vests with Aga Khan Development (~57.9%), followed by Habib Bank Limited (~18.5%) and Jubilee General Insurance (~6.4%). Foreign investors and Financial Institutions hold ~6.3% and ~3.6% stake, respectively. The remaining shareholding (~7.3%) vests with the General Public.
The Company has a nine-member Board chaired by Mr. R. Zakir Mahmood. Mr. Javed Ahmed heads the Company as the Chief Executive Officer and is supported by an experienced team of professionals.