PACRA Maintains IFS Rating of Adamjee Life Assurance Company Limited

Pakistan's Life Insurance market is dominated by the public sector (~66.6% share as of Dec-23), while the private sector holds only ~33.4%. The sector players have shifted their focus from first-year persistency to second-year, prioritizing Gross Premium Written (GPW) growth. During CY23, overall GPW showed a YoY growth of ~7.7%. Out of the total, ~46.6% of the GPW pertains to renewals, followed by group life without cash value (~37.2%). Net Premium also showed a YoY increase of ~7.4%. As policy maturities and surrenders have largely trickled in, net claims grew by ~31%. To adapt, the industry holds a substantial investment book (CY23: PKR 2,021bln, CY22: PKR 1,747bln) stabilizing the overall outlook.
Adamjee Life Assurance Company Ltd. ('Adamjee Life' or 'the Company') under the umbrella of Nishat Group ('the Group') is a mid-sized life insurer. Strategic benefits from the Group's financial institute (MCB Bank Limited) are being unlocked through bancassurance. However, lately, the Company is increasing its relaince on the agency channel by expanding its branch network. The Company has registered a surplus during CY23, with takaful operations contributing ~30% to the overall GPW. Adamjee Life stands out as the sole life insurance company that places a distinct focus on single premium policies, which account for a significant ~33% of its GPW. The Company witnessed increase in subsequent year premium identifying its ability to retain clientele. Comfort is drawn from Adamjee Life's strong risk absorption capacity, represented by sufficient liquidity and overall quality of its investment portfolio.
The rating is dependent on the improvement in competitive positioning of the Company. This, along with improved core and operational profitability remains imperative to the rating. Moreover, solvency profile as indicated through reserves, must remain substantial at all times. Prudency in risk management while expanding through agency model remains important.

About the Entity
Adamjee Life Assurance Company Ltd. ('Adamjee Life' or 'the Company') is a public listed company, possessing a trading symbol of “ALIFE” on the PSX. The Company was initially incorporated as public unlisted company in Aug-08. The Company commenced its business in Apr-09 and became a listed concern in Mar-22. Adamjee Life operates in conventional business offering a number of life insurance schemes.
The Company is a subsidiary of Adamjee General Insurance, with ~91% shareholding. Rest of shareholding resides between modaraba's and general public. The BoD is chaired by Mr. Sh. M. Jawed. While, Mr. Manzar Mushtaq heads the Company as the CEO. He is assisted by an experienced team of professionals.