PACRA Maintains IFS Rating of Premier Insurance Limited

The rating reflects Premier Insurance Ltd.'s ('Premier Insurance' or 'the Company') association with Crescent Group, which holds a significant presence in the textile, sugar, steel and power segments of Pakistan and the Company’s long-standing presence in the insurance industry. During CY23, the Company’s GPW declined by ~10%, reporting at PKR 700mln. The Company also saw a reduction in its net insurance claims expense, which led to a decrease in its underwriting loss. However, it remained unable to generate positive returns. The Company's investment income saw a significant uptick leading to improved net income during CY23. The combined ratio has slightly improved but remains inflated due to higher legacy claims from fire and property segments. The management remains cognizant and needs a cautious approach to manage the risk profile of the Company. Despite strong coverages, stretched claim efficiency stretches the financial risk of the Company. However, equity base and reinsurance agreements remain stable.
During 3MCY24, GPW of the General Insurance industry held a total size of PKR 48bln (3MCY23: PKR 41bln), posting growth of ~17%. Underwriting performance also improved by ~103% (3MCY24: PKR 3bln, 3MCY23: PKR 1.5bln). Improved underwriting and investment performance contributed to the industry's earnings (3MCY24: PKR 6.3bln, 3MCY23: PKR 4bln). However, current economic conditions remain imperative for the overall performance of the insurance industry.
The rating is dependent on the performance matrix. Additionally, the management must prudently handle the insurance asset liability structure, ensuring timely premium realization and efficient claims settlement. A sustained improvement in its financials, coupled with effective risk mitigation remains crucial to the rating. The risk profile of the Company needs to be monitored diligently.

About the Entity
Premier Insurance Limited ('Premier Insurance' or 'the Company') was incorporated as a listed concern, on PSX, in 1952. The Company operates through two business hubs: South and North. The Crescent Group (the Group) and its associated companies hold ~70% shareholding of the Company, followed by State Life Insurance Corporation holding ~11% stake. The Group operates in diversified sectors of textile, steel, sugar, and power. The Board is chaired by Mr. Khalid Bashir. While, the Company is headed by Mr. Nadeem Maqbool, as the CEO. He is aided by a team of experienced professionals.