PACRA Maintains IFS Rating of Pak Qatar Family Takaful Limited

The life insurance sector in Pakistan remains largely dominated by public-sector insurers, accounting for ~61% of the market as of CY24, with private companies covering the remaining ~39%. During CY24, the industry recorded a GPW of ~PKR 434 bln, marking a healthy ~7% YoY increase from ~PKR 404bln in CY23. Net claims edged up slightly to ~PKR 374bln (from ~PKR 366bln), reflecting sustained claims activity. The sector’s profitability gathered support from a robust investment income of ~PKR 467bln, up ~60% from ~PKR 292bln, driving Profit After Tax (PAT) to ~PKR 23bln, up from ~PKR 20bln in the previous year. The industry's total investment portfolio also expanded, reaching ~PKR 2,518bln from ~PKR 2,027bln YoY. The overall outlook remains stable, underpinned by favorable underwriting metrics and continued strength in investment returns.
Pak Qatar Family Takaful Limited (“Pak Qatar” or “the Company”) benefits from strong sponsor support, reflected in its robust governance structure and growing market presence. In CY24, the Company improved its market share in the family takaful segment to ~6.6% (up from ~4.4% in CY23) and achieved ~77% YoY growth in Gross Contribution Written, largely driven by single-premium business. Despite this momentum, both first-year and renewal persistency declined, highlighting challenges in policyholder retention. Pak Qatar's underwriting results recorded a significant increase due to disciplined risk selection and operational efficiency. However, claims outstanding increased by ~22%, driven by higher maturities and surrenders, placing pressure on cash flows. Investment income, predominantly from gains on investment revaluation and disposals, supported profitability. A key strength is Pak Qatar’s technical partnership with FWU AG of Germany, which enhances technical proficiency and strategic product development. The Company also maintains ample liquidity and a solid equity base, providing confidence in its ability to meet policyholder obligations. Improvement in the persistency and expanding market share, diversifying beyond bancassurance, and further strengthening financial metrics remain imperative to rating. The Company holds a stable equity base.
The rating takes comfort from the ability of the Company to capitalize on the market share whilst sustaining the performance. Maintaining the surplus in the takaful fund and liquidity position is essential. while continuing to focus on improving profitability.

About the Entity
Pak Qatar Family Takaful Limited (‘Pak Qatar’ or ‘the Company’), a dedicated family takaful provider, began operations in 2007 as an unlisted public company and operates through a network of more than 160 branches.
Major ownership is vested with Mr. Said Gul and his affiliated entity (~40.5%), alongside H.E. Sheikh Ali Bin Abdullah Al-Thani and Associated Institutions (~32.3%), and FWU AG, a technical partner based in Germany (~15.2%). The remaining stake is distributed among various individual investors (~12%). The Board is chaired by H.E. Sheikh Ali Bin Abdullah Al-Thani, a member of the Qatar Royal Family. Mr. Waqas Ahmad, appointed as the CEO in Jun-24, is supported by an experienced team.