PACRA maintains IFS rating of The United Insurance Company of Pakistan Limited

The assigned IFS rating of the United Insurance Company of Pakistan Limited ('United Insurance' or 'the Company') is supported by its sound and established presence in the non-life insurance industry. The Company is the flagship entity of the United International Group (UIG), which maintains diversified interests across sectors, including insurance, microfinance, IT, dairy, and vehicle tracking. United Insurance operates within the non-life segment, managing both conventional (~81%) and window Takaful (~19%) operations, with active efforts underway to realize the full potential of the Takaful segment. The revenue structure is primarily anchored in the miscellaneous segment — encompassing hospitalization, travel, and bond business — which contributes ~43% of total Gross Premium Written (GPW), followed by health and other segments. Pakistan’s general insurance industry demonstrated robust growth during CY24, with sector-wide Gross Premium Written (GPW) expanding by ~18%. This growth was primarily driven by inflation-led re-pricing of insured assets, increased traction in the motor and health segments, and heightened risk awareness across the economy. However, the growth trajectory moderated in CY25, as the industry reported total GPW of ~PKR 170bln during 9MCY25, compared to ~PKR 171bln in 9MCY24, reflecting a marginal YoY decline of ~0.6%. Concurrently, underwriting performance exhibited notable pressure, with underwriting profits declining by ~50% to ~PKR 4.8bln during 9MCY25 (9MCY24: ~PKR 9.6bln). Within this context, the United Insurance Company Limited exhibited a mixed operational performance during CY25. The Company's GPW declined to PKR ~10bln (CY24: PKR ~13bln), reflecting the subdued industry environment and an elevated prior-year base. Notwithstanding this, the Company's management of ceded reinsurance supported Net Insurance Premium of PKR ~6.3bln, broadly stable year-on-year. The Company's investment book, predominantly composed of cash, bank balances, and government securities, continued to contribute to overall financial performance; however, net investment income was impacted by a one-off accounting reversal of a prior-year investment gain recognized in CY24. Profit after tax was recorded at PKR ~1.5bln (CY24: PKR ~2.0bln), with the moderation largely attributable to the aforementioned one-off reversal. United Insurance benefits from a strong panel of reinsurers and the equity base strengthened to PKR ~8.4bln (CY24: PKR ~6.4bln). While the combined ratio is at a satisfactory level, the Company's forward-looking risk profile warrants attention to its liquidity profile, especially as it seeks to diversify into the real estate and life insurance sectors. The successful and timely execution of these diversification efforts will be crucial for the stability of the ratings.
The assigned IFS rating reflects the Company’s stable topline, conservative investment strategy, and sound reinsurance framework, while remaining contingent upon maintaining adequate liquidity levels. Despite recent pressure on investment performance, comfort is drawn from management’s cost rationalization efforts, continued claims servicing, and stable, experienced leadership. Importantly, the rating committee follows a through-the-cycle approach, wherein short-term performance fluctuations are viewed in the context of long-term sustainability, supporting rating stability despite recent moderation, alongside ongoing efforts to address regulatory and group-level challenges.

About the Entity
The United Insurance Company of Pakistan Limited ('United Insurance' or 'the Company') was established in 1959 and is listed on the Pakistan Stock Exchange (PSX). The majority stake in the Company is held by United International Group (~89.3%), with the remaining shares owned by individuals and institutions (~10.7%). The Board of Directors is chaired by Mr. M. Ashraf Khan, while Mr. M. Akram Shahid serves as the CEO, supported by a team of experienced professionals.