PACRA Maintains IFS Rating of IGI Life Insurance Limited

The assigned ratings reflect IGI Life Insurance Limited's (the "Company") strong sponsorship profile under the Packages Group, disciplined underwriting framework, improving profitability trajectory, and prudent investment management practices. The Company's flagship wellness-linked product, "Vitality," distributed through bancassurance and agency channels, continues to support growth in the individual regular premium segment while enhancing policyholder retention. Despite elevated claims experience during CY25, primarily attributable to higher unit-linked policy surrenders, the Company's core operating performance remained resilient, supported by increasing renewal premium inflows and a conservative asset allocation strategy with significant exposure to low-risk instruments. The Company's sound capitalization and adequate liquidity profile provide comfort regarding its capacity to meet policyholder obligations. Furthermore, a diversified distribution network comprising multiple bancassurance partnerships, agency channels, and digital aggregators enhances franchise strength and supports stability in the premium base. Pakistan’s life insurance industry sustained its growth trajectory during CY25; gross premium grew by 13.8% to PKR 496,919 million (CY24: PKR 436,709 million). The operating environment reflected easing inflationary pressures and a declining interest rate cycle, which influenced both product demand and investment yields across the sector. Within this landscape, IGI Life reported GPW of PKR 14,105mln during CY25, translating into a market share of 2.8% (CY24: 3.1%). Premium growth moderated to 4.5% (CY24: 68.8%), reflecting the high base effect arising from substantial single-premium business generated in the previous year. The Company's investment portfolio expanded to PKR 38,386mln as of end-CY25 (CY24: PKR 34,641mln), representing approximately 88% of total assets. During the year, IGI Life strategically reduced its exposure to government securities to PKR 14,733mln (CY24: PKR 23,400mln) while increasing allocations toward mutual funds to PKR 23,362mln (CY24: PKR 10,949mln) to optimize returns amid a declining interest rate environment. The Company manages 13 conventional unit-linked funds and 3 Window Takaful funds. During CY25, the conventional Aggressive, Balanced, Secure, and Conservative Funds generated gross returns of 34.1%, 23.8%, 11.2%, and 11.7%, respectively, while accumulated Window Takaful funds under management reached PKR 10.4bln. The portfolio's substantial allocation to liquid instruments supports effective liquidity management. Net insurance benefits increased to PKR 11,300mln in CY25 (CY24: PKR 5,570mln), primarily due to higher unit-linked policy surrenders amounting to PKR 7,778mln (CY24: PKR 3,850mln), alongside elevated group health and life claims. Consequently, the net claims-to-net premium ratio increased to approximately 82.9% (CY24: 42.5%), broadly in line with sector trends. Profit after tax improved by 52% to PKR 423mln in CY25, marking the third consecutive year of profitability. Shareholders' equity strengthened to PKR 2,698mln (CY24: PKR 2,279mln), supported by retained earnings, while paid-up capital remained unchanged at PKR 1,706mln.
The ratings remain dependent upon sustained strengthening of the Company's business and financial profile, supported by adequate capitalization and liquidity.

About the Entity
IGI Life Insurance Limited (‘IGI Life’ or ‘the Company’), a public listed company, listed on the Pakistan Stock Exchange, started its operations in May-95. The Company operates as a life insurance company. IGI Holdings holds the majority stake in the Company (~82.69%), whereas the remaining shareholding is distributed between a consortium of institutions, individuals, directors, and related parties. IGI Life’s Board is chaired by Mr. Shamim Ahmad Khan, while Mr. Ali Nadim is the CEO of the Company. He is assisted by a team of experienced professionals.