PACRA Maintains IFS Rating of TPL Life Insurance Limited

The assigned rating of TPL Life Insurance Limited (the "Company") reflects its sustained business progression. The rating incorporates the Company's strategic transformation from a corporate-centric insurer into a digitally enabled retail house, underpinned by a diversified partnership ecosystem spanning microfinance collaborations, bancassurance, and direct distribution channels. Furthermore, the Company's improving product mix—with growing contributions from health, accident, and unit-linked lines—together with its robust reinsurance arrangements with globally rated counterparties Munich Re (AA-) and Gen Re (AA+), lends comfort to its underwriting stability and claims-paying ability. TPL Life delivered a resilient financial performance in CY25 despite prevailing macroeconomic headwinds and the one-off impact of reverse merger-related expenses. Gross premiums grew by 29% to PKR 506 million, supported by healthy expansion across the health, accident, and unit-linked segments. The investment portfolio remained stable at PKR 369 million as of end-CY25, with the largest allocations toward government securities (PKR 241 million) and term deposits (PKR 102 million). This allocation strategy continued to provide adequate liquidity while preserving diversification benefits. Cash and bank balances stood at PKR 876 million, accounting for approximately 60% of total assets, reflecting a strong liquidity buffer. The Company's earnings base remains anchored in its diversified distribution network, particularly its bancassurance and microfinance partnerships. In parallel, the Globewell healthcare suite caters to the high-net-worth segment, adding further depth to the product offering. The unit-linked business also gained strong momentum, with gross premiums rising to PKR 119 million in CY25 (CY24: PKR 53 million), contributing to fee-based income growth and enhanced policyholder engagement. Claims performance remained within manageable levels during CY25, with the net claims-to-net premium ratio improving slightly to 19.7% (CY24: 20.8%), supported by prudent underwriting practices and strengthened claims oversight. Operational efficiency also improved notably, with the combined ratio declining to 156.9% (CY24: 236.3%), driven by cost rationalization initiatives and the absence of prior-year one-off expenses such as bad debt provisions. The company reported a loss of PKR 208 million in CY25, though narrowing from a loss of PKR 340 million in CY24. The equity base stood at PKR 263 million at year-end CY25, supported by a PKR 190 million capital injection from the parent company, underscoring continued sponsor support for regulatory solvency. There is a strong need for capital enhancement.
The rating is dependent on the Company’s ability to improve gross premiums and, in turn, underwriting profits. Maintaining adequate liquidity is pivotal for the rating. Solvency profile, as indicated through reserves, must be strengthened.

About the Entity
TPL Life Insurance Limited (‘TPL Life’ or ‘the Company’) was incorporated as a public unlisted company in Mar-08 and got listed on the PSX in Jun-24. The Company commenced its business in Mar-09 after obtaining the license to carry out operations. TPL Life is mainly engaged in the life insurance business, including ordinary life business and accidental and health business. The Company is a subsidiary of TPL Corp. with ~94.21% shareholding. The rest of the shareholding resides with members other than directors. The BoD is chaired by Mr. Jameel Yusuf. Mr. Saad Nissar heads the Company as the CEO. He is assisted by an experienced team of professionals.