The Pakistan Credit Rating Agency Limited
28-Aug-19
Analyst
Zeeshan Munir
zeeshan.munir@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
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PACRA maintains IFS Rating of Askari General Insurance Company Limited
| Rating Type | IFS | |
|
Current (28-Aug-19 ) |
Previous (27-Feb-19 ) |
|
| Action | Maintain | Maintain |
| IFS Rating | AA | AA |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The rating captures the solid risk profile of the company along with improved profitability. The company strategy led to volumetric growth over the years and improved core underwriting performance. Askari Insurance has been able to keep expenses under check while pursuing growth. AWT is the sponsor behind AGICO. It has demonstrated support to the company, last equity injection is a witness.
The rating also incorporates ensuring synergistic and oversight benefits from its association with AWT. The sustained liquidity profile provides a cushion to the risk absorption capacity.
The management efforts for sustaining the overall quality of control environment, supported by real-time operating software providing tools for holistic oversight and efficient decision making had borne fruits in the past. Going forward, it intends to fortify its position in non-conventional segments, while using alternative distribution channels.
The rating is dependent upon AGICO's ability to sustain its market share and its profitability from the core business and investment income as well. At the same time, the proportional improvement must be recorded in its liquidity.
About
the Entity
Askari General Insurance Company Limited, listed at Pakistan Stock Exchange, commenced commercial operations in 1995. The company operates a nationwide network of 20 branches with head office in Rawalpindi. The controlling stake is with AWT (59%). AWT was set up in 1971 by Pakistan Army for promoting the welfare of retired personnel of the Army and their families through the creation of income and employment generating activities. AWT is currently engaged in real estate, security services, sugar, and lubricants. It manages a sizable book of strategic investment, which yields a significant amount of dividend every year to the fund.
AGICO board comprises eight-members excluding the CEO. The board includes retired army officials, senior executives of AWT, and two independent members. Mr. Abdul Waheed, CPA (USA) - a seasoned professional having a deep understanding of insurance business - is CEO of AGICO since July 2010. A team of professionals assists him.