The Pakistan Credit Rating Agency Limited
28-Feb-20
Analyst
Faraan Taimoor
faraan.taimoor@pacra.com
+92-42-35869504
www.pacra.com
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Related Research
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PACRA Maintains IFS Rating of IGI General Insurance Limited
| Rating Type | IFS | |
|
Current (28-Feb-20 ) |
Previous (29-Aug-19 ) |
|
| Action | Maintain | Maintain |
| IFS Rating | AA | AA |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The rating of IGI General Insurance Limited draws comfort from the growing business volume under the stewardship of an able team.The Company has witnessed high growth signifying it's improving position in the industry. The composition of the book is well balanced with almost equal proportion emanating from the direct business. In this, the business relationships of the group also play a pivotal role, whereby a number of multi-national companies obtain insurance coverage from IGI. Largest growth has been seen in the Motor segment. Improvement in the IT infrastructure is helping the company in bringing efficiency - notably in claims management. Underwriting profits improved with contributions from both premiums side as well as claims. Post de-merger,the parent company, IGI Holdings Limited has injected a sizeable capital into the company.This is preserved mostly as in the form of liquid investments. The Hold Co has an express mandate to proactively support the company in times of need. The top group resources provide strategic direction and oversight.The assigned rating also takes into account its association with Packages Group and comfort is drawn from its sound governance practices of the group.
The rating remains dependent on the management's ability to strengthen its market position in a competitive landscape while ensuring underwriting profitability. The liquid investment book need to be preserved and indeed improved in line with the growing business volumes.
About
the Entity
IGI Holdings holds 100% stake in the company. IGI Holdings is owned by Packages Group, which is ranked amongst the renowned industrial groups of the country, having diversified interests in packaging, dairy, pharmaceutical, and financial sectors.The overall control of the company vests in six-member Board of Directors comprises two executive directors and four non-executive directors representing the main sponsoring family.
A.F. Ferguson & Co. Chartered Accountants issued an unqualified audit report pertaining to financial statements for CY18. The company has a comprehensive organizational structure with clearly demarcated reporting lines, ensuring segregation of duties. Mr. Tahir Masaud, CEO, is an ACII and MBA from LUMS, having diversified national and international insurance related experience of over 20 years.