Lahore: The Pakistan Credit Rating Agency Limited (PACRA) has affirmed the Insurer Financial Strength (IFS) rating of IGI Life Insurance Limited, highlighting the company's resilient financial performance and robust corporate governance framework. This decision comes as the life insurance sector in Pakistan experiences a significant growth phase, underscored by an increase in Gross Premium Written (GPW) and profitability metrics.
The life insurance industry in Pakistan remains predominantly led by public-sector insurers, holding approximately 61% of the market share as of December 2024. The private sector, including companies like IGI Life, accounts for the remaining 39%. The industry reported a GPW of around PKR 434 billion for the calendar year 2024, reflecting a 7% year-on-year increase from PKR 406 billion in 2023. Net claims also saw a slight rise to PKR 374 billion compared to the previous year's PKR 367 billion.
Investment income in the sector has been a key driver of profitability, rising by 60% to PKR 467 billion. This increase in investment returns has propelled the Profit After Tax (PAT) to PKR 23 billion, up from PKR 20 billion the previous year. The total investment portfolio of the industry expanded to PKR 2,518 billion, an increase from PKR 2,021 billion year-on-year. The industry's outlook remains stable, supported by favorable underwriting metrics and strong investment returns.
IGI Life Insurance Limited, affiliated with the established Packages Group, benefits from a robust corporate governance framework. The company has actively optimized its portfolio by phasing out loss-making lines, which has enabled it to build underwriting surpluses and efficiently settle claims. With persistency rates of 63% for first-year policies and 74% for second-year policies, IGI Life showcases strong policyholder retention.
In 2024, IGI Life's GPW surged by 69%, driven by effective distribution through bancassurance and agency channels. The company has delivered profits from core operations, maintaining a prudent investment mix, with about two-thirds allocated to government securities. IGI Life's financial strength is supported by ample liquidity and a solid equity base, benefiting from disciplined underwriting and investment income.
The company's 'Vitality' wellness program continues to enhance policyholder engagement and improve underwriting outcomes. The rating is contingent on sustained improvement in IGI Life's business and financial risk profile, alongside maintaining an improved equity and liquidity profile to support policyholder liabilities. The performance of the 'Vitality' program remains crucial to the company's ongoing success.