Lahore, August 26, 2023 (PPI-OT): The ratings reflect Shaheen Insurance Company Limited's (“Shaheen Insurance” or “the Company”) association with Shaheen Foundation PAF, providing room for captive business. The Company holds a limited market share. The Company has experienced growth in GPW; however, booked losses at the underwriting level. This led to high combined ratio for the Company. Overall, the general insurance industry has a total size of ~PKR 41bln during 3MCY23 (3MCY22: ~PKR 34bln), exhibiting a growth of ~21%, in terms of Gross Premium Written (GPW).
Similarly, the underwriting performance of the industry improved and reported at ~PKR 1.5bln during 3MCY23 witnessing an increase of ~25% (3MCY22: ~PKR 1.2bln). Improved underwriting and investment performance contributed to the industry's earnings reported at ~PKR 4bln during 3MCY23 (3MCY22: ~PKR 3.4bln). Shaheen Insurance's profitability also gathers support from its investment income, generated mainly from investments in government securities and equity instruments, nonetheless remains adequate.
Going forward, the management aims to expand their captive and non-captive business stream, while managing their risk profile so as to keep the reinsurance agreements intact. However, current economic conditions remain imperative for the overall performance. Financial risk of the Company remains stressed due to stretched claims, despite stability in claim efficiency and liquidity aspect. Equity base remain stable.
The rating is dependent upon sustained improvement in business profile of the Company. Growth in revenue streams are crucial. Sustaining equity levels and improvement in liquidity is core to the rating. This along with better investment income and corporate governance framework remains imperative for sustaining the rating.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: [email protected]
Website: www.pacra.com