Lahore: The Pakistan Credit Rating Agency Limited (PACRA) has upgraded the Insurer Financial Strength (IFS) rating of Pak-Qatar Family Takaful Limited, citing the company's strong financial performance and market growth. The upgrade reflects Pak-Qatar's solid governance, robust liquidity, and strategic market positioning in the life insurance sector.
Pak-Qatar Family Takaful Limited, backed by strong sponsor support, has displayed significant growth in its gross premium written (GPW), which increased by approximately 3% in the first nine months of the current fiscal year. The company's market share in the life insurance sector rose to around 6.3%, up from 4.4% previously, driven largely by single-premium business.
The life insurance sector, dominated by the public sector with a 58% market share, recorded a gross premium written of approximately PKR 196 billion in the first half of the fiscal year, reflecting a year-on-year growth of 16%. Pak-Qatar's success is attributed to disciplined risk selection and operational efficiency, which led to a notable increase in underwriting results.
Despite challenges with first-year and renewal persistency, Pak-Qatar has managed to stabilize its claims outstanding as of the third quarter, supported by its strong liquid profile. The company's investment income, primarily from revaluation gains and disposals, has bolstered profitability, maintaining stability in its financial outlook.
In addition to its financial performance, Pak-Qatar's application for listing on the Pakistan Stock Exchange (PSX) is expected to enhance compliance and risk mitigation measures, further solidifying its business model. The company's strategic focus on diversifying beyond bancassurance and improving persistency and market share remains crucial for future growth.
PACRA's rating upgrade underscores Pak-Qatar's ability to manage risk effectively and capitalize on new opportunities. The company is well positioned to meet the Securities and Exchange Commission of Pakistan's (SECP) enhanced equity requirement of PKR 3 billion within the designated timeframe, reinforcing its competitive edge in the market.
The company's continued emphasis on prudent risk management and its commitment to maintaining a surplus in the takaful fund will be vital in sustaining its upgraded rating and achieving long-term profitability.