Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has upgraded the insurer financial strength (IFS) rating of East West Insurance Company Limited from ‘AA’ to ‘AA+’ (ifs), reflecting the company’s robust performance and strong market standing in the insurance sector.
According to The Pakistan Credit Rating Agency Limited, the upgrade highlights East West’s consistent growth and prudent management of its insurance portfolio, which remains predominantly focused on conventional insurance products, constituting approximately 91% of its operations. The agency noted a 23% growth in the company’s gross premium written in the first half of 2024, reaching around PKR 3.9 billion, driven by both volume increase and enhanced value.
East West Insurance has maintained a stable risk profile through diversified offerings that include significant segments such as fire and property insurance, engineering, motor, and marine, aviation and transport coverage. The substantial growth in these areas has contributed to East West’s solid underwriting performance and profitability, supported further by a stable investment book.
The company’s strategic focus on digitalization is expected to further enhance business operations and customer engagement. The recent capital infusion of PKR 263 million through a rights issue has also bolstered the company’s financial standing, providing additional support to sustain its growth trajectory.
While PACRA has advised vigilance due to extended receivable days and potential impairments, it recognizes East West’s strong liquidity position and substantial cash flows as foundational to its upgraded rating. The company’s governance is also being strengthened through effective succession planning, with a focus on integrating a younger generation into leadership roles to support continuity and innovation.
The ongoing rating will depend on East West’s ability to maintain or expand its market share, enhance profitability, and uphold its liquidity in line with growth aspirations. The reinforcement of underwriting discipline and maintaining a robust cushion from underwriting activities are deemed crucial for future rating considerations.