Lahore, July 16, 2021 (PPI-OT):The Rating of Askari Life Assurance Company Limited (the Company) is based on its core sponsorship from the Army Welfare Trust, unlocking synergistic benefits as well as providing explicit commitment in times of financial crisis. The Army Welfare Trust has an established presence in the insurance industry through Askari General Insurance (Rated AA).
A deficit for the year has occurred due to its initial year of operations, however improvement in the profitability through growth in single premium revenue and regular premium revenue along-with increased exposure in banc assurance provides comfort to the rating. The risk absorption capacity and capitalization levels are moderate. Any dilution therein has the comforting backing of the sponsor. Increase in market share along with converting underwriting losses into profitability remains crucial. Moreover, maintenance of adequate capital in wake of increasing business volumes and consequent support from sponsors would remain important.
During CY-20, the total GPW of the industry grew by 4.6% to PKR 233bln, as against a decline of 1.2% to PKR 223bln in CY-19. COVID-19 is an ongoing challenge. While it has taken a toll on many businesses, its ramifications are still unfolding. However, due to current pandemic situation, the demand for Life Insurance products is expected to increase over near term which in-turn is expected to result in new business growth for the industry.
Sustained improvement in the business and financial risk profile of the company in line with their relative positioning in the industry remain vital to the rating. Concurrently, the liquidity profile of the Company should continue to cushion the policyholder’s liabilities. Growth in topline and underwriting profits remain essential.
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: hammad.rashid@pacra.com
Website: www.pacra.com