Lahore, August 27, 2021 (PPI-OT):The rating reflects continuing efforts of the new leadership to steer the Company towards positive performance. Premier Insurance is cautiously underwriting business, though the market share remained limited. Annual and three-month financials showed slight signs of improvement which bodes well for the Company going forward. Gross Premium and Underwriting results improved which is especially welcomed when considering these numbers are compared to pre COVID-19 pandemic slowdown.

However, the equity levels going forward must be maintained as the unappropriated loss amount is concerning. The new leadership have envisaged a business plan in order to steer Premier Insurance into profitable growth. Efforts are afoot, upturn in economic activity is expected to expediate the recovery process.

In terms of Gross Premium Written (GPW), Pakistan’s general insurance industry had a total size of PKR ~108,322mln in CY20, (less than ~1% of its GDP), with a growth of ~3.7% from the previous year (CY19: PKR ~104,453mln). The insurance industry in Pakistan is relatively small compared to its peers in the region. The insurance penetration and density remain very modest as compared to other jurisdictions while the insurance sector remains underdeveloped relative to its potential. Gross premiums written of non-life insurers in India reached USD ~26.5bln in FY21, from USD ~26.4bln in FY20.

The rating is dependent on positive performance matrix. Meanwhile, the management has to carefully manage its insurance asset liability structure wherein timely realization of outstanding premium along with smooth settlement of claims is critical. Any further dilution in the risk profile of the Company may impact 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: hammad.rashid@pacra.com
Website: www.pacra.com