Lahore, August 27, 2021 (PPI-OT):The Company has witnessed slowing down of the business generated that in the past had led to Positive outlook. Impacted from increased competition within the General Insurance market and effects of the COVID-19 pandemic, the underwriting income experienced setback as Shaheen Insurance has majority portfolio within motor segment. Impetus is being added lately through the efforts of Shaheen Foundation, as they provide strategic oversight while sharing business volumes with Shaheen Insurance through subsidiaries. The Company aims to penetrate further in the non-motor segment both through captive and non-captive channels. The support from investment income is steady and bodes well for the Company. The rating derives comfort from the sound liquidity profile of the Company, especially the coverage it provides to insurance related liabilities. Going forward, growth in revenue stream along with sustaining equity level is crucial.

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. Underwritten Gross Premium of non-life insurers in India reached USD ~26.5bln in FY21, from USD ~26.4bln in FY20. The rating is dependent upon sustained improvement in business profile of the Company. Growth in revenue streams along with sustaining equity levels are crucial. Improvement in liquidity is core to 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