Lahore, August 11, 2021 (PPI-OT):The rating of Universal reflects strong parentage of the Company – Bibojee group. The group has provided multi-faceted support to the Company: a) injection of capital from different times of the crisis, b) sustenance in the cleansing period spanning over a couple of years, c) captive business. The business strategy envisages tapping captive business through co-insurance with an established group, with gradual entry into the market business in the pipeline. Currently, the Company is underwriting captive business through a co-insurance agreement with a large sized Company. Universal Insurance expects to start direct underwriting business operations in the near future, depending upon the strategic direction as decided by the BOD.
Company plans to achieve business growth through expansion of branch network and recruitment of business development officers. This is expected to uplift the profitability, which is subdued currently. All head of departments are in place; moving forward the Company is ready to build a team of professionals once the direct underwriting commences. It has minimal amount of liabilities and claims on its balance sheet which will provide the company impetus moving forward. Enlistments with some of the leading banks have been completed as the management envisages improved business volumes moving forward.
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. The rating is dependent upon sustained improvement in relative position of the company, augmenting its sustainability, as envisaged by the board and the management. Meanwhile, continued improvement in the business and financial profile of the company is also imperative for 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