Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has maintained the Insurer Financial Strength (IFS) rating of 5th Pillar Family Takaful Limited, highlighting the company's robust sponsor profile and strategic market positioning. The company's growth in gross contributions and expansion of its investment portfolio underscore its resilience in Pakistan's evolving insurance landscape.
According to PACRA, the rating reflects the strong backing of 5th Pillar Family Takaful Limited by a consortium of experienced sponsors, including Kuwait International Investment Holding Company, IFA Group Kuwait, 5th Pillar Holdings Limited from the UAE, and Muhammadi Family & Associates of Pakistan. This support is crucial in providing the company with financial strength and continued capital backing. The company offers Shariah-compliant savings and protection products, with a unique focus on Hajj and Umrah savings, leveraging bancatakaful and direct sales channels for business generation, and planning to expand into digital channels.
The life insurance sector in Pakistan saw gross premiums rise by 13.8% to PKR 496.9 billion in the calendar year 2025, driven by easing inflation and lower interest rates. Although 5th Pillar Family Takaful Limited holds less than 1% market share, it recorded a substantial growth in gross contributions by 224% to PKR 1,815.6 million in 2025. Individual Family Takaful contributions increased significantly through bancatakaful channels and Hajj/Umrah savings products, while Group contributions rose by 30%. The company's net contribution revenue also increased by 274% to PKR 1,663.5 million.
The total number of policies in force grew to 5,162 by the end of 2025, indicating rapid business scale-up. The investment portfolio expanded by 33% year-on-year to PKR 2,478.8 million, primarily invested in Government Ijarah Sukuk, despite a decline in investment income due to lower yields. The company's liquidity remains robust, with liquid assets covering claims 24.4 times over. The net claims ratio stood at 12.7%, supported by effective retakaful arrangements.
Despite reporting a loss of PKR 319.5 million in 2025 due to higher business expenses, the company's equity position remains under pressure. The ratings are contingent upon continued sponsor support, sustained business growth, and successful transition towards profitability. Maintaining adequate liquidity and prudent investment allocation are essential for the company's future stability.