Final PR
The Pakistan Credit Rating Agency Limited

Jhangeer Hanif

Iqra Bashir

Applicable Criteria

  • Life Insurance and Family Takaful (Jun 16) [View]
  • Rating Modifiers | Outlook and Rating Watch (Jun 16) [View]

Related Research

  • Sector Study | Insurance | Life (Apr 16) [View]
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PACRA Maintains IFS Rating of State Life Insurance Corporation of Pakistan
 Rating Type IFS
 Action Maintain
 Long Term AAA
 Short Term -
 Outlook Stable
 Rating Watch -

The rating reflects State Life Insurance Corporation's utmost risk absorption capacity on the back of Government of Pakistan's (GoP) guarantee for policyholders' liabilities. The sum insured including bonuses (if any) declared by State Life Insurance Corporation are guaranteed as to payment in cash by GoP under article 35 of the Life Insurance (Nationalization) Order, 1972. The rating takes into account State Life Insurance Corporation’s sound market position in life insurance industry emanating from extensive and well-penetrated distribution network, experienced management team and robust financial profile. This makes State Life Insurance Corporation the largest player, capturing half of industry's premium. The Corporation is pursuing a growth strategy wherein, while focusing on existing business lines, it intends to expand its product offerings - Bancassurance, Window Takaful and Microinsurance. State Life Insurance Corporation has taken up Government initiated health programmes, reaching public at grass-root level. This, while bringing volumes, would facilitate sustaining market position in the wake of increasing competition from the private sector. SLIC's policyholder's obligations are supported by a sound and low risk investment portfolio; hence any drag on its capital base is unlikely.

State Life Insurance Corporation's ability to maintain its leadership in the life insurance sector is important. In this regard, successful execution of the envisaged business strategy including diversification and growth is essential. Meanwhile, updating IT infrastructure and user-friendly online portal for policyholders would be a key challenge. Although SLIC is proposed to be converted into a public company, relevant time line remains uncertain.
About the Entity
State Life Insurance Corporation of Pakistan (SLIC) was incorporated in March 1972 when the life insurance business in Pakistan was nationalized. Currently, the Corporation operates through a widespread sales network throughout Pakistan and also has presence in the Middle East. State Life Insurance Corporation is the largest life insurer in Pakistan with ~ 50% market share that it aims to maintain.

The Corporation has seven members board including the Chairman. Board members are a good mix of individuals belonging to public sector, State Bank of Pakistan, and private financial and corporate sectors. The management team comprises Executive Directors nominated by Federal Government on deputation, who are assisted by a team of professionals, associated with the Corporation since long.
The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.