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The Pakistan Credit Rating Agency Limited

Date
29-Sep-2017
Analysts
Jhangeer Hanif
jhangeer@pacra.com

Faraan Taimoor
faraan.taimoor@pacra.com

+92-42-35869504
www.pacra.com
Applicable Criteria

  • Methodology | Insurer Financial Strength (IFS) Rating | General (Jun 17) [View]

Related Research

  • Sector Study | General Insurance (Nov 16) [View]
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PACRA Maintains IFS Rating of Shaheen Insurance Company Limited
 Rating Type Insurer Financial Strength(IFS)
Current
(29-Sep-2017)
Previous
(10-Mar-2017)
 Action Maintain Upgrade
 IFS Rating A A
 Outlook Stable Stable
 Rating Watch - -

The rating reflects Shaheen's Insurance strong parentage - Shaheen Foundation - ensuring financial soundness of the company while augmenting its business operations and control environment through active vigilance. The significant improvement in the liquidity profile emanates from fresh equity issuance. Shaheen Insurance has sustained market share keeping pace with the industry's growth. Dominating portfolio ¬ motor ¬ is depicting good underwriting results, enabling the company to nourish other segments; for which the company is enhancing linkage with financial institutions. The company is expanding into other segments, leading to a diversified premium mix. The company carries support from investment income; gradually improving. The recent drive to invest in real estate sector needs to enmesh with the liquidity requirements of the company.

The rating is dependent upon sustained improvement in business profile of the company. This requires enduring emphasis on underwriting profitability and building requisite human resource. Given increasing size of investment book, investment policy statement needs elaboration and performance tracking mechanism. The company has adequate balance between insurance assets and liabilities that should be kept intact.
About the Entity
Shaheen Insurance commenced commercial operations as a general insurance company in 1995, and is currently listed on the Pakistan Stock Exchange. With its head office in Karachi, the company has a nationwide network of 11 branches. It is majority owned by Shaheen Foundation Group and affiliates with its shareholding increasing after the issue of right shares to 73.4% (previous: 64.6%) followed by Hollard Insurance (10.6%).

The overall control of the company vests in the seven¬ member BoD. All directors represent SF, resulting in SF having complete dominance on the board. Chairman of the board, Air Marshal Muhammad Jamshed Khan (Retd.), is MD of Shaheen Foundation. DMD of SF, Air Vice Marshal Syed Razi Ul Hassan Nawab (Retd.), is a non executive director of the company. Mr. Sohail Najam Kidwai, CEO of the company since Jan¬14, has been associated with the company at a senior position in the past; and possesses over two decades of insurance experience. He is assisted by a team of professionals.
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.
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