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The Pakistan Credit Rating Agency Limited

Date
28-Feb-2017
Analysts
Amara Gondal
amara.gondal@pacra.com

Iqra Bashir
iqra.bashir@pacra.com

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

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

Related Research

  • Sector Study | General Insurance (Nov 16) [View]
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PACRA Maintains IFS Rating of Pak Qatar General Takaful Limited
 Rating Type Insurer Financial Strength(IFS)
Current
(28-Feb-2017)
Previous
(29-Feb-2016)
 Action Maintain Maintain
 IFS Rating A A
 Outlook Stable Stable
 Rating Watch - -

PakQatar - being an early entrant in Islamic insurance (takaful); both general and life - has achieved good brand recognition. This gives strength to PQTL's business profile. The rating, in addition to this, reflects sound risk absorption capacity of the company. Capital injections over recent period have augmented this. Notably, the management follows a conservative stance (high liquidity, low risk philosophy) for its investment book. Hence, stable, though relatively low, investment income supplements profits. The management has made concerted efforts to establish PQTL's business positioning; the efforts need to continue in the wake of intensive competition from window takaful. The business plan is gradual penetration into non-motor avenues, after shedding off health to group’s family takaful company. Recent engagements in the top management, having exposure to the insurance industry, has benefitted PQTL. Association of the company with Qatar-based investors is also a consideration.

The rating is dependent on the management’s ability to cohesively execute the business plan; herein, improvement in market share and underwriting profitability is also important. Meanwhile, prudent management of premium receivables from corporate customers is essential. Furthermore, implementation of real time IT infrastructure along with recently upgraded MIS should, among others, strengthen the claims management system.
About the Entity
PQTL, incorporated in 2006, started operations in 2007. H.E. Sheikh Ali bin Abdullah Al-Thani - member of Qatar's Royal Family - is the key sponsor of the company. He, directly and through his different Qatar-based Financial Institutions (mainly Qatar International Islamic Bank, Qatar Islamic Insurance Company, Masraf Al-Rayan) control around 53% stake in PQTL. The other major sponsor is Mr. Said Gul, who controls around 37% stake. Mr. Gul, a Pakistani origin businessman settled in Qatar, has main interest in construction business. These sponsors also own majority stake in Pak-Qatar Family Takaful.

The company has a seven-member board; chaired by H.E. Sheikh Al-Thani. Majority of board members are executives of sponsoring financial institutions and associated with the company since inception. Mr. Said Gul had been Managing Director and CEO since 2010. In July'15, function of CEO separated and Mr. Javed Muslim, as CEO, joined the company. He carries insurance related experience of over two decades. Mr. Altaf Ahmed, with experience of above 25 years, has joined as the Head of Operations (HOO), in Jul'15. The management team comprises qualified and experienced 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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