Press Release

JCR-VIS upgrades IFS rating of Pak Qatar Family Takaful Limited
 

Karachi, July 18, 2018: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has upgraded the Insurer Financial Strength (IFS) rating of Pak Qatar Family Takaful Limited (PQFTL) from ‘A’ (Single A) to ‘A+’ (Single A Plus). Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on June 23, 2017.

Assigned rating continues to derive strength from PQFTL’s sponsor profile primarily comprising Qatar based financial institutions. The recent equity injection of Rs. 248.7m has demonstrated sponsor support and provides strength to the assessment of overall risk profile of the institution. The rating assigned to PQFTL incorporates its high capacity to meet policyholder obligations reflected by its adequate capitalization and liquidity profile.

Change in rating also reflects PQFTL’s increasing presence in the life insurance/family takaful market. PQFTL has witnessed significant growth in contributions through sale of unit linked individual family products in which risk associated with investments in Participants Takaful Fund is mostly borne by the takaful participants. Business generated through the bancatakaful channel has been the primary driver of growth in contributions. Maintaining high persistency levels and surrender rate within manageable limits will be important for sustainable growth.

Given the growth in unit-linked policies, assets under management have witnessed significant increase during the period under review. Investment portfolio is considered healthy and comprises a mix of both government securities and listed equities. However, during 2017, performance of the funds under management was adversely impacted on account of the downturn in stock market, as was witnessed across the entire financial sector. Asset allocation and reinstatement of returns on investments would be amongst the key rating drivers, going forward. Moreover, ratings are dependent upon ability of PQFTL to maintain healthy profitability metrics.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 201) or Ms. Muniba Khan (Ext: 214) at (021)-35311861-71 or fax to (021)-35311872-3.

Atiq Anwar Mahmudi
Advisor
Applicable Rating Criteria: Life Insurance & Family Takaful (Oct 2017)
http://jcrvis.com.pk/docs/LifeTakaful%20201710.pdf

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Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited (JCR-VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. JCR-VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings. JCR-VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2018 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited