Press Release

JCR-VIS Maintains IFS Rating of Pak Qatar General Takaful Limited

Karachi, March 2, 2016: JCR-VIS Credit Rating Company Limited has maintained the Insurer Financial Strength Rating of Pak Qatar General Takaful Limited (PQGTL) at ‘A-’ (Single A Minus). Outlook on the assigned rating has been revised from ‘Positive’ to ‘Stable’. The previous rating action was announced on December 31, 2014.

The assigned rating incorporates the ownership structure of PQGTL comprising prominent Qatar based financial institutions. Sponsors have demonstrated financial support with a total commitment of Rs. 200m earlier; all of which was planned to be received by end-March 2015. With a major portion of this equity received in the form of right shares, a balance of Rs. 11.3m is expected to be injected in the coming years. Enhancement in equity base is expected to improve the rising leverage indicators; leverage indicators of the company remain on the higher side as compared to peers on account of current capitalization levels.

During FY15, the company booked total business of Rs. 701.7m. Growth of aggregate top-line has been negative largely on account of shifting of health business to Pak-Qatar Family Takaful Limited. Resultantly, more than three-fourths of business emanated from motor contributions; whereas the company had planned to reduce its motor segment while higher growth was budgeted in fire and marine segments. Given the persistent losses from underwriting operations, the Participants Takaful Fund continued to remain in deficit at end-FY14. However, performance of the same showcased an improvement in FY15.

Investment portfolio comprises more than half of its exposure in Sukuks while the remaining is deployed in mutual funds and term deposit receipts. Market and credit risk emanating from the portfolio is considered manageable. Ability to generate a steady stream of income and support to the bottom line from investments will continue to be tracked by JCR-VIS.

In the on-going year, PQGTL has experienced a change at the helm with Mr. Javed Muslim assuming the office of Chief Executive Officer. Prior to this assignment, Mr. Javed served as General Manager/Country Sales Leader at AON Risk Solutions.

For further information on this rating announcement, please contact the undersigned (Ext: 516) or Mr. Javed Callea (Ext: 501) at 35311861-70 or fax to 35311872-3.

Jamal Abbas Zaidi

Applicable Rating Criterion: General Takaful Rating (January 2009)

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited 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.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.VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings.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 2016 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited