Press Release
VIS Upgrades IFS Rating of Pak Qatar General Takaful Limited
Karachi, July 17, 2025: VIS Credit Rating Company Ltd. (VIS) has upgraded the Insurer Financial Strength rating (IFS) of Pak Qatar General Takaful Limited (‘PQGTL’ or ‘the Company’) to ‘A+ (IFS)’ (Single A Plus (IFS)) from ‘A (IFS)’ (Single A (IFS)). The rating signifies a strong capacity to meet policyholders and contractual obligations. Risk factors are low, and the impact of any adverse business and economic factors is expected to be small. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on March 13, 2024.
PQGTL has demonstrated an improving financial position, supported by its strong Sharia-compliant business model and sound underwriting practices. While the Company may arrest decreasing trend in market share within both the overall insurance industry and the takaful segment, PQGTL has demonstrated resilience through improved claims management and a disciplined underwriting approach.
The Company's underwriting performance has shown improvement, driven by a reduction in net claims. The combined ratio improved on a timeline basis. PQGTL's investment portfolio remains conservative, with a focus on low-risk Islamic mutual funds and government securities, ensuring liquidity and steady returns. The growth in investment income has further bolstered profitability, contributing to a healthy equity base and reduced financial leverage.
PQGTL's reinsurance strategy is well-structured, utilizing a mix of proportional and non-proportional treaties to manage risk exposure effectively. While the absence of reinsurance coverage for the health segment poses a challenge, the overall reinsurance panel is diversified and comprises reputable international reinsurers with adequate credit profiles. The Company's liquidity position is satisfactory, with manageable insurance debt levels and adequate liquid assets relative to technical reserves.
Sharia governance is a cornerstone of PQGTL's operations, with a dedicated Sharia Advisory Board ensuring compliance across all business activities. The Shariah Board's oversight extends to product certification, investment screening, and surplus distribution, reinforcing the Company's commitment to Islamic principles. This governance framework enhances stakeholder confidence and aligns with regulatory expectations.
Looking ahead, PQGTL faces opportunities for growth in Pakistan's underpenetrated insurance market, particularly in the takaful segment. The Company's focus on small to mid-sized clients and cautious underwriting practices positions it well to navigate macroeconomic challenges, including inflationary pressures and regulatory changes. While competition remains intense, PQGTL's strong shareholder support, experienced leadership, and adherence to Sharia principles provide a firm foundation for sustained performance.
For further information on this rating announcement, please contact at 021-35311861-64 or email at info@vis.com.pk
Applicable Rating Criteria:
Takaful Companies
https://docs.vis.com.pk/docs/TakafulCompanies-Oct-2023.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf