Press Release

JCR-VIS Reaffirms IFS Rating of Pak Qatar Family Takaful Limited

Karachi, December 30, 2011: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the IFS rating of Pak Qatar Family Takaful Limited (PQFTL) at ‘A-’ (Single A Minus). Outlook on the rating remains ‘Positive’.

Given the low penetration of life insurance/ family takaful in the domestic market, business volumes of private life insurance companies have witnessed considerable growth in 2010. PQFTL has been able to generate sizeable business of Rs. 1b in its fourth year of operations and captured share of 6% in gross premium of the private insurance sector. In addition to branch network of the institution, Islamic banks and Islamic windows of conventional banks have also facilitated in generation of business.

Individual policies remain the largest constituent of business mix. While net claims ratio for individuals has remained low; net claims ratio for group policies was on the higher side in 2010. There has been improvement in net claims ratio of group policies in 1H11 on account of selective underwriting in health business. Expense ratio has also depicted a decreasing trend in the on-going year, with continued growth in business volumes.

Exposure of investment portfolio to downside risk is low. However, performance of investment funds has depicted a declining trend, particularly in the case of aggressive and balanced funds. Decrease in return is attributable to lower return posted by equities on a year on year basis. Return of conservative fund has remained consistent and outperformed aggressive and balanced fund under management in 2010 as well as in 1H11.

Paid-up capital of the company was enhanced to Rs. 709m by end-1H11 on account of capital injection of Rs. 175m. However, net equity is much lower primarily on account of accumulated losses. Family takaful companies have a long gestation period during which losses are expected to occur.

For further information on this rating announcement, please contact Syed Ziauddin Ahmed (Ext: 508) or Ms. Sabeen Saleem, CFA (Ext: 510) at 35311861-70 (10 lines) or fax to 35311873.

Faheem Ahmad
President & CEO

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 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 2011 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .