Press Release

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

Karachi, December 7, 2012: JCR-VIS Credit Rating Company Limited (JCR-VIS) has upgraded the IFS rating of Pak Qatar Family Takaful Limited (PQFTL) from ‘A-’ (Single A Minus) to ‘A’ (Single A). Outlook on the rating is ‘Stable’.

The upgrade 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 view of 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. While productivity indicators of dedicated agency sales force have improved on a timeline basis, there is room for further improvement in the same. Moreover, maintaining high persistency levels and surrender rate within manageable limits will be important for sustainable growth.

PQFTL’s underwriting performance has improved over time. With growth in volumes, expense ratio has more than halved over the course of the last three years. This along with consistent claims performance in the individual and group family segment has resulted in surplus in the Participants’ Takaful Fund. However, the group health business continues to be in deficit on account of high claims ratio; management is undertaking steps to improve profitability of the segment. Performance of all funds under management has remained competitive. Asset allocation of funds may need to be aligned with the nature of the funds.

While accumulated losses increased on account of Qard-e-Hasna contribution to fund deficit in the group health segment, net equity was higher on account of capital injection of Rs. 100m during 2011. Demonstrated support of sponsors, comprising some of the largest Qatar based financial institutions, provides strength to the assessment of overall risk profile of the institution.

For further information on this rating announcement, please contact the undersigned (Ext: 508) or Ms. Sobia Maqbool, CFA (Ext: 604) at 35311861-70 (10 lines) or fax to 35311873.



Jamal Abbas Zaidi
Deputy 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 2012 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .