Press Release

VIS Reaffirms IFS Rating of Pak Qatar Family Takaful Limited

Karachi, April 16, 2021: VIS Credit Rating Company Limited has reaffirmed the Insurer Financial Strength Rating of Pak Qatar Family Takaful Limited (PQFTL) at ‘A+’ (Single A Plus). The rating signifies high capacity to meet policyholder and contractual obligations. Risk factors may vary over time due to business/economic conditions. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on October 15, 2019.

The IFS rating assigned to PQFTL is underpinned by the sponsor profile, comprising prominent Qatar-based financial institutions. Sponsor support has been demonstrated by the financial assistance provided to PQFTL over the years, including equity injection of Rs. 275m in 2018. The rating also incorporates the company’s market outreach, which has been enhanced during 2020, with notable addition to the branch network and new arrangements in place for online sales.

Functioning as one of the two existing Family Takaful operators in the country, PQFTL is a medium-sized takaful operator, with a market share of 7.6% in the private life insurance segment as of 2019. Given the significant addition in branch network, management projects growth in gross underwriting to accelerate going forward, through which the management expects to grow the company’s market share.

During the period under review, an uptick had been noted in the net claims ratio under individual life and group life business segment, owing to the increase in death rate caused by the pandemic. Persistency, subsequent to posting improvement in 2019 dropped in both second year and subsequent year categories. Despite the adverse movement in claims ratio under stated business segments, the company’s profitability posted significant improvement in both policyholder’s and shareholder’s fund, where the policyholder’s fund generated an overall surplus against a deficit last year. Overall risk absorption capacity of the company is considered sound, in view of healthy capital coverage of claims. Liquidity profile is sound with liquid assets, largely comprising equities and fixed income instruments, providing adequate coverage against the company’s liabilities.

For further information on this rating announcement, please contact Mr. Atiq Anwar Mahmudi (Ext: 207) or Mr. Arsal Ayub, CFA (Ext: 216) at 35311861-71 (10 lines) or fax to 35311873.

Faryal Ahmed Faheem
Deputy CEO

Applicable Rating Criteria: Life Insurance & Family Takaful (February 2018)

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VIS Credit Rating Company Limited