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The Pakistan Credit Rating Agency Limited

Date
02-Oct-2017
Analysts
Jhangeer Hanif
jhangeer@pacra.com

Rohail Amjad
rohail.amjad@pacra.com

+92-42-35869504
www.pacra.com
Applicable Criteria

  • General Insurance and Takaful Operator (Jun 16) [View]
  • Methodology | Insurer Financial Strength (IFS) Rating | General (Jun 17) [View]

Related Research

  • Sector Study | General Insurance (Nov 16) [View]
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PACRA Maintains IFS Rating of Sindh Insurance Limited
 Rating Type Insurer Financial Strength(IFS)
Current
(02-Oct-2017-)
Previous
(13-Mar-2017)
 Action Maintain Maintain
 IFS Rating A+ A+
 Outlook Stable Stable
 Rating Watch - -

The rating reflects SIL's strong parentage of the Government of Sindh (GoS) and its strong positioning to leverage on the same. In addition to a sizeable capital in cash, the GoS has provided a platform to establish SIL in a competitive insurance industry. The introduction of the “Universal Social Security” scheme, initiated by GoS, has bought a sizeable increase to the business of SIL, thereby heavily increasing its topline. Herein, incidence of claim and pattern is yet to be established. However, GOS’s coverage to claims exceeding scheme’s premium base provides net protection to the company. Stable stream of investment income from sizable and deployed investment book significantly supports the bottom line. The direct benefit from the scheme has heaved in the form of liquidity – premium received in advance. Legislation passed by provincial assembly of Sindh effective March- 15, provides exclusive rights to Sindh Insurance to underwrite public property of Government of Sindh. Though property under insurance net has been acquired, untapped business is yet to be pitched.

The rating is dependent on management's ability to capitalize on its brand and group's well-built platform for business expansion. At the same time, the liquidity level should be upheld; herein attrition beyond a requisite threshold is considered negative.
About the Entity
Sindh Insurance Limited (SIL), incorporated as an unlisted public company in Dec13, is a wholly owned entity of Government of Sindh (GoS). GoS has presence in most dimensions of financial market through Sindh Bank Limited, Sindh Leasing Company Limited, Sindh Modaraba, Sindh Insurance Limited and Sindh Microfinance Bank. SIL has a seven member board, chaired by Mr. Muhammad Bilal Sheikh, Director of Sindh Bank, CEO of Sindh Leasing Company Limited, Chairman of Sindh Insurance Limited and Sindh Modarba Management Limited . Mr. Sheikh is a seasoned banker with over 45 years of diversified experience in banking. The CEO of the company, Mr. Muhammad Faisal Siddiqui, brings with him diversified experience of more than a decade in life and general Insurance. He is supported by core management team comprising qualified and experienced professionals.
The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.
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