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The Pakistan Credit Rating Agency Limited

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

Faraan Taimoor
faraan.taimoor@pacra.com

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

  • General Insurance and Takaful Operator (Jun 16) [View]
  • Correlation between long-term and short-term rating scale (Jun 17) [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 Atlas Insurance Limited
 Rating Type Insurer Financial Strength(IFS)
Current
(02-Oct-2017-)
Previous
(10-Mar-2017)
 Action Maintain Upgrade
 IFS Rating AA AA
 Outlook Stable Stable
 Rating Watch - -

Atlas Insurance is a mid-sized insurance company with a constantly growing underwriting performance as a result of quality insurance business and a stable business mix. The rating reflects financial soundness of the company alongside providing benefits in terms of sustained low-risk captive business, while ensuring sound governance framework. The growth in auto sector in which the group has more exposure goes to the advantage of Atlas Insurance, noticeable growth in non-captive business bodes well for improved footprints in the market. The bottom-line is supplemented by high investment income, ensuring increased profits after tax for the company. AIL, with launch of window takaful operations, now aims to spur growth through Shariah compliant products as well though current volume is low. The rating takes into account robust liquidity profile, providing strong coverage to the company's obligations. The company has a strong panel of reinsurers with favorable treaty terms and prudent risk retention policies. .

The rating is dependent on sustained improvement in business and financial metrics of the company in line with its relative positioning with in the industry. At the same time, liquidity profile should continue to cushion the liabilities. Improvement in claims management system should translate into reduced claims turnaround time.
About the Entity
Atlas Insurance Limited - listed on Pakistan Stock Exchange - started operations in 1935. The company provides all major types of conventional and non-conventional general insurance services and has a network of 21 branches across the country. Atlas Group - having 78% stake in AIL - is a leading conglomerate of the country with interests in Auto, Engineering, Power, Financial sectors and Trading. The group has established an Executive Committee that liaises with the management team of individual companies to offer insight into strategic direction. The group also has a Group Advisory Board, headed by Mr. Yusuf H. Shirazi, the founder of the group.

The Board of Directors of AIL comprises seven members, including one independent director. The CEO, Mr. Arshad P. Rana, has profound experience both in domestic and international market. He is assisted by a team of 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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