Pacra Rating
Pacra Rating
AA+ PACRA Rating
Alfalah Insurance Company Limited (“Alfalah Insurance” or “the Company”) is assigned ratings that reflect its affiliation with the Abu Dhabi Group and Bank Alfalah Limited (BAFL). As a non-life insurance provider, Alfalah Insurance offers both conventional and takaful products, with conventional business comprising ~85% of its operations. The rating derives comfort from the Company’s sound financial profile, underpinned by adequate business volumes and a strong, consistent income stream from its investment portfolio, which continues to support profitability. However, the Company has seen a shift in its market share. In CY24, the Company recorded a topline growth of ~8%, driven primarily by improved performance in the health segment, followed by the fire and property segment. The underwriting income remained under pressure, due to elevated claims trickling in from the health segment and increased management expenses. Despite this, the Company posted a net gain of ~27%, attributable to strong investment income of ~PKR 1,001mln (CY23: ~PKR 571mln), which offset the pressure of underwriting performance. Looking ahead, the Company aims to expand its overall portfolio to enhance underwriting profitability. Moreover, efforts to enhance digital inclusion are expected to improve overall performance. Alfalah Insurance's strategic relationship with BAFL— one of Pakistan’s largest private banks — continues to benefit business acquisition efforts, while steady growth on the non-captive side has improved revenue diversification. The Company’s window takaful operations also contribute positively to topline stability. Investment income remains a key contributor to bottom-line strength, complemented by enhanced liquidity and healthy cash flow generation. The investment book is prudently management. Risk management is further supported by the presence of internationally rated reinsurers. On the equity front, the Company has a stable footing to support its operations. The rating also factors in the Company’s strong corporate governance practices and an experienced management team, many of whom have been with Alfalah Insurance since its inception. The assigned rating reflects the Company's ability to enhance its market position within a competitive landscape while sustaining strong underwriting performance. Strengthening its liquidity profile and exercising prudent management of claims and receivables remain critical to rating.
