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Lahore, June 12, 2023 (PPI-OT): The rating reflects Company’s unwavering commitment to financial stability and good performance. Trafco Insurance has implemented proactive measures to enhance its solvency requirements, leading to the fulfillment of the Minimum Capital Requirement in 2022. The Company’s underwriting portfolio is currently in development stage, which will be growing as envisaged by the management. The Company deals in “Fire and Property Damage”, “Marine, Aviation and Transport”, “Motor” and “Miscellaneous” segments. The Company’s ultimate forte resides with the motor segment ~65.37% followed by fire and property (~18.67%) and miscellaneous (~15.94%). The underwriting losses can partially be accredited to a negligible net insurance premium.
Currently, the management of the Company is actively engaged in developing its investment portfolio, which shows promising potential. The quantum of liquid profile stood at PKR 2mln as at end-Dec22. An upgrade in rating is further supported by Trafco Insurance’s efforts in improving solvency and compliance with laws while progressing towards a sustainable organization. Additionally, Trafco Insurance has taken significant strides by enlisting reinsurance treaties, which provides room to grow and a layer of cushion for risks arising out of underwriting.
The Company’s success in achieving GPW targets and the expectation of the induction of the new sponsor who aligns with Company’s core values, vision and commit to excellence remains crucial to the assigned rating. This should translate in improved underwriting performance and augmented liquidity. The rating would gain benefit provided the Company meets all statutory requirements and captures a sizeable share in the market while achieving breakeven in its core operations. At the same time, the liquid earning investments profile of the Company must rise.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com
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