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Islamabad: In a noteworthy development, the Pakistan Credit Rating Agency (PACRA) has decided to maintain the Insurer Financial Strength (IFS) rating of The United Insurance Company of Pakistan Limited at an impressive AA+. This decision comes on the heels of a stay order issued by the Islamabad High Court and the subsequent withdrawal of an earlier press release by the Securities and Exchange Commission of Pakistan (SECP) dated 21-May-25.
The United Insurance Company, a key entity within the United International Group, boasts a robust presence in the insurance sector, managing both conventional and window Takaful operations. The company has shown remarkable growth, with its Gross Premium Written (GPW) rising by 29% in the previous calendar year, supported by both conventional insurance and Takaful ventures.
The insurer’s revenue model heavily relies on the miscellaneous segment, including hospitalization and travel insurance, while crop insurance forms a significant part of its portfolio. Despite a subdued GPW in the first half of the current year, the company saw a 14% increase in Net Premium Written (NPW) due to effective reinsurance management.
PACRA’s decision to uphold the AA+ rating underscores United Insurance’s strong capacity to meet policyholders’ obligations. The rating reflects low risk factors, with minimal impact anticipated from potential adverse business or economic conditions. However, the company faces the challenge of enhancing its liquidity profile, especially as it aims to diversify into real estate and life insurance sectors.
The future stability of United Insurance’s ratings is contingent on achieving strategic business expansion and maintaining a stable liquidity profile. The company is expected to leverage its established platform to meet these objectives while strengthening its equity base.
As United Insurance navigates these challenges, the successful execution of its diversification strategy will be pivotal in sustaining its current rating and ensuring continued financial stability.