Low risk retention policies of Alfalah Insurance, continue yielding profitability: PACRA

August 30, 2019: Pakistan Credit Rating Agency (PACRA), has maintained Insurer Financial Strength (IFS) rating of Alfalah Insurance Company Limited at ‘AA1-‘, with a ‘Stable’ outlook forecast.

As per the rating agency, the rating recognizes Alfalah Insurance's maintained financial profile, emanating from i) well managed insurance assets/liabilities structure, and ii) investment book that contributes a sizeable income stream & provide cushion to the bottom line.

Rating also draws comfort from sponsorship of the company. Growth in business volumes of the company has been observed. Impetus is being added with the launch of personal accidental products to various telecom subscribers, which has yielded noteworthy results.

This auger well for the business expansion and branding of the company. The management’s conservative stance, in the form of low risk retention, continues yielding profitability.

Positive momentum in volumes is expected to continue on the back of new products. Health and accident segment intend to fortify its position in the general insurance industry via expanding its outreach.

The company is expanding penetration in motor segment; building synergies with group bank – Bank Alfalah. Supporting its prudent risk retention policies, Alfalah Insurance has a sound panel of re-insurers with favourable treaty terms.
The rating is dependent on the company's ability to augment its market position in the competitive landscape, while upholding the underwriting performance. Strengthening of liquid profile is vital along with prudent management of claims and receivables.