Pakistan Credit Rating Agency Limited maintains Insurer Financial Strength rating of Sindh Insurance Limited

Lahore, May 04, 2016 (PPI-OT):The Pakistan Credit Rating Agency (PACRA) has maintained the Insurer Financial Strength (IFS) Rating of Sindh Insurance Limited (SIL) at “A” (Single A). The rating denotes strong capacity to meet policyholders and contract obligations.

The rating reflects SIL’s strong parentage of the Government of Sindh (GoS) and its potential to leverage on the same. In addition to a sizeable liquidity in the form of seed capital in SIL, the GoS has provided a platform to establish SIL in a competitive insurance industry; the legislation passed by the provincial assembly of Sindh by end-Mar15, ensures a sustainable captive business to the company, of which the inflow has gradually started.

Government of Sindh, to promote economic development in the province, has identified the need for its key role in the financial industry – bank, insurance, leasing, modaraba, and microfinance. It has already garnered success in commercial banking through Sindh Bank beginning its operations in 2010. GoS strategy includes supporting these entities by channelizing government-linked business volumes to its companies.

Going forward, the company envisages launching products linked to government business, as well as using the network of an associate bank to launch a smart branch in Lahore. The management team is in place and control environment is well designed – though efficacy of both would be tested over time. Rating also takes comfort from robust risk absorption capacity, reflected by sound liquidity profile.

The rating is dependent on management’s ability to capitalize on its brand and group’s well-built platform for business expansion. At the same time, the liquidity level should be upheld; herein attrition beyond a requisite threshold would negatively impact. Upholding good governance standards remain critical.

For more information, contact:
Hammad Rashid
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com