Lahore, June 29, 2020 (PPI-OT): The company denotes strong capacity of the company to meet policyholder and contractual obligations while reflecting it’s ability to continue capturing takaful volumes. The company has grown over the years, achieved net profitability position and aims to enhance it further through increasing network. A sound IT infrastructure provides support to the operational efficacy of DFTL. The company has adequate risk absorption capacity.
The company reaps benefit from its brand image, impetus in building retail penetration. The management aims to establish strong footprints in the Punjab and Karachi region in order to garner increased business. The rating captures the resilience of the company over the years; the company has gradually expanded its wings. With the advent of COVID-19, DFTL aims to sustain its growth and market position.
Prior to COVID-19, the life insurance industry witnessed miniscule growth of 1% YoY as single premium declined due to multiple factors. The current pandemic has further affected the life insurance industry, with the growth expected to plummet. Additional reduction in investment linked policies and heightened claims are expected. Moreover, increase in surrenders is likely as a result of economic stagnation. The large investment book is however likely to cushion any impact. The industry intends to sustain its existing position while aiming to launch innovative products.
The rating is dependent upon continued improvement in the company’s system share, surplus in takaful fund, and sustained liquidity position. At the same time, upholding strong governance practices are critical. The sponsors’ financial profile was relatively stretched, which is now improving.
For more information, contact:
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