PACRA Maintains IFS Rating of IGI Life Insurance Company

Lahore, June 29, 2020 (PPI-OT): Packages Group, with the brand of IGI, has been operating in the industry since 1953. IGI has been a step towards holistic presence in insurance industry – General as well as life. This is unlocking synergistic benefits. The market share of the company has been stagnant, owing to change in the business strategy: to reduce dependence on the single premium and shift towards the regular premium.

The high expenses related to the launch of ‘Vitality’ and updated IT infrastructure has led to a falling bottom-line. The company has beefed up its equity through the issue of right shares reflected in Dec-2019 financials. Going forward, IGI Life aims to improve penetration in the market, on the back of expansion in branch network and gradually building up portfolio through a range of products. The company’s association with Packages Group engenders sound governance framework remains a key rating factor.

Prior to COVID-19, the life insurance industry witnessed minuscule 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 on sustained improvement in business and financial risk profile of the company in line with its relative positioning within the industry. At the same time, the improved equity and liquidity profile should be sustained to cushion the policyholder’s liabilities. The performance of ‘Vitality’ remains essential.

For more information, contact:
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

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