Lahore, March 31, 2016 (PPI-OT):The Pakistan Credit Rating Agency (PACRA) has maintained the lnsurer Financial Strength (IFS) rating of State Life Insurance Corporation of Pakistan (SLIC) at “AAA” (Triple A). The rating denotes exceptionally strong capacity to meet policyholders and contract obligations.
The rating reflects SLIC’s utmost risk absorption capacity on the back of Government of Pakistan’s (GoP) guarantee for policyholders’ liabilities. The sum insured including bonuses (if any) declared by SLIC are guaranteed as to payment in cash by GoP under article 35 of the Life Insurance (Nationalization) Order, 1972. The rating takes into account SLIC’s sound market position in life insurance industry emanating from extensive and well-penetrated distribution network, experienced management team and robust financial profile. This makes SLIC the single largest player, capturing more than half of industry’s premium. The Corporation is pursuing a growth strategy wherein, while focusing on existing business lines, it intends to expand its product offerings – Bancassurance, Window Takaful and Microinsurance.
SLIC has taken up Government initiated health programmes, reaching public at grass-root level. This, while bringing volumes, would facilitate sustaining market position in the wake of increasing competition from the private sector. SLIC’s policyholder’s obligations are supported by a sound and low risk investment portfolio; hence any drag on its capital base is unlikely.
SLIC’s ability to maintain its leadership in the life insurance sector is important. In this regard, successful execution of the envisaged business strategy including diversification and growth is essential. Meanwhile, updating IT infrastructure and user-friendly online portal for policyholders would be a key challenge; the management plans complete implementation by end-Dec16. Claims outstanding days are higher due to longer processing of claims in initial years of policy issuance.
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