Habib Insurance : Transmission of Annual Report for the Year Ended December 31, 2022

Habib Insurance Company Limited

Company Information

Board of Directors

Habib Insurance Company Limited

Review Report by the Chairman

on the Overall Performance of the Board

Alhamdolillah, I am pleased to present a report on the overall performance of the Board and effectiveness of the role played by the Board in achieving the Company's objectives.

As required under the Code of Corporate Governance, an annual evaluation of the Board of the Company is carried out. The purpose of this evaluation is to ensure the Board's overall performance and effectiveness is measured and benchmarked against expectations in the context of objectives set for the Company.

Accordingly, performance evaluation of the Board was conducted in 2022 as per mechanism approved by the Board. It was concluded that the overall performance of the Board, including effectiveness of the role played by the Board in achieving the Company's objectives, was found to be generally satisfactory.

Overall objective of performance evaluation of the Board is to ensure sustainable growth and development of the Company, with focus on the following areas:

1. Creating an Effective Board
2. Running an Effective Board
3. Understanding the Business including Risk
4. Performance Evaluation
5. Ethical & Values Driven
6. Strategic Objectives
7. Ideas for Improvement

Lastly, I wish to acknowledge the commitment and diligence of my fellow Directors, the executive team and all the employees of the Company for their hard work and contribution towards the growth of the Company.

Habib Insurance Company Limited

Eightieth Report of the Directors to the Shareholders

for the year ended December 31, 2022

The Shareholders,

The Board of Directors have pleasure in presenting the Eightieth Annual Report, alongwith the audited accounts of the Company for the year ended December 31, 2022.

The Directors are pleased to recommend payout of 12.5% to shareholders as mentioned above.

By the Grace of Allah, the written gross premium grew by 32% to Rs. 3 billion. The net premium revenue was Rs. 1.2 billion compared to Rs. 806.2 million last year despite a substantial increase in the amount placed in reserves, the benefit of which will accrue in subsequent period. There was an underwriting loss of Rs. 20.6 million, largely due to certain provisions taken in the accounts resulting from the exercise of coinsurance reconciliations. These provisions will be reversed in the subsequent year after the settlements with coinsurance companies are made.

The investment income for the year was Rs. 124.6 million as against 141.03 million, largely due to capital losses realized and impairment on equity securities recorded during the year. The dividend income rose to Rs. 150.2 million. As a result, the profit after tax of the Company for 2022 was Rs. 111.1 million.

The Pakistan Rating Agency has assigned A++ Insurer Financial Strength (IFS) rating to the Company. This denotes a strong capacity to meet policy holders and contract obligations.

The GDP of Pakistan during the fiscal year 2022 registered a growth of 5.97%. Present macroeconomic challenges have led to inflationary pressure on the economy. In order to address the external account situation and to reduce the inflationary wave, the State Bank of Pakistan during the course of the year raised the policy rate by 6.25% to 16%, which has now been increased to 21%. Going forward, with further foreign repayment obligations of USD 75bn during FY24-26, the external account would likely remain in a tight spot where the resumption of the IMF program would be of utmost critical importance.

The KSE 100 Index closed at 40420 as at December 31, 2022, a decrease of 9.4% over the preceding year and is presently around 41463 level as on April 27, 2023.

Looking ahead for the year 2023, the Company will continue its effort to strive for progress to Inshallah attain better underwriting results through focusing on expansion of business, without compromising on its cautious underwriting, alongwith sustained investment income.

As always, we are indeed thankful to all our clients and customers who have placed confidence in our Company. A special mention is made for all the support and guidance we have received from our Reinsurers. The Board of Directors would like to express their appreciation to all staff members of the Company for their dedication and hard work throughout the year.

We pray to Allah for Peace and Prosperity for our Nation, Ameen!