Adamjee Life Assurance Company Limited ($ALIFE)

[Foreign Language] And you will be able to hear us clearly. If anyone has any issue in connectivity he or she can raise his or her hand accordingly. First of all we would like to welcome all our dear shareholders, investors and analysts in the corporate briefing session for the year ended 31st December 2025 under the 5.7A of PSX Rulebook. Pakistan Stock Exchange Rulebook 5.7A [Foreign Language] as required every listed company to hold a corporate briefing session, we are conducting our corporate briefing session for the year ended 31st December 2025. As each company is required to hold a corporate briefing session within 30 days of the conclusion of the Annual General Meeting, so this is also in line or in compliance with the Pakistan Stock Exchange regulations. This has been quoted at the start of the meeting as the recording of the -- this corporate briefing session will be accordingly uploaded on the website of the company -- official website of the company. And subsequently, the link to that official video uploaded on the website of the company will be provided to the general public for their dissemination through the PUCARS designated portal of Pakistan Stock Exchange. First of all, before proceeding with the presentation on the financial year for the ended 31st December 2025, we would like to state that as required under the Pakistan Stock Exchange rule book, the presence -- requisite presence of CEO and CFO, as both are compulsory in every corporate briefing session other than the corporate briefing session, which are required to be held for the year -- during the year, our CEO Manzar Mushtaq and our CFO, Chief Financial Officer, Mr. Jalal Meghani [indiscernible] corporate briefing session as required under 5.7A.2. and 5.7A.3. So, further proceeding through this corporate briefing session, I would request our CFO, Chief Financial Officer, Jalal Meghani, [Foreign Language], for the presentation on the financial year concluded 31st December 2025. [Foreign Language]

Can you hear me now?

[Foreign Language]

Thank you for all the participants, and thank you, Arsalan, for this corporate briefing -- arranging this corporate briefing session. I understand we have participants from the training room at our corporate office, Karachi, and I can see a couple of participants here. I also understand there are some overseas participant. So welcome to this session. And we'll start with the presentation, which circulated on the PUCARS' website,PUCARS' portal rather. [Foreign Language]Okay, can you see the screen? Arsalan?

[Foreign Language]

Okay. So let's start. I'll draw attention of the participants to our annual report, which was issued in March and towards the directors' review, where some of the numbers are comprehensively explained. And I'll, on and off, refer to the directors' review report for that purpose. But before starting, there is no major change in our strategic objectives, and it's still -- our long-term objectives are more or less similar to what have been presented last year. And that is increasing our market share in the direct distribution model, which was started in late 2018. And though our banca distribution is very much mature, and we are the top premium generator in the bancassurance distribution channel. So to attend the profitability and increase market share is our prime long-term objective, and there has been a consistent progress towards this objective. And we'll see further progress in the years to come, leading to the profitability against this distribution model. Likewise, on the digital space is also -- presence on the digital space is also very important, as we all know. And in that respect, even SECP has directed insurance companies to at least put four of the products. And those four products are the agreed products. The structure of the products are agreed, which are the saving products, both in the single premium and regular premium, which will now be available on the digital space on our recently launched app of the company and with the aggregators on the website, so on and so forth. And we will continue to add further products on the digital space as the time goes. Along with that, we are seeking partnerships with other service providers to embed our insurance product. The bringing innovation and a long-term value for the customer is also one of our strategic objective. And in that respect, we have recently launched endowment product, the guaranteed sum assured product a month back. We know that primarily all the insurance companies are selling a unit-linked investment-linked product. And from the last year, the industry players have started introducing endowment product, the non-unit-linked product segment into their product basket. And we have already done that last year. The general objective to increase product awareness because the penetration in our country is still less than 1% of the GDP in the life insurance. So creating product awareness and the value proposition for the life insurance is one of the most important thing, which each and every player in the industry should do. The quality of excellence in the quality of sales is also important to enhance trust level in the life insurance company. We saw in the past that there was a kind of trust deficit in all the insurance product, but achieving the excellence in quality of service, which now all the industry players are doing in different ways. And the new line of business, especially exploring the retail health, still it's in a very initial stage of study, but we'll see how we can enter into the retail health insurance as well. On the overall distribution landscape in 2025, in bancassurance, bancassurance is still our major driver of the revenue with 82% of the new business being generated from the banca partners. We have employed around 877 sales representative in the different branches of the bank and the market share of Adamjee Life in the total banca industry is around 22%, which has increased from 20% in the last year. And our major partners include MCB Bank, MCB Islamic, Habib Metropolitan HMB in both conventional and Islamic window. In direct distribution, minus State Life, which is the major player in the direct distribution, having around -- more than 55% of the market share. The minus State Life in the private sector, our market share is 10%, and we have around 67 sales offices and 18% of the new business is generated from the direct distribution. And we have around 2,300 direct sales force employed into these branches. Our number of -- on the Group Life side, we have seen gradual growth and increase in the market share of Adamjee Life, and the number of corporate accounts as at the end of year 2025 was 278 and the gross premium underwritten was PKR 1.4 billion and the claim ratio was 83.55% with net of RI claim ratio of 54.53%. And Adamjee Life, again, minus State Life, the private sector market share is 7%. This is the 6 years snapshot of the major balance sheet items. And you can see that we are very, very adequately capitalized, and we have around -- we have the highest paid-up capital in the industry. In '24 to '25, the increase is due to the 5% issuance of the bonus share. And our reserves has increased from PKR 1.8 billion to PKR 2.15 billion, which is parked in the statutory fund, but distributable in the future. whereas the distributable unappropriated profit in the equity side is PKR 1.5 billion, increased from PKR 1 billion in last year. Our total investments has risen from -- a growth of 20%, we can see from PKR 105.7 billion to PKR 123.4 billion in 2025. Other than that, our total assets are PKR 134.5 billion from PKR 116.4 billion. And in the year 2025, our credit rating was also improved from A+ to AA from Petra with a stable outlook. And this is the P&L side of the financial snapshot. And you can see the top line of -- from PKR 30.9 billion to PKR 36.13 billion, which is billion, which is an 18% growth in the top line from the last year. Going into the breakdown, which is not given here is the premium generated from new long-term business, the regular premium, new business is PKR 4 billion in this PKR 36.4 billion, and that PKR 4 billion represents 43% growth over last year. And the major growth has come from our major banca partner, MCB Bank, and they have generated 65% more business -- new business as compared to the last year. Overall, banca distribution has seen a growth of 58% in 2025, whereas our direct distribution is more or less -- was more or less same as the last year. So there was no decrease, no increase as we are going through some adjustment to ensure quality of business first rather than the uncalculated growth side. On the Group Life side, our business was PKR 1.4 billion, as mentioned in the last -- on this last slide, which is 43% up from the last year. Our renewal business, the policies which were underwritten in the past years and for which we have received renewal premium for the second, third and onward years has increased by 1% and a total amount in this PKR 36 billion was PKR 10.1 billion for the renewal book. The major contributor in this PKR 36.4 billion is again our single premium product, which is PKR 21 billion in 2025 and which represents 22% growth from the last year. So this is the one shot single premium high-ticket items. And normally, it carries a maturity for 2 to 3 years. So that's the breakdown for the total gross premium. You can see the investment income has declined by 21% from 26.7% to 21%. And the major reason was the stabilization of the interest rates in the economy due to decreased inflation rate and stability in the macroeconomic indicators. The policy rate has declined from around 21% going down to 12% at the end of -- during the year on average 12%. And as of December, it was around 10.5%, if I'm not wrong. So there was a drastic decrease in the interest rates. And around 80% of our portfolio is invested in government securities and interest-based investments. So what we see here is a partial decline because that decrease in interest rate was compensated by a very robust increase in the equity markets. So there are equity gains, which compensated the lesser income in the interest-based securities. So overall, minus 21% is the investment income for the company, and this includes both investment income tied up to the investment-linked products for the policyholders and for our own portion of the equity and the residual surplus in the policyholder funds. The net claims likewise increased from PKR 24.3 billion to -- sorry from PKR 24.3 billion to PKR 32.086 billion. And the major attributable was the maturities of around PKR 11.7 billion, which is 27% more than the last year. And we are in our 14th or 15th year of operations as far as individual life is concerned. So policies are maturing fast. Likewise, the new policies are also coming in. But in total claims, you can see 27% increase in the maturities, whereas 36% increase in the surrenders since in the last year, the cash value improved a lot due to the interest rates and the interest rates in 2024, 2023. And due to that increase in interest rate, the cash value in 2025 against the policyholders portfolio increased tremendously and people preferred to cash in their cash value. So you can see more surrenders coming in over here in the net claim side. The pure death claims are around PKR 1.8 billion, which is 43% higher than the last year. So this is the major line item on our expense side. Acquisition cost is very much variable, and there is no deviation as far as the percentage of acquisition cost to premium is concerned. Likewise, the technical reserves has also -- is more or less in line with the historical trend. It has decreased from 25% to 16.7% because of all these surrenders maturities going out and the decrease in the interest rate. And therefore, the technical reserves are lesser as compared to the last year. So underwriting -- from underwriting point of view, the minus the operating expense and financial charges, our underwriting results produced PKR 3.7 billion of profit as against PKR 3.9 billion last year. And as I said, the reason is the decrease in the investment income and the major portion of the -- in the top line of the single premium and single premium in the first year carries some upfront cost, which pays off in the later year. But in the first year, there is a high acquisition -- the cost is high than the gross premium. And therefore, you can see a slight decline in the underwriting results. Operating expense of PKR 1.5 billion is very much within our budgetary limits. And you can see it's a hardly increase of around 9%, considering the going inflation rate, we were satisfied with the way we have controlled our expenditure. And therefore, the profit before tax has decreased from PKR 2.5 billion to 2.1 billion. And that also includes lesser investment income on the shareholder equity investment as well. So combined underwriting results, the operating expense and certain decrease in the investment income on the shareholder equity portion, you can see around PKR 400 million decline in the profit before tax. The earnings per share, likewise, is PKR 5.01 as against PKR 6.22. And the important thing is that we maintained a very good payout ratio, the dividend payout ratio. And historically, we paid 20%, 10% interim and 10% final. But this year, our Board of Directors decided to pay a final dividend of 15%, making 25% in total for the year 2025 in addition to the 5% bonus share issued in the interim. The share price analysis for a few years, and we can see here that our free float has increased from 9% to 15%. So in the year 2025, our parent company has reduced their shareholding according to the PSX requirement from 9% -- from 90% to around 85% holding. And therefore, 15% is available in the free float. Some analysis on the share price, you can see and market price to breakup value is 1.53 in market capitalization of around PKR 8.2 billion. And here, you can see our asset under management, which has shown a very good growth rate from -- if you see from 2020 from PKR 49 billion to now PKR 131 billion in 2025. In addition to that, -- if you see on the annual report, there is a major issue facing the entire industry is the provincial sales tax. And that provincial sales tax is still in the -- is prejudice. And on the province of Sindh, it's been recently sent back by the Supreme Court to Sindh High Court to review the question of law, whether the life insurance is a service or not or whether the provincial jurisdiction is appropriate to levy that tax. And the Lahore High Court from the Punjab side, which is our major market, we have a stay for any coercive action from the Lahore High Court for the Punjab Revenue Authority unless the question of law is decided by the Lahore High Court. So that is the industry-wide contingency. And our exposure into that sales tax is around PKR 1.6 billion, which though is a retrospective exposure, but we are very hopeful that any decision which would come in the future would apply sales tax in any manner if the question of law is decided, then it would be progressive rather than retrospective. So -- but for the sake of disclosure, all the industry players have disclosed their exposure on the retrospective basis. So that's all from my side. If there are any questions from the participants, we'll be pleased to answer that.

Thank you, Jalal. Thank you. Thank you so much for the briefing. Now we would like to proceed under 5.7A.3 clause d, which requires every company to hold a session for the question-and-answer of the participants, either physically or participating physically [indiscernible] we have a question in the chat, Jalal [Foreign Language]?

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Yes.

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Okay. Can you speak on the quarter 1 '26 results, specifically lower premium revenue, higher claims, positive reversal of expenses, change in insurance liability, assumptions of long-term interest rate using quarter one relative to -- using quarter 1 26'. [Foreign Language]

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[Foreign Language]. Its neer been a very good benchmark yardstick. [Foreign Language]. Mostly, it's a planning quarter. [Foreign Language]. Mostly high-ticket or investment-savvy buy that. [Foreign Language]. what should be my illustrative maturity values? [Foreign Language] positive reversal of expenses. [Foreign Language] There was a loss on investment income in the first quarter due to equity losses and mark to market [Foreign Language]. And you well know [Foreign Language]. Assumptions of long-term interest rate used [Foreign Language].

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If we have any other questions from any other participant floor is open for the questions. [Foreign Language] Jalal, we currently don't have any other question, so we will conclude this corporate briefing session with a vote of thanks to all the participants, whether they are in the capacity of shareholders, analysts or investors. So further, we will also brief -- like to brief our participants that the recording of this corporate briefing session as required under 5.7A.3E of PSX Rulebook will be uploaded on the official website of the company for the general public information and the general public consideration and also will be announced for PUCARS within two working days of holding of the CBS. So we would like to conclude this CBS session with a vote of thanks to all the participants here. Thank you so much sir.

Thank you. Thank you, sir. Very interesting. Thank you.

Thank you