General efu insurance report

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A Report On: IInnssuurraannccee CCoommppaannyy
Prepared For: SSiirr MMuummttaazz HHaassssaann
Prepared By: MMuuhhaammmmaadd WWaasseeeemm
Roll No: 11220044113366
DATED: 99tthh
NNoovv,, 22001155

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ACKNOWLEDGEMENT
At first instant, humbly we bow our head with all the feeling of our heart and soul before the
Almighty Allah, the beneficent, the omniscient who bestowed us with all the mental abilities to
work out thisproject.
The report being submitted today is a result of collective effort. There are innumerous helping
hands behind who have guided us on our way. Writing this report appeared to be a great
experience to us. It added a lot to our knowledge. This report is one of our memorable
experiences in student life. Though words are inadequate in offering thanks to our teacher but
we owe our profound gratitude to “Sir Mumtaz” for stimulating our creative abilities by
assigning thisproject tous andfor his ableguidance andusefulsuggestions, which helped us in
completing the project in time. Whatever we have learnt from him and this report has put
indelible impression on our minds and it is our conviction that this learning experience will
alwaysbe a source of help in our practicallifeand professional career.
Finally, yet importantly, we would like to express our heartfelt thanks to our beloved parents,
for cooperation, help, kindness and blessings, our family and friends for their help and wishes
for thesuccessful completion of thework.

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Contents
WHAT INSURANCE IS.........................................................................................................................5
CLASSES OF INSURANCE ...................................................................................................................5
GENERAL INSURANCE.............................................................................................................6
LIFE ASSURANCE......................................................................................................................6
HISTORY OF EFU................................................................................................................................7
INTRODUCTION OF EFU GENERAL.....................................................................................................8
VISION STATEMENT...........................................................................................................................9
MISSIONSTATEMENT........................................................................................................................9
OBJECTIVES.......................................................................................................................................9
FINANCIAL STATEMENT...................................................................................................................10
ACCOUNTS DEPARTMENT...............................................................................................................11
FUNCTIONS OF ACCOUNTING DEPARTMENT...................................................................11
Making Payments...................................................................................................................11
Payroll.....................................................................................................................................11
Receiving Payments................................................................................................................11
SERVICES OF INSURANCE................................................................................................................13
MARINE INSURANCE..............................................................................................................13
AVIATION INSURANCE..........................................................................................................13
HOME INSURANCE .................................................................................................................14
SHOP INSURANCE..................................................................................................................14
FIRE INSURANCE....................................................................................................................15
TYPES OF POLICIES..........................................................................................................................15
RECOMMENDATION........................................................................................................................17
REFRENCES .....................................................................................................................................17

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WHAT INSURANCE IS
A promise of compensation for specific potential future losses in exchange for a periodic
payment. Insurance is designed to protect the financial well-being of an individual, company or
other entity in the case of unexpected loss. Some forms of insurance are required by law, while
others are optional. Agreeing to the terms of an insurance policy creates a contract between the
insured and the insurer. In exchange for payments from the insured (called premiums), the
insurer agrees to pay the policy holder a sum of money upon the occurrence of a specific event.
In most cases, the policy holder pays part of the loss (called the deductible), and the insurer pays
the rest. Examples include car insurance, health insurance, disability insurance, life insurance, and
business insurance.
The transaction involves the insured assuming a guaranteed and known relatively small loss in
the form of payment to the insurer in exchange for the insurer's promise to compensate the
insured in the case of a financial (personal) loss. The insured receives a contract, called the
insurance policy, which details the conditions and circumstances under which the insured will be
financially compensated.
CLASSES OF INSURANCE
The insurance is mainly divided in following two major classes of business.

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GENERAL INSURANCE
General insurance or non-life insurance policies, including automobile and homeowners policies,
provide payments depending on the loss from a particular financial event. General insurance
typically comprises any insurance that is not determined to be life insurance
General insurance means managing risk against financial loss arising due to fire, marine or
miscellaneous events as a result of contingencies, which may or may not occur. General
Insurance means to “Cover the risk of the financial loss from any natural calamities viz. Flood,
Fire, Earthquake, Burglary, etc.. i.e. the events which are beyond the control of the owner of the
goods for the things having insurable interest with the utmost good faith by declaring the facts
about the circumstances and the products by paying the stipulated sum , a premium and not
having a motive of making profit from the insurance contract.”
Some of the General Rules:
1. Mis-description: The insurance policy shall be void and all the premiums paid by
insured may be forfeited by the insurance company in the event of mis-presentation or
mis-declaration and/or non-disclosure of any material facts.
2. Reasonable care: The insured shall take all reasonable steps to safeguard the
property insured against any loss or damage. Insured shall exercise reasonable care that
only competent employees are employed and shall take all reasonable precautions to
prevent all accidents and shall comply with all statuary or other regulations .
LIFE ASSURANCE
Life assurance is a contract between the policy holder and the insurer, where the insurer
promises to pay a designated beneficiary a sum of money (the "benefits") upon the death of the
insured person. Depending on the contract, other events such as terminal illness or critical illness
may also trigger payment. In return, the policy holder agrees to pay a stipulated amount (the
"premium") at regular intervals or in lump sums. In some countries, death expenses such as
funerals are included in the premium; however, in the United States the predominant form
simply specifies a lump sum to be paid on the insured's demise.
The value for the policy owner is the 'peace of mind' in knowing that the death of the insured
person or if he lives too long, or if he becomes disabled, will not result in financial hardship.
Life policies are legal contracts and the terms of the contract describe the limitations of the
insured events. Specific exclusions are often written into the contract to limit the liability of the
insurer; common examples are claims relating to suicide, fraud, war, riot and civil commotion.

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HISTORY OF EFU
In the early 30s of the 20th century, under the inspiration of the Quaid-e-Azam Mohammad Ali
Jinnah, there began to appear signs of economic renaissance of the Muslims of India. Shipping,
Airline, Banking and Insurance companies made their debut.
In 1932, Mr. Ghulam Mohammad, a far sighted man, established Eastern Federal Union
Insurance Company (EFU) with financial assistance from the Aga Khan III and the Nawab of
Bhopal. Mr. Abdur Rehman Siddiqui became the founder chairman. The company was originally
registered at Kolkata and operated in India (undivided) and Burma.
In 1947, on the birth of Pakistan, EFU found a new home in a new country. In Pakistan, EFU
rapidly established itself as a progressive and innovative insurer. It gave the emerging insurance
industry the leadership, the manpower and the drive needed to grow in a situation where at one
time, three-fourths of insurance was held by foreign companies.
By 1961, EFU had become the flag bearer of Pakistan's insurance industry on the world stage,
and the largest life company in Afro-Asian countries (excluding Japan) under the leadership of
Mr. Roshen Ali Bhimjee. It remained so until 1972 when Life Assurance business in Pakistan was
nationalized. Thereafter EFU operated solely as a General Insurance Company, and was
subsequently renamed EFU General Insurance Limited. Now EFU General is the second largest
non-life insurance company in the country and the mother company of other insurance
organizations of EFU Group.
In June 1990 the Government of Pakistan decided to allow Life Assurance business in private
sector also. On 18 November 1992, EFU Life was granted a license to carry on life assurance
business. It started operations immediately with Group Life products and in March 1994
launched its Individual Life products. EFU entered the field of life assurance with the focus on
the changing needs of the population. The company is committed to provide its policyholders
with solutions to the problems of today's complex and rapidly changing financial environment
by introducing innovative, and modern products.
In March 2000, Allianz Aktiengesellschaft (Allianz AG), a global leader in the insurance industry
with an active presence in 70 markets across 5 continents and EFU Group signed a joint venture
to form a new company for providing health insurance cover to the people of Pakistan. Allianz
EFU Health Insurance Limited, approved by the Government of Pakistan, is the first specialized
health insurance provider in the country and aims to play a pivotal role in developing the health
insurance market in Pakistan.
EFU is the leading insurance group in Pakistan providing a full range of insurance services. This
includes life, health and general insurance. A pillar of EFU's strength lies in its close and long-
term (over 50 years) relationship with its main reinsurer, Munich Re of Germany, one of the
largest reinsurance companies in the world.

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INTRODUCTION OF EFU GENERAL
We are in the business of providing a full range of non-life insurance products and services
customized to meet the varied needs of a wide spectrum of businesses and industrial clients as
well as individuals, providing Property, Marine/Aviation, Motor and other Miscellaneous
products. The most important aspect of our operation is that we have created a separate Risk
Management Team and an Engineering Group who work closely with clients to identify various
risk exposures and then provide specific insurance. This helps in loss prevention and reducing
the cost of premium. Our market-driven team of inspired and technically qualified insurance
personnel, specializing in civil, mechanical, metallurgy, electronics and having overseas linkages,
is on-call for necessary professional advice at all times. It is our policy not only to provide
protection and risk reduction but help clients develop preventive capabilities to avert major
perils and calamities. Over the years we have developed a full range of insurance services for
large infrastructure projects including the areas of oil/gas exploration field.
We are fully equipped with technical, marketing and managerial skills supported by reinsurance
arrangements with a number of European firms of international repute to cater for all classes of
specialized insurance and provide customer service of the highest quality. Our clients include
both large and medium sized organizations in all sectors of the economy. We are committed to
new product development and innovation, legendary customer service and a promise that
everything we do, we do from the hear
The Company was incorporated on September 2, 1932 and is engaged in non-life insurance
business comprising of Property, Marine/Aviation, Motor and other Miscellaneous products.
The shares of the company are quoted on Karachi and Lahore Stock Exchanges of Pakistan.
The Principal place of business is located at EFU House, M.A. Jinnah Road, Karachi, Pakistan.
EFU is one of the few Pakistani organizations run totally by professional management and highly
motivated field force.
Policies accepted by all institutions in the country.
Client-base comprises of many leading business houses and multinational companies.
EFU gave the emerging insurance industry the leadership, the manpower and the drive needed
to grow in a situation where at one time, three-fourths of insurance was held by foreign
companies.
The company has also taken the initiative to transform its Enterprise Information System with an
end to end solution comprising Oracle's latest technological software and hardware as part of
the infrastructure solution to meet Company's projected Online Transaction Processing needs,
keeping in view both the present requirements and future needs such as Data Warehouse,
business intelligence and Customer Relationship Management System.

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VISION STATEMENT
Our vision is to be the first choice company for our customers, shareholders and employees. To
achieve this we will be driven by an obsession to be better than the best in a continuous
journey, not a destination.
At EFU first choice means a sustained commitment to meet and exceed stakeholder
expectations. A will to go the “Extra Mile” to delight our customers with products and services
that exceed their expectations
MISSION STATEMENT
We will manage our affairs through modern technology, collective wisdom and institutionalized
leadership. We will be a respected, cultured and an educated company with a strong market
position. Together with our customers, reinsurers and employees we will achieve world class
quality standards through continuous quality improvement. Achieve zero defects in everything
we do.
We will do good business, with good clients and of the highest integrity. We will not
compromise our principles and we will like to be known as a responsible corporate citizen aware
of our obligation to the Government and the society we serve.
OBJECTIVES
Retain leadership position in the market
Explore opportunities by introducing new products and diversifying current product portfolio
Pursue continuous improvement and technological advancement
Enhance corporate capabilities and motivation through skill enhancement, management
development and reward programs

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FINANCIAL STATEMENT
Profit and Loss Account
For the year ended 31 December 2014 Sustained Success
Rupees
‘000
Fire & Marine,
property aviation & Aggregate Aggregate
Note damage transport Motor Others Treaty 2014 2013
Revenue account
Net premium revenue 20 1 869 012 1 447 100
2 812
952 403 288 – 6 532 352 6 341 517
Net claims ( 555 884 ) ( 615 644 ) ( 1 560 770 ) ( 244 151 ) 3 424 ( 2 973 025 ) ( 3 406 415 )
Management expenses 21 ( 392 499 ) ( 303 896 )
( 701 328
) ( 84 692 ) – ( 1 482 415 ) ( 1 374 718 )
Net commission ( 356 854 ) ( 235 510 )
( 248 684
) 80 538 – ( 760 510 ) ( 788 536 )
Underwriting result 563 775 292 050 302 170 154 983 3 424 1 316 402 771 848
Investment income 914 981 771 958
Rental income 118 699 101 037
Profit on deposits 114 692 113 299
Other income 23 30 981 22 876
Share of profit of an associate 13.1.1 404 436 398 562
General and admin istration
expenses 24 ( 591 783 ) ( 524 246 )
Workers’ welfare fund ( 46 168 )
( 32 458
)
945 838 851 028
Profit before tax 2 262 240 1 622 876
Provision for taxation 25 ( 433 189 ) ( 230 644 )
Profit after tax 1 829 051 1 392 232
Profit and loss approp riatio n
acco un t
Balan ce at commencem en t of the
year 1 645 027 1 518 262
Profit after tax for the year 1 829 051 1 392 232
Other comprehensive income 34 119 9 533
Final dividend for the year 2013 Rs. 4.00 per share (2012: Rs. 4.00 per
share) ( 500 000 ) ( 500 000 )
Issuance of bonus shares for the year 2013 Rs. 2.8 (28 %) per share (2012:
Nil) ( 350 000 ) –
Interim dividend for the year 2014 Re. 1.00 per share (2013: Re. 1.00 per
share) ( 160 000 ) ( 125 000 )
Transfer to general reserve ( 500 000 ) ( 650 000 )
Balance unapprop ri ated profi t at end of the
year 1 998 197 1 645 027
Restated
Earning s per share - basic and
diluted 26 (Rupees) 11.43 8.70

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ACCOUNTS DEPARTMENT
It is all the more necessary for an organization or a concern to keep proper accounts. At the end
of the year the true result of the economic activities of a concern must be made available
otherwise it will not be possible to run the concern. In case of a business concern the profit or
loss at the end of a year must be ascertained, because, the amount of profit must be adequate
in relation to that of investment made in the business. If it is not so or if there is a loss, it is an
indication of some defects existing somewhere in the management of the business. All such
defects need to be detected and analyzed and appropriate measures taken for their rectification.
But it is only possible, if proper books of accounts are maintained in the business concern. So,
the importance of bookkeeping to a business is the same as that of fresh air to a man to exist.
Without bookkeeping records a business would meet death, though not instantly, but in a short
time.
FUNCTIONS OF ACCOUNTING DEPARTMENT
The function of an accounting department is to look after the finances of a company. This can
be anything from paying bills to making sure that the employees that work for the company get
paid.
Making Payments
Making sure that all bills and claims are paid by the company, on time and also at the least cost
possible .If there is a discount for paying quickly, the accounts department will usually pay the
bills as soon as possible so that the company spends as little money as they possibly can. They
are responsible for all outgoing payments and making sure that what they are paying is correct.
Payroll
The accounts department have to ensure that the employees are all paid correctly and on time.
They also have to make sure that all of the employees are paying the right amount of tax and
that they have not made any mistakes with tax brackets and government payments on behalf of
the employees.
Receiving Payments
The accounting department must also receive payments and make sure that these are all
processed correctly. These will all be payments for the services or products the company has
provided and they must ensure that they have paid all relevant tax. There will also be an element
of chasing up payments and making sure that all of the payments are received when they
should be.

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SERVICES OF INSURANCE
MARINE INSURANCE
Marine insurance covers the loss or damage of ships, cargo, terminals, and any transport or
cargo by which property is transferred, acquired, or held between the points of origin and final
destination. That’s why
"Marine Insurance is said to be Mother of all Insurances”.
At EFU General Insurance two major types of Marine Insurances are issued.
MARINE CARGO
In Marine Insurance coverage is provided for goods in transit for both Import and Export and
the mode of conveyances on waterways, air and land routes Marine Cargo Insurance is divided
mainly into three segments
Import
The goods are covered from warehouse to warehouse the contract is usually on C&F and CIF
basis.
Export
The goods are covered from warehouse to warehouse. The contracts can be CIF and FOB basis.
Inland Transit
The goods are covered from anywhere in Pakistan to anywhere in Pakistan.
The covers with respect to above segments are granted as per London Institute Cargo Clauses A,
B & C.
Whereas clause “A” provides widest and most comprehensive cover while clause “C” provides
the narrowest scope of cover.
AVIATION INSURANCE
No one will ever know when mankind first tried to fly,
but it is clear that man envied the gift given by nature to the animal kingdom, that is, the ability
to fly. Very large sums are invested in modern aircraft and their operation. The largest modern
airliners cost up to Pak Rupees 14 billion each and may carry over 500 passengers whose
collective worth, if compensation for death or injury has to assessed, may run to a further Pak
Rupees 50 billion. Even a small private aircraft may be the cause of a mid-air collision with
similar financial consequences. The failure of a component manufactured by a small company
may result in the loss of a fully loaded airliner. Because such catastrophic loss may arise it is
normal for aviation risks to be excluded from many kinds of general insurance policy.

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BUYERS OF AVIATION INSURANCE
Commercial Aircraft Operators
Corporate and Business Aircraft Operators
Aerial Work and Air Taxi Operators
Private Owners and Flying Clubs
Air-Craft Manufacturers
Owners and Operators of Air-Ports, Hangers
Aircrew
Passengers
Shippers Of Goods By Air
Lessors (Banks, Financial Institutions)
Hang Gliders
Conventional Gliders, Balloons and Hovercraft
HOME INSURANCE
Safety of home is a big challenge in the present circumstances and if
things go wrong, like burglary or fire - it is important to have right
insurance. With EFU’S HOME INSURANCE PLUS you can be sure that your most important
insurance needs are automatically coveredwithout any hidden notes.
PROPERTY IS INSURED AGAINST?
Home Insurance Plus protects against loss/damagecaused by:
Fire, explosion (including explosion of domestic appliances like geyser and stoves) lightning,
thunderbolt, earthquake
Flood, typhoon but excluding rain damage except when occurring during or immediately after
typhoon
Impact by road vehicle
Personal accident cover
SHOP INSURANCE
EFU, being INNOVATORS of world class quality insurance products;
introduce SHOP INSURANCE cover. Under this policy your shop (both building and contents or
just building or contents), neon sign & plate glass are protected against the following perils:
Fire, lightning, thunderbolt and short circuit.

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Malicious damage.
Explosion.
Terrorism.
Impact by any road vehicle.
Atmospheric disturbance (flood, cyclone and typhoon).
Earthquake.
In addition to the above traditional risks, following are special features of our policy:
FIRE INSURANCE
EFU Insurance writes a portfolio
comprising a broad spread of quality
business relating to industrial, commercial and service activities, including transportation, oil
production, manufacturing, engineering, banking, and other miscellaneous services. The
business written ranges from simple commercial property risks to the largest and most
sophisticated industrial and energy risks.
CLIENT FOCUS
The team of EFU Insurance claims and business administration specialist ensure that client's
affairs receive immediate and responsive attention, using sophisticated management systems
based on the latest information and communication technology. Providing expert advice on the
interpretation and consequences of contractual obligations, together with the efficient handling
and prompt settlement of claims, underlines the dedication of EFU Insurance to provide the
utmost quality of service to clients and a commitment to develop long-term and mutually
beneficial relationships with our clients. EFU takes a proactive role in developing innovative
solutions, which meet the specific requirements of its clients.
TYPES OF POLICIES
Property policies come in three basic types; package, combined and single. Example of
package policies is that of a household policy (domestic) and a shopkeeper policy (commercial).
The package policy contains a number of different sections e.g. fire, accidental damage, glass,
theft, third party liability, employers liability, goods in transit, money, and the insured usually
buys the policy as a whole, although small modifications can be made if required. The cover,
limits, and sums insured are standard for each policy issued to the same trade, or section of the
market for which it is designed.

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A combined policy is one where separate sections are brought together to create a policy which
is specific to the needs of the organization insuring. These policies are usually bound by a front
and back cover.
The insured can elect to have particular sections included within the policy, which is tailored
specifically client by client; i.e. one insured may choose, fire, business interruption, theft and
glass coverage, whereas another client may choose fire, theft, glass, money, goods in transit and
frozen food coverage, because this would be more particular to his need.
The single policy on the other hand is one where only one type of cover is provided such as fire
policy or a theft policy; single policies are however, becoming rarer since the combined policy
can be adapted to suit most needs of an organization.

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RECOMMENDATION
Mostly insurance companies are endeavoring to bring to its customers new and improved
products and services that provide efficient and effective solutions such as web-based e-
insurance company allows its customers to access its insurance services via internet. Corporate
customers can efficiently conduct their day-to-day insurance covers claim information, current
status of the claim, rate of premium of different risks and much other information as they
required via an automated, versatile and a straight through processing platform's would like to
recommend Askari insurance company to provide this facility to their customers as well.
There should be central complaint cell in company in order to reduce the people’s complaints
and foster the ratio of productivity.
REFRENCES
www.google.com
www.smedia.org
www.wikipedia.org
www.efuinsurance.com
http://www.investopedia.com