Internship Report On Universal Insurance Company: Zara Rafique

INTERNSHIP REPORT ON UNIVERSAL INSURANCE COMPANY
ZARA RAFIQUE
ROLL NO. 3 4 4
SESSION 2005-2007
HAILEY COLLEGE OF COMMERCE UNIVERSITY OF THE PUNJAB LAHORE
DECLARATION
I, Zara Rafique, Roll No.344, student of M.com, Session 2005-2007, printed hereby in declare the ON that the titled information report
INTERNSHIP
REPORT
UNIVERSAL
INSURANCE COMPANY is my own work and has not been printed, published and submitted as an internship report, thesis or publication in any University, Research Institution etc, in Pakistan or abroad.
Dated: __________________________
Signature of Deponent Zara Rafique
COMPLIANCE CERTIFICATE
It is certified that an internship report named INTERNSHIP REPORT ON UNIVERSAL INSURANCE COMPANY has been carried out and completed by Miss Zara Rafique, Roll No.344 under my supervision during the specific time given to her.
Date:_______________
Supervisor Prof. Usman Rafique
DEDICATED TO
Dedicated to the Holy Prophet (Peace Be Upon Him) who is the blessing of Allah for whole universe, To my Father Muhammad Rafique, Mother Mrs.Najma Rafique & The respectable principal of Hailey College of commerce Sir Chaudhary Nazir Ahmad
TABLE OF CONTENTS
Chapters Statement of Submission Declaration Certificate Dedication Acknowledgment Table of Contents List of Tables List of Figures Chapter1 1.1 1.2 1.3 Chapter 2 Chapter 3 3.1 3.2 3.3 3.3.1 Introduction Objectives of the study Methodology Organization of the study Literature Review Theoretical Framework What is market? Whet is marketing? Marketing techniques Marketing mix Title Page No Ii iii iv v vi vii x xi 1-6 4 4 5 7-17 18-55 18 18 21 23
3.3.2 3.3.3 3.3.4 3.3.5 3.3.6 3.3.7 3.4 2.5 Chapters 3.5.1 3.6 3.6.1 3.6.2 3.7 3.8 3.9 3.10 3.10.1 3.10.2 3.10.3 3.10.4 3.10.5 3.10.6 3.11 3.11.1 3.11.2 3.11.3 3.11.4 3.11.5 3.11.6 3.11.7
Promoting Advertising Promoting Packaging Brand Channel distribution Product Services Title History of Services What are financial services? Financial advice Financial regulation How gives financial services? What is bank? Banking services Providers of financial services Retail banks Commercial banks Private banks Building Societies Supermarkets Capital market banks Types of financial services Banks card Credit cared machine services and networks Investment services Custody services Insurance related services Intermediation or advisory services Conglomerates 6
23 24 24 24 25 25 26 27 Page No 28 29 29 30 30 30 31 31 31 32 32 32 33 33 34 34 34 35 35 35 36 36
3.12 3.13 3.14 3.15 3.16 3.16.1 Chapters 3.16.2 3.17 Chapter 4 4.1 4.2 4.2.1 4.2.2 4.2.3 4.2.4 Chapter 5 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.10.1 5.10.2
Market share Financial services Difference between services and financial services Vision of Pakistan financial service industry Marketing strategies offered by banks under consumer loan Foreign bank Title Pakistani bank Marketing Strategies of both banks (foreign and Pakistani) for Consumer Production Including Personal Loans A Roadmap for Marketing of Financial Services with Regarding Issues Pakistan financial sector, a roadmap for 2005-2010 Issues related with the marketing of financial sector The first issue The second issue The third issue The marketing environment Results and Analysis of Data Performance review of both banks (SCB and Bop) Marketing polices regarding the personal loan SCB Marketing policies regarding the personal loan BOP Market polices analysis of both banks (SCB and BOP) SCB consumer loan breakup for December 2006 BOP loan breakup (Sector wise) for September 2006 Division of personal loan disbursement in foreign and Pakistani banks Comparison of marketing strategies between foreign and Pakistan banks regarding personal loan Brief analysis of market policies by foreign and Pakistan banks regarding personal loans Risk Management Credit risk Market risk 7
37 38 39 39 44 44 Page No 49 52 56-81 56 63 64 66 68 70 82-94 82 84 85 86 88 89 90 91 92 93 93 93
5.10.3 Chapter 6
Interest rate risk Conclusions and Recommendations Recommendations References
94 95-97 98-99 100-102
List of Table
Sr. No 3.1 5.2 5.3 5.4 5.5 Title Financial services band equity Marketing polices regarding the personal loan SCB Marketing policies regarding the personal loan BOP Comparison of marketing strategies between foreign and Pakistan banks regarding personal loan Brief analysis of market policies by foreign and Pakistan banks regarding personal loans Page No 38 84 85 91 92
ACKNOWLEDGEMENT
I am very thankful to Almighty Allah, Creator of all of us, worthy of all praises who blessed me with courage and power to complete this work. All praises for Him, Who guides us in darkness and helps in difficulties. All respects and regards for the Holy Prophet Muhammad (PBUH) who remains a torch of knowledge and guidance who enables us to recognize our creator and understand the philosophy of life. I also wish to express my gratitude to my honorable professors whose incredible guidance, sustained encouragement, constructive criticism and sympathetic attitude during the period of my studies enables me to stand in front of difficult situations. I am also thankful to all my friends Ayesha Khalid,Muhammad Bilal, Adeel Ahmad, Tahira Feroz, & Fariha Rafique for their encouraging behaviour and help. I am also thankful to my seniors, fellows, and well wishers especially to Mr.Kashif (reinsurance officer, UIC). The sacred personalities for me are my beloved, respected parents & my brothers and sisters for their cooperation, love and prayers. They are of course a source of success for my bright future.
ZARA RAFIQUE
Signature
PREFACE
This internship report is especially prepared for understanding the different concepts of insurance.THE UNIVERSAL INSURANCE COMPANY LIMIED is one of the biggest companies in pakistan.It has 8th number in the largest companies of pakistan.This firm is going to serve our economy by insuring the goods either in land or sea_ or by air. This firm wants to show the marvelous performance from its date of commencement. In my report I have discussed different methods & rules through which firm serves its customers and makes treaties for different insurance goods. UIC is firmly grounded with a corporate philosophy that incorporates solid values. It believes in serving the nation & building the country strong. With a revamped customer oriented philosophy, this firm is pursuing new avenues of leadership through its better services and insurance terms.
ZARA RAFIQUE
10
Signature
EXECUTIVE SUMMARY
This is the internship report of Universal Insurance Company, which tells us the procedure of insurance what are the rules & regulations to make the treaty? At what rate the policy should be made? And up to which limit the risk on insurance should be accepted at one time (pre bottom/per risk)? This firm reinsures itself against claims & accepts liability up to some specific limit ...so as to avoid and scatter the risk. It provides insurance facility to national & international cargo companies. To further scatter its risk, it uses the facility of CO-INSURANCE & FACULTATIVE REINSURANCE. With a view to develop a better understanding of the issues faced by UIC, it develops different new concepts to improve its position in the market.
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SECTION 1
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MISSION & VISION STATEMENT
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Vision Statement
We, at The Universal Insurance Company Limited, recognize the importance of satisfying our customers by consistently providing quality insurance services in accordance with their needs expectations. We strive to be competent partner of our customers against insured perils.
Mission Statement
The Universal Insurance Company Limited endeavors to be one of the leading insurance companies in Pakistan by securing its customer through prudent underwriting, providing superior quality of insurance services and strives to bring prosperity to its share holders and stakeholders by generating profitable returns
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OVERVIEW OF UIC
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The Universal Insurance Company Limited

A part of Bibojee Group of Companies was established by an eminent industrialist the late Lt. Gen. R. M. Habibullah Khan Khattak. This Company entered insurance market in 1960 and at present it is the largest insurance company in the Pakistan. The company is fully protected through its world renowned re insurers among are:
Hanover Reinsurance Company, West Germany Somitomo Marine and Fire Insurance Company, Japan Korean Reinsurance Company, Korea J.B Boda & Company (Broker), Singapore
With the vast and diversified reinsurance arrangements the Universal Insurance Company is able to underwrite risks of heavy magnitude. For larger industrial risks Company has standing facultative reinsurance arrangements with local insurance companies. Further more Companys policy to provide prompt service coupled with excellent claim settling record of about four decades Universal has been chosen by large industrial units for providing them efficient technical insurance services. This clientage includes Textile/Spinning Mills, Flour Mills, Sports and Surgical Manufacturers, Garment Factories, Sugar Mills, Ghee Industries and various other industrial projects the number of which runs over fifteen thousand. Amongst these some industrial Projects are: General Tyre & Rubber Company of Pakistan, Gandhara Nissan Limited, Gandhara Nissan Diesel Limited, Gandhara Industries Limited (previously National Motors), Bannu Woollen Mills Limited, etc. We are on approved panel of all the local and foreign Banks/Financial Institutions/Leasing 16 Companies and Modarabas etc. with reasonable bank limits, which enable us to underwrite
HISTORY OF UIC
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HISTORY
THE UNIVERSAL INSURANCE COMPANY LIMITED, a part of Bibojee Group of Companies, was established by an eminent industrialist the late Lt. Gen. R.M habibullah khan khattak. The company was incorporated in 1959 and has established its franchise in the general insurance market. On premium portfoilo basis UNIVERSAL is one of the Top Ten insurance companies and has been rated as A- with Stable outlook by JCR-VIS RATING company limited.
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ESTABLISHMENT OF BRANCHES IN PAKISTAN
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GENERAL OFFICER OFFICES

3RD Floor Waheed Plaza, 52-W Jinnah Avenue, Blue Area. Ph# (051) 2277555-56, 2825552, Fax # 2825554 Mr.Fazal-ur-Rehman Malik, Executive Director (operations). Cell # 03008566777. EDEN CENTRE LAHORE 213-Eden Centre, 43-Jail Road, Ph# (042) 7596684, Fax# 7585297 Mr. Mushtaq Ahmad, GM (dev), Cell# 0300-8447890 Mr. S.Naseem Hassan Jafree, Zonal Manager, Cell# 0300-8459722 Mr. Anwer Ahmad Chaudary, Regional Manager, Cell# 0303-6415771 PRINCIPAL OFFICE KARACHI 807-Business & Finance Centre, I. I. Chundrigarh Road, Ph# (021) 2446036-38, Fax# 2446039 Mr. Pervez Chaghtai, GM (dev), Cell# 03008294592. Oberoi Building, Paris Road. Ph# (4032) 598402, 596849, 591023-2,5 Fax # 593022 Mr. Musa Saleem, GM (dev), Cell#0300-8618080 Mr. Asim Saleem, Asst.GM, Cell# 0300-8618181 Mr. Qaiser Hameed Khan, Zonal Manager, Cell# 0300-7347859 Mr. Nauman Shaukat, Br Manager, Cell# 03008619922 KUTCHERY ROAD SIALKOT Opp Nishat Cinema, Kutchery Road. Ph# (4032) 262770, 263371-4, Fax# 268073 Mr. Amer Majeed Khan, GM (dev), Cell# 03008611501 Mr. Nisar.A.Bhatti, Zonal Manager, Cell# 03008619966 Mr. Asim Habib Khan, Zonal Manager, Cell# 03008621212 Mr. Ahmad Ali Bhatti, Regional Manager. MULTAN 1ST Floor Khawar Centre, Nusrat Road Multan Cantt. Ph#(061) 541004, 545404, 540004. Rana Abdul Hameed, GM (dev), Cell# 03008730104.
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PRESENT STATUS
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63-Shahrah Quaid E-Azam, Mumtaz Centre Queens Road, Ph# (042) 7353315, 7311608 Ph# (042) 6374533,6373784 Fax# 6374533 Fax# 7353315 Mumtaz Centre Queens Road, Hassan, Cell# 0300-8556454 Madam Gul 63-Shahrah Quaid E-Azam, Mr. Salman-ul- Ph# (042) 6374533,6373784 Fax# 6374533Mirza, Regional Haq, Cell# 0300- Mr.Sikandar Shamsher Ph# (042) 7353315, 7311608 Fax# 7353315 8441828 Manager Mr. Salman-ul- Haq, Cell# 0300-8441828 Madam Gul Hassan, Cell# 0300-8556454 Cell#. 0300-8474701 Mr.Sikandar Shamsher Mirza, Regional Manager ISLAMABAD Cell#. 0300-8474701 ABOTT ROAD SIALKOT 3rd Floor Waheed Plaza ,52-W SIALKOTSports, Abott Road ISLAMABAD ABOTT ROAD Near Ok Jinnah Avenue ,Near Ok Sports, Abott Road 262603-64 Fax# 262601 Ph# (4032) 3rd Floor Waheed Plaza ,52-W Jinnah Avenue , Blue Area. Mr. Nadeem Sohail Blue Area. Ph# (4032) 262603-64 Fax# 262601 Qureshi, Cell# 0300Ph# (051) 2277555-56,2825558. 8617856 Cell# 0300-8617856 Ph# (051) 2277555-56,2825558. Mr. Nadeem Sohail Qureshi, Malik Zafar Yousaf,Touheed Qaiser, Sr.Manager,Cell# 0300-8616856 Malik Zafar Yousaf, Cell# 0300-8556454 Mr. Cell# 0300- Mr. Touheed Qaiser, Sr.Manager,Cell# 03008556454 8616856 ASSISTANT GENERAL MANAGER OFFICES ASSISTANT GENERAL MANAGER OFFICES SADDAR ROAD PESHAWAR KUTCHERY ROAD FAISALABAD SADDAR ROAD PESHAWAR KUTCHERY Universal Insurance Building, ROAD FAISALABAD Bazar, Akbar Road, Kutchary Universal Insurance Building, Saddar Road Saddar Road Akbar Road, Kutchary Bazar, 641977 Fax# 601388 Ph# 632917 Peshawar Cantt. Peshawar Cantt.Ph# 632917 641977 Fax# 601388Chaudhry, Cell# 0300-6601228 Mr. M Irshad Ph#.091-273789 Fax# 272246 Mr. M Irshad Ph#.091-273789 Fax# 272246Chaudhry, Cell# 0300-6601228 Mr. Iftikhar-ud-Din Durrani, Cell# 0333-9106008 Iftikhar-ud-Din Durrani, Mr. Cell# 0333-9106008 CIRCULAR ROAD FAISALABAD CORPORATE BRANCH OFFICE CIRCULAR ROAD P-184 Jamal Building, Circular Road. Universal InsuranceCORPORATE BRANCH OFFICE Building, Saddar Road, FAISALABADPeshawar Cantt. Ph# (041) 643532-623322 Rana M Shaukat, Cell# 0300-6601228 Ph# 091-273794, Universal Insurance Building, Saddar Road, P-184 Jamal Building, Circular Fax#. 091-272267 Mr. Javed Akhter, Cell#0300-8441828. Road. Peshawar Cantt. Mr. M.Sohail KhanPh# 091-273794, 0300-8476713 ,Manager, Cell# Fax#. 091-272267 Ph# (041) 643532-623322 Mr.Nasrullah Rana M Shaukat, Cell# 0300- Khan, Br Manager. Mr. Javed Akhter, Cell#0300-8441828. 6601228 Mr. M.Sohail Khan ,Manager, Cell# 030063-Shahrah Quaid E-Azam, 8476713 Ph# (042) 7353315, 7311608 Fax# 7353315 Mr.Nasrullah Khan, Br Manager. Mr. Salman-ul- Haq, Cell# 0300-8441828
PRESENT STATUS OF THE COMPANY
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63-Shahrah Quaid E-Azam, Ph# (042) 7353315, E-Azam, Queens Road, 63-Shahrah Quaid E-Azam, 63-Shahrah Quaid 7311608 Fax# 7353315 Centre Queens Road, Mumtaz Centre Mumtaz Mr. Salman-ul- Haq, Cell# 0300-8441828 Ph# (042) 7353315, 7311608 Fax# 7353315 Ph# (042) 7353315, (042) 6374533,6373784 Fax# 6374533 Ph# 7311608 Ph# (042) 6374533,6373784 Fax# 6374533 Mr. Salman-ul- Haq, Cell# 0300-8441828 Fax# 7353315 Madam Gul Hassan, Cell# 0300-8556454 Madam Gul Hassan, Cell# 0300-8556454 Mr. Salman-ul- Mr.Sikandar Shamsher Mirza, Regional Manager Regional Haq, Cell# 0300- Mr.Sikandar Shamsher Mirza, 8441828 Quaid E-Azam, Cell#. 0300-8474701 ManagerCentre Queens Road, 63-Shahrah Mumtaz Cell#. 0300-8474701 Ph# (042) 7353315, 7311608 Ph# (042) ISLAMABAD ABOTT ROAD SIALKOT 6374533,6373784 Fax# 6374533 ISLAMABAD ABOTT Madam Gul Hassan, Cell# 0300-8556454 3rd Floor Waheed Plaza ,52-W Jinnah Avenue ,Fax# 7353315 Near Ok Sports, Abott Road ROAD SIALKOT Mr. Floor Waheed Plaza ,52-W Haq, Cell# 262603-64 Fax# Sports, Abott Mirza, 3rd Salman-ul- Ph# (4032) 0300- Mr.Sikandar ShamsherRoad Regional Near Ok 262601 Blue Area. 8441828 Jinnah Avenue ,Mr. Nadeem SohailManager Cell# 0300-8617856 Ph# (4032) 262603-64 Fax# 262601 Ph# (051) 2277555-56,2825558. Qureshi, Cell#. 0300-8474701 Blue Area. Mr. Nadeem Sohail 0300-8616856 Malik Zafar Yousaf, Cell# 0300-8556454 Mr. Touheed Qaiser, Sr.Manager,Cell# Qureshi, Cell# 0300Ph# (051) 2277555-56,2825558. ABOTT ROAD SIALKOT 8617856 ISLAMABAD Malik Zafar Yousaf, Cell# 0300- Near Ok Sports, Abott Road Mr. Touheed Qaiser, Sr.Manager,Cell# 03003rd Floor Waheed Plaza ,52-W ASSISTANT GENERAL MANAGER OFFICES Avenue , 8556454 8616856 Jinnah Ph# (4032) 262603-64 Fax# 262601 ASSISTANT KUTCHERY ROAD FAISALABAD Blue Area. GENERAL MANAGER OFFICES Qureshi, Cell# 0300Mr. Nadeem Sohail SADDAR ROAD PESHAWAR Ph# (051) 2277555-56,2825558. 8617856 Universal Insurance Building, Saddar Road Akbar Road, Kutchary Bazar, SADDAR ROAD PESHAWAR KUTCHERY ROAD FAISALABAD Malik Zafar Yousaf,632917 641977 Fax# 601388 Qaiser, Sr.Manager,Cell# 0300Peshawar Cantt. Ph# Cell# 0300- Mr. Touheed Kutchary Bazar, Universal Insurance Building, Akbar Road, 8556454 8616856 0300-6601228 Ph#.091-273789 Fax# 272246 Saddar Road Mr. M Irshad Chaudhry,632917 641977 Fax# 601388 Ph# Cell# ASSISTANT GENERAL MANAGER OFFICES Mr. Iftikhar-ud-Din Durrani, Cell# 0333-9106008 Peshawar Cantt. Mr. M Irshad Chaudhry, Cell# 0300-6601228 Ph#.091-273789 Fax# 272246 SADDAR ROAD PESHAWAR KUTCHERY ROAD FAISALABAD CIRCULAR ROAD FAISALABAD CORPORATE Akbar Road, Kutchary Bazar, Mr. Iftikhar-ud-Din Building, BRANCH OFFICE Universal Insurance Durrani, P-184 Jamal Building, Circular Road. Building, Saddar Road, Cell# 0333-9106008 Saddar Road Universal InsurancePh# 632917 641977 Fax# 601388 Ph# (041) 643532-623322 Peshawar Cantt.Peshawar Cantt. Mr. M Irshad Chaudhry, Cell# 0300-6601228 Rana M Shaukat, Cell# 0300-6601228 Ph# 091-273794, CORPORATE CIRCULAR ROAD Ph#.091-273789 Fax# 272246 Fax#. 091-272267BRANCH OFFICE FAISALABADMr. Durrani, Mr. Iftikhar-ud-Din Javed Akhter, Cell#0300-8441828. Mr. ,Manager, Cell# 0300-8476713 Cell# 0333-9106008M.Sohail KhanUniversal Insurance Building, Saddar Road, P-184 Jamal Building, Circular Mr.Nasrullah Khan, Br Manager. Road. Peshawar Cantt. Ph# (041) 643532-623322 Ph# 091-273794, Fax#. 091-272267 CIRCULAR ROAD CORPORATE BRANCH OFFICE Rana M Shaukat, Mr. Javed Akhter, Cell#0300-8441828. FAISALABAD Cell# 03006601228 Mr. M.Sohail Khan Building, Cell# 0300P-184 Jamal Building, Circular Universal Insurance ,Manager, Saddar Road, 8476713 Road. Peshawar Cantt. Mr.Nasrullah Khan, Br 091-272267 Ph# (041) 643532-623322 Ph# 091-273794, Fax#. Manager. Rana M Shaukat, Cell# 0300Mr. Javed Akhter, Cell#0300-8441828. 6601228 Mr. M.Sohail Khan ,Manager, Cell# 03008476713 Mr.Nasrullah Khan, Br Manager.
The Universal Insurance Company Limited
UIC Underwrites all sorts of risks i.e. Fire, Marine, Motor Vehicle, Personal Accident, Workmen Compensation, Contractors All Risks, Erection All Risks, Fidelity Guarantee, Money Insurance, Loss of Profits, Machinery & Equipment Breakdown etc. The extensive experience and professional background its underwriters have in insurance management, enables it to offer a full range of insurance coverage tailored to the specific needs of its clients and it gives back this with personalized service approach.
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HEAD OFFFICE
Universal Insurance House 63, shahra-e-Quaid-E-Azam Lahore Tel : 042-7353458_7353453 Fax : 042-7230326 Email : info@uic.com.pk Web : www.uic.com.pk
63-Shahrah Quaid E-Azam, Mumtaz Centre Queens Road, Ph# (042) 7353315, 7311608 Fax#63-Shahrah Quaid E-Azam, Ph# (042) 6374533,6373784 7353315 Fax# 6374533 Ph# (042) 7353315, 7311608 Fax# 7353315 Mr. Salman-ul- Haq, Cell# 0300- Haq,Madam Gul Hassan, Cell# Mr. Salman-ulCell# 0300-8441828 8441828 0300-8556454 Mr.Sikandar Mumtaz Centre Queens Road, Shamsher Mirza, Regional Manager Ph# (042) 6374533,6373784 Fax# 6374533 Madam Gul Hassan, Cell#. 0300-8556454 Cell# 0300-8474701 ISLAMABAD ABOTT Regional Manager Mr.Sikandar Shamsher Mirza,ROAD SIALKOT Cell#. 0300-8474701 3rd Floor Waheed Plaza ,52-W Jinnah Near Ok Sports, Abott Road ISLAMABAD Avenue , Ph# (4032) 262603-64 Fax# ABOTT ROAD SIALKOT Blue Area. 262601 3rd Floor Waheed Plaza ,52-W Jinnah Avenue , Ph# (051) 2277555-56,2825558. Mr. Nadeem Sohail Qureshi, Blue Area. Malik Zafar Yousaf, Cell# 0300Cell# 0300-8617856 Ph# (051) 2277555-56,2825558. Qaiser, 8556454 Mr. Touheed Malik Zafar Yousaf, Sr.Manager,Cell# 0300Cell# 0300-8556454 Near Ok Sports, Abott Road 8616856 Ph# (4032) 262603-64 Fax# 262601 ASSISTANT GENERAL MANAGER OFFICES Mr. Nadeem Sohail Qureshi, Cell# 0300-8617856 SADDAR ROAD PESHAWAR KUTCHERY ROAD Mr. Touheed Qaiser, Sr.Manager,Cell# 0300FAISALABAD 8616856 Universal InsuranceASSISTANT GENERAL MANAGER OFFICES Building, Saddar Akbar Road, Kutchary Bazar, Road Ph# 632917 641977 Fax# SADDAR ROAD PESHAWAR Peshawar Cantt. KUTCHERY ROAD FAISALABAD 601388 Ph#.091-273789 Fax# 272246Insurance Building, Saddar Road Cell# Mr. M Irshad Chaudhry, Universal Mr. Iftikhar-ud-DinPeshawar Cell# Durrani, Cantt. 0300-6601228 0333-9106008 Ph#.091-273789 Fax# 272246 Mr. Iftikhar-ud-Din Durrani, Cell# 0333-9106008 Akbar Road, Kutchary Bazar, Ph# 632917 641977 Fax# 601388 Mr. M Irshad Chaudhry, Cell# 0300-6601228 CIRCULAR ROAD FAISALABAD CORPORATE BRANCH OFFICE P-184 Jamal Building, Circular Road. Ph# (041) 643532-623322 Rana M Shaukat, Cell# 0300-6601228
ZON
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Universal Insurance Building, Saddar Road, Peshawar Cantt. Ph# 091-273794, Fax#. 091-272267 Mr. Javed Akhter, Cell#0300-8441828. Mr. M.Sohail Khan ,Manager, Cell# 0300-8476713
WORKING AT UIC
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63-Shahrah Quaid E-Azam, Ph# (042) 7353315, 7311608 Fax# 7353315 Centre Queens Road, 63-Shahrah Quaid E-Azam, Mumtaz Mr. Salman-ul- Haq,7311608 Ph# (042) 7353315, Cell# 0300-8441828 Ph# (042) 6374533,6373784 Fax# 6374533 63-Shahrah Quaid E-Azam, Fax# 7353315 Mumtaz Centre Queens Road, Hassan, Cell# 0300-8556454 Madam Ph# (042) 7353315, E-Azam, 63-Shahrah Quaid E-Azam, 63-Shahrah Quaid 7311608 Fax# 7353315 Gul Road, Mumtaz Centre Haq, Cell# 0300- Mumtaz Centre QueensMirza, Regional Queens Road, Mr. Salman-ul- Ph# Cell# 0300-8441828 Mr.Sikandar Shamsher Ph# (042) 7353315, 7311608 Fax# 7353315 Mr. Salman-ul- Haq, (042) 6374533,6373784 Fax# 6374533 Ph# (042) 7353315, 7311608Fax# 6374533 6374533,6373784 Fax# 6374533 Ph# (042) Ph# (042) 6374533,6373784 8441828 Manager Hassan, Mr. Salman-ul- Haq, Cell# 0300-8441828 Fax# 7353315 Madam Gul Hassan, Cell# 0300-8556454 Madam Gul Madam Gul Hassan, Cell# 0300-8556454 0300-8474701Cell# 0300-8556454 Mr. Salman-ul- Mr.Sikandar Shamsher Manager Haq, Cell# 0300- Cell#. Mr.Sikandar Shamsher Mirza, Mr.Sikandar Shamsher Mirza, RegionalMirza, Regional Manager Regional ISLAMABAD Cell#. 0300-8474701 ABOTT ROAD SIALKOT 8441828 Manager 63-Shahrah Quaid E-Azam, Mumtaz Centre Queens Road, Cell#. 0300-8474701 3rd Floor Waheed Plaza ,52-W Near(042) Cell#. 0300-8474701 Ph# (042) 7353315, 7311608 Ph# Ok Sports, Abott Road ISLAMABAD ISLAMABAD ABOTT ROAD SIALKOT 6374533,6373784 Fax# 6374533 Jinnah Avenue , Ph# (4032) 262603-64 Fax# ISLAMABAD ABOTT Fax# 7353315 Near Ok Sports, Abott Road ROAD SIALKOT 262601 Madam Gul Hassan, Cell# 0300-8556454 ABOTT ROAD SIALKOT 3rd Floor Waheed Plaza ,52-W Jinnah Avenue ,Blue Area. Mr. Floor Waheed Plaza ,52-W Jinnah Avenue , ShamsherRoad Cell# 0300Haq, Cell# 262603-64 Nadeem Sohail Qureshi, Mr.Sikandar 3rd Salman-ul- Ph# (4032) 0300- Mr.Fax# Sports, Abott Mirza, Regional Near Ok Blue Area. Ph# (051) 2277555-56,2825558. 8617856 262601 8441828 Jinnah Avenue ,Mr. Nadeem SohailManager Cell# 0300-8617856 Ph# (4032) 262603-64 Fax# 262601 Blue Area. Ph# (051) 2277555-56,2825558. Qureshi, Malik Zafar Yousaf, Cell# 0300- Mr. Touheed Sohail Qureshi, Cell# 0300Blue(051) 2277555-56,2825558. Cell#. 0300-8474701 Sr.Manager,Cell# 0300Area. Mr. Nadeem Qaiser, Ph# Malik Zafar Yousaf, Cell# 0300-8556454 Mr. Touheed Qaiser, Sr.Manager,Cell# 0300-8616856 8556454 2277555-56,2825558. 8616856 Ph# (051) Yousaf, Cell# 0300-8556454 ROAD SIALKOT 8617856 ISLAMABAD ABOTT Malik Zafar ASSISTANT GENERAL 0300- Mr. Touheed Qaiser, Sr.Manager,Cell# 0300OFFICES MalikOk Sports, Abott Road Zafar Yousaf, Cell# MANAGER Ok Sports, Abott Road Near 3rd Floor Waheed Plaza ,52-W Near ASSISTANT GENERAL MANAGER OFFICES (4032) ROAD PESHAWAR 8616856 262603-64 FAISALABAD 8556454 262603-64 Fax# 262601 (4032) SADDAR KUTCHERY ROAD Fax# 262601 Ph# Avenue , Jinnah Ph# ASSISTANT KUTCHERY Mr. Nadeem Sohail Qureshi, Cell# 0300-8617856 Blue Area. GENERAL MANAGER OFFICES Mr. Nadeem Kutchary Universal Insurance Building, ROAD FAISALABAD Qureshi, Cell# 0300Akbar Road, Sohail Bazar, SADDAR ROAD PESHAWAR Mr. Touheed Qaiser, Sr.Manager,Cell# Bazar, 641977 Fax# 601388 Ph# (051) 2277555-56,2825558. Ph# 632917 ROAD FAISALABAD Saddar Road Akbar Road, Kutchary 0300-8616856 Universal Insurance Building, Saddar Road SADDAR ROAD PESHAWAR 8617856 KUTCHERY ASSISTANT GENERAL 0300- Mr. Touheed Qaiser, Sr.Manager,Cell# 0300Malik Zafar Yousaf, Cell# MANAGER 601388Chaudhry, Cell# 0300-6601228 Peshawar Cantt.Ph# 632917 641977 Fax#OFFICES M Irshad Peshawar Cantt. Universal Insurance Building, Akbar Road, Kutchary Bazar, SADDAR 8556454 ROAD PESHAWAR 8616856 Ph#.091-273789 Fax# 272246Chaudhry,6329170300-6601228 601388 Ph#.091-273789 Fax# 272246 Mr. M Irshad Saddar Road Ph# Cell# 641977 Fax# KUTCHERY GENERAL MANAGER OFFICES Mr. Iftikhar-ud-Din Durrani, ASSISTANT ROAD FAISALABAD M Irshad Chaudhry, Cell# 0300-6601228 Mr. Iftikhar-ud-Din Durrani, Cell# 0333-9106008 Peshawar Cantt. Mr. Universal Insurance Building, Saddar Road Cell# 0333-9106008 272246 Ph#.091-273789 Fax# SADDAR ROAD PESHAWAR KUTCHERY ROAD FAISALABAD Peshawar Cantt.CORPORATE BRANCH OFFICE CIRCULAR ROAD FAISALABAD Mr. Iftikhar-ud-Din Durrani, Universal Insurance Building, Akbar Road, Kutchary Bazar, Ph#.091-273789 Fax# CIRCULAR ROAD 272246 CORPORATE BRANCH OFFICE P-184 Jamal Building, Circular Road. Building, Saddar Road, Cell# 0333-9106008 Saddar Road Universal InsurancePh# 632917 641977 Fax# 601388 Mr. Iftikhar-ud-Din Durrani, Cell# FAISALABADPeshawar Cantt. 0333-9106008 Ph# (041) 643532-623322 Peshawar Cantt. Mr. M Irshad Chaudhry, Cell# 0300-6601228 P-184 Jamal Building, 272246 Fax#. 091-272267BRANCH OFFICE Road, Rana M Shaukat, Cell# 0300-6601228 Ph# 091-273794, Universal Insurance Building, Saddar CIRCULAR ROAD CORPORATE Ph#.091-273789 Fax# Circular Akbar Road, Kutchary Bazar, Road. Akhter, Peshawar Cantt. FAISALABADMr. Durrani, Mr. Iftikhar-ud-Din Javed 601388 Cell#0300-8441828. Ph# 632917 641977 M.Sohail KhanPh# 091-273794, 0300-8476713 Ph# (041) 643532-623322 Mr. Fax# ,Manager, Cell# 0333-9106008 Circular0300-6601228 Insurance Building, Saddar Road, P-184 Jamal Building, Cell# Universal Cell# Fax#. 091-272267 Mr. M Irshad Chaudhry, Rana M Shaukat, Cell# 0300- Khan, Br Manager. Mr. Javed Cantt. Cell#0300-8441828. Mr.Nasrullah Road. Peshawar Akhter, CIRCULAR ROAD FAISALABAD M.Sohail Khan ,Manager, Cell# 03006601228 643532-623322 Mr. Ph# (041) Ph# CIRCULAR ROAD CORPORATE BRANCH OFFICE CORPORATE BRANCH OFFICE 091-273794, Fax#. 091-272267 8476713 Rana M Shaukat, 0300Mr. FAISALABAD Cell#Circular Road. Javed Akhter, Cell#0300-8441828. P-184 Jamal Building, Mr.Nasrullah Khan, ,Manager, Cell# 03006601228 643532-623322 Mr. M.Sohail Khan Br Manager. P-184 Jamal Building, Circular Universal Insurance Building, Saddar Road, Ph# (041) 8476713 Road.M Shaukat, Cell# 0300-6601228 Peshawar Cantt. Rana Mr.Nasrullah Khan, Br 091-272267 Ph# (041) 643532-623322 Ph# 091-273794, Fax#. Manager. Rana M Shaukat, Cell# 0300- Saddar Road, Akhter, Cell#0300-8441828. Mr. Javed Universal Insurance Building, 6601228 Mr. M.Sohail Khan ,Manager, Cell# 0300Peshawar Cantt. 8476713 Ph# 091-273794, Fax#. 091-272267 Mr.Nasrullah Khan, Br Manager. Mr. Javed Akhter, Cell#0300-8441828. Mr. M.Sohail Khan ,Manager, Cell# 0300-8476713 Mr.Nasrullah Khan, Br Manager.
COR POR ATIO N
INFORMATION
26
Board Of Directors
Mr. Raza Kuli Khan Khattak Lt. Gen. (R) Ali Kuli Khan Khattak Mr. Ahmed Kuli Khan Khattak Begum Zeb Gohar Ayub Khan Mrs. Shahnaz Sajjad Ahmed Dr. Shaheen Kuli Khan Khattak Mr. Mushtaq Ahmed Khan F.C.A Ch. Sher Mohammad Mr. Mohammad Kuli Khan Khattak Mr. Sardar Khan Ch. Sher Mohammad Lt. Gen. (R) Ali Kuli Khan Khattak Mr. Mushtaq Ahmed Khan F.C.A
(Chairman)
(Chief Executive)
(Managing Director) (Chairman)
Audit Committee
Chief Operating Officer Chief Financial Officer Company Secretary Mr. Ijaz Ahmed Internal Auditor Mr. Abdul Waheed Chaudhry Auditors M/S. Hameed Chaudhri & Company Chartered Accountants Legal Advisor Mr. Maqsood Hassan Advocate Registered Office Universal Insurance House
27
Mumtaz Centre Queens Road, Ph# (042) 6374533,6373784 Fax# 6374533 63-Shahrah Quaid E-Azam, Madam Gul7353315,Cell# 0300-8556454 Ph# (042) Hassan, 7311608 Fax# 7353315 Mr.Sikandar ShamsherCell# 0300-8441828 Mr. Salman-ul- Haq, Mirza, Regional Manager Cell#. 0300-8474701 ABOTT ROAD SIALKOT ISLAMABAD Near Ok Sports, Abott Road 3rd Floor 262603-64 Fax# 262601 Ph# (4032) Waheed Plaza ,52-W Jinnah Avenue , Blue Area. Mr. Nadeem Sohail Qureshi, Cell# 0300-8617856 Ph# (051) 2277555-56,2825558. Mr. Touheed Qaiser, Sr.Manager,Cell# 0300-8616856 Malik Zafar Yousaf, Cell# 0300-8556454 ASSISTANT GENERAL MANAGER OFFICES ASSISTANT GENERAL MANAGER KUTCHERY ROAD FAISALABAD OFFICES SADDAR Kutchary Bazar, Akbar Road, ROAD PESHAWAR Universal Insurance Building, Saddar Road Ph# 632917 641977 Fax# 601388 Peshawar Cantt. Mr. M Irshad Chaudhry, Cell# 0300-6601228 Ph#.091-273789 Fax# 272246 Mr. Iftikhar-ud-Din Durrani, Cell# 0333-9106008 CORPORATE BRANCH OFFICE Universal Insurance Building, Saddar Road, CIRCULAR ROAD FAISALABAD Peshawar Cantt. P-184 Jamal Building, Circular Road. Ph# 091-273794, Fax#. 091-272267 Ph# (041) 643532-623322 Mr. Javed Akhter, Cell#0300-8441828. Rana M Shaukat, Cell# 0300-6601228 Mr. M.Sohail Khan ,Manager, Cell# 0300-8476713 Mr.Nasrullah Khan, Br Manager. 63-Shahrah Quaid E-Azam, Ph# (042) 7353315, 7311608 Fax# 7353315 Mr. Salman-ul- Haq, Cell# 0300-8441828
63-Shahrah Quaid E-Azam, Mumtaz Centre Queens Road, Ph# (042) 7353315, 7311608 Fax# Mumtaz Centre Queens Road, Ph# (042) 6374533,6373784 7353315 (042) 6374533,6373784 Fax#Fax# 6374533 Ph# 6374533 Mr. Salman-ul- Haq, Cell# Cell# 0300-8556454 Gul Hassan, Cell# Madam Madam Gul Hassan, 03008441828 0300-8556454 Mr.Sikandar Shamsher Mirza, Regional Manager Mr.Sikandar Shamsher Mirza, Cell#. 0300-8474701 Regional Manager ABOTT ROAD SIALKOT Cell#. 0300-8474701 Near Ok Sports, Abott Road ISLAMABAD 262603-64 Fax# 262601 ABOTT ROAD SIALKOT Ph# (4032) 3rd Floor Waheed Plaza ,52-W Jinnah Near Ok Sports, Abott Road Mr. Nadeem Sohail Qureshi, Cell# 0300-8617856 Avenue , Touheed Qaiser, Sr.Manager,Cell# 0300-8616856 Fax# Ph# (4032) 262603-64 Mr. Blue Area. 262601 Ph# (051) 2277555-56,2825558. Mr. Nadeem Sohail Qureshi, Malik Zafar Yousaf, Cell# 0300Cell# 0300-8617856 8556454 Mr. Touheed Qaiser, KUTCHERY ROAD FAISALABAD Sr.Manager,Cell# 0300Akbar Road, Kutchary Bazar, Ph# 632917 641977 Fax# 6013888616856 ASSISTANTIrshad Chaudhry, Cell# 0300-6601228 Mr. M GENERAL MANAGER OFFICES KUTCHERY ROAD FAISALABAD CORPORATE BRANCH OFFICE Universal Insurance Building, Saddar Akbar Road, Kutchary Bazar, Road Universal Insurance Building, Saddar Road, 641977 Fax# Ph# 632917 Peshawar Peshawar Cantt. Cantt. 601388 Ph# 091-273794, Fax#. Ph#.091-273789 Fax# 272246091-272267 M Irshad Chaudhry, Cell# Mr. Mr. Javed Akhter, Cell#0300-8441828. Mr. Iftikhar-ud-Din Durrani, Cell# 0300-6601228 Mr. M.Sohail Khan ,Manager, Cell# 0300-8476713 0333-9106008 Mumtaz Centre Queens Road, Mr.Nasrullah Khan, Br Manager. Ph# (042) 6374533,6373784 Fax# 6374533 CIRCULAR ROAD FAISALABAD CORPORATE BRANCH Madam Gul Hassan, Cell# 0300-8556454 OFFICE Mr.Sikandar Shamsher Mirza, Regional Manager P-184 Cell#. 0300-8474701 Jamal Building, Circular Road. Universal Insurance Building, Ph# (041) 643532-623322 Saddar Road, ABOTT ROAD SIALKOT Rana M Shaukat, Cell# 0300-6601228 Peshawar Cantt. Near Ok Sports, Abott Road Ph# 091-273794, Fax#. 091Ph# (4032) 262603-64 Fax# 262601 272267 Mr. Nadeem Sohail Qureshi, Cell# 0300-8617856 Cell#0300Mr. Javed Akhter, Mr. Touheed Qaiser, Sr.Manager,Cell# 0300-8616856 8441828. Mr. M.Sohail Khan ,Manager, Cell# 0300-8476713 Mr.Nasrullah Khan, Br KUTCHERY ROAD FAISALABAD Manager. Akbar Road, Kutchary Bazar, Ph# 632917 641977 Fax# 601388 Mr. M Irshad Chaudhry, Cell# 0300-6601228 CORPORATE BRANCH OFFICE Universal Insurance Building, Saddar Road, Peshawar Cantt. Ph# 091-273794, Fax#. 091-272267 Mr. Javed Akhter, Cell#0300-8441828. Mr. M.Sohail Khan ,Manager, Cell# 0300-8476713 Mr.Nasrullah Khan, Br Manager. SADDAR ROAD PESHAWAR
ISLAMABAD 3rd Floor Waheed Plaza ,52-W Jinnah Avenue , Blue Area. Ph# (051) 2277555-56,2825558. Malik Zafar Yousaf, Cell# 0300-8556454 ASSISTANT GENERAL MANAGER OFFICES SADDAR ROAD PESHAWAR Universal Insurance Building, Saddar Road Peshawar Cantt. Ph#.091-273789 Fax# 272246 Mr. Iftikhar-ud-Din Durrani, Cell# 0333-9106008 CIRCULAR ROAD FAISALABAD P-184 Jamal Building, Circular Road. Ph# (041) 643532-623322 Rana M Shaukat, Cell# 0300-6601228
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QUALITY POLICY
We, at Universal Insurance Company Limited recognize the importance of satisfying our customer by consistently providing quality insurance services in accordance with their needs and expectations. We strive to be competent partner of our customer against insured perils. We strive to provide our customers cost effective insurance cover by continually increasing the productivity of our employees. To increase productivity, we conduct regular training programs during which employees as assessed and allocated a career path in accordance with their performance. We diligently follow the applicable laws and ensure strict compliance by conducting regular internal audits and educating our employees about the law. We try to improve our services by continually assessing our systems and procedures based on customer and team feedback. We strive to maintain a customer focused approach by ensuring that our service is delivered to customer on time, according to the customer required specifications and with in our stipulated cost.
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63,Shahra-e-Quaid-E-Azam,Lahore. Mr. Imran Ali Khan, Zonal Manager, Cell# 0300-8404354 QUEENS ROAD, LAHORE Mumtaz Centre Queens Road. Ph# (042) 6362277 Fax# 6303558 Mr. Imtiaz A Chaudhry, Zonal Manager, Cell# 0303-7565766 Mr. Manzoor Ahmad, Br Manager, Cell# 0300-4017282 SARGODHA Al-Munir Market, Block 4. Ph# 720913, Fax# 720913 Mr. Manzoor Hussain, Regional Manager. CIRCULAR ROAD FAISALABAD P-184 Jamal Building, Circular Road. Ph# (041) 643532-623322 Rana M Shaukat, Cell# 0300-6601228
ABBOTT ROAD, LAHORE KhursheedPlaza, 2nd Floor, 10Abbott RoadPh#(042)6364420, 6364421, Fax#. 6278917, Haji Ch. M Ameen, Zonal Manager PESHAWAR Universal Insurance Building, Saddar Road, Peshawar Cantt. Ph# (091) 272217, 272001 Fax# 272001 Mr. Barkat Ali Bhatti, Regional Manager.
GM. (DEV) CAMP OFFICE Akbar Road, Kutchary Bazar, Ph# 632917 641977 Fax# 601388 Mr. M Irshad Chaudhry, Cell# 0300-6601228 UNIVERSAL HOUSE BRANCH
<p class="MsoNormal" style="font-size: 12.0pt; font-family: Times New Roman; margin-left: 0in; margin-right: 0in; margin-
30
<p class="MsoNormal" style="font-size: 12.0pt; font-family: Times New Roman; margin-left: 0in; margin-right: 0in; margin63,Shahra-e-Quaid-E-Azam,Lahore. Mr. Imran Ali Khan, Zonal Manager, Cell# 0300-8404354 QUEENS ROAD, LAHORE Mumtaz Centre Queens Road. Ph# (042) 6362277 Fax# 6303558 Mr. Imtiaz A Chaudhry, Zonal Manager, Cell# 0303-7565766 Mr. Manzoor Ahmad, Br Manager, Cell# 0300-4017282 SARGODHA Al-Munir Market, Block 4. Ph# 720913, Fax# 720913 63,Shahra-e-Quaid-E-Azam,Lahore. Mr. Manzoor Hussain, Regional Manager. 0300-8404354 Mr. Imran Ali Khan, Zonal Manager, Cell# CIRCULAR ROAD FAISALABAD QUEENS ROAD, LAHORE P-184 Jamal Building, Circular Road. Mumtaz Centre Queens Road. Ph# (041) 643532-623322 Ph# (042) 6362277 Fax# 6303558 Rana M Shaukat, Cell# 0300-6601228 Mr. Imtiaz A Chaudhry, Zonal Manager, <p class="MsoNormal" style="font-size: Cell# 0303-7565766 Mr. Manzoor Ahmad, Br Times Cell# Roman; 12.0pt; font-family: Manager,New 0300-4017282 ABBOTT ROAD, LAHORE KhursheedPlaza, 2nd Floor, 10Abbott RoadPh#(042)6364420, 6364421, Fax#. 6278917, Haji Ch. M Ameen, Zonal Manager PESHAWAR Universal Insurance Building, Saddar Road, Peshawar Cantt. Ph# (091) 272217, 272001 Fax# 272001 Mr. Barkat Ali Bhatti, Regional Manager.
GM. (DEV) CAMP OFFICE Akbar Road, Kutchary Bazar, ABBOTT ROAD, LAHORE Ph# 632917 641977 Fax# 601388 KhursheedPlaza, 2nd Floor, 10Abbott RoadPh#(042)6364420, Mr. M Irshad Chaudhry, Cell# 0300-6601228 Zonal Manager 6364421, Fax#. 6278917, Haji Ch. M Ameen, UNIVERSAL HOUSE BRANCH PESHAWAR Universal Insurance Building, Saddar Road, Peshawar Cantt. Ph# (091) 272217, 272001 Fax# 272001 Mr. Barkat Ali Bhatti, Regional Manager.
margin-left: 0in; margin-right: 0in; marginSARGODHA Al-Munir Market, Block 4. Ph# 720913, Fax# 720913 Mr. Manzoor Hussain, Regional Manager. CIRCULAR ROAD FAISALABAD P-184 Jamal Building, Circular Road. Ph# (041) 643532-623322 Rana M Shaukat, Cell# 0300-6601228
<p class="MsoNormal" style="font-size: 12.0pt; font-family: Times New Roman; margin-left: 0in; margin-right: 0in; margin-
31
<p class="MsoNormal" style="font-size: 12.0pt; font-family: Times New Roman; margin-left: 0in; margin-right: 0in; margin63-Shahrah Quaid E-Azam, Ph# (042) 7353315, 7311608 Fax# 7353315 Mr. Salman-ul- Haq, Cell# 0300-8441828
ISLAMABAD 3rd Floor Waheed Plaza ,52-W Jinnah Avenue , Blue Area. Ph# (051) 2277555-56,2825558. Malik Zafar Yousaf, Cell# 0300-8556454
INTRODUCTION TO INSURANCE
KUTCHERY ROAD FAISALABAD Akbar Road, Kutchary Bazar, Ph# 632917 641977 Fax# 601388 Mr. M Irshad Chaudhry, Cell# 0300-6601228
Mumtaz Centre Queens Road, Ph# (042) 6374533,6373784 Fax# 6374533 Madam Gul Hassan, Cell# 0300-8556454 Mr.Sikandar Shamsher Mirza, Regional Manager Cell#. 0300-8474701 ABOTT ROAD SIALKOT Near Ok Sports, Abott Road Ph# (4032) 262603-64 Fax# 262601 Mr. Nadeem Sohail Qureshi, Cell# 0300-8617856 Mr. Touheed Qaiser, Sr.Manager,Cell# 0300-8616856
ASSISTANT GENERAL MANAGER OFFICES SADDAR ROAD PESHAWAR Universal Insurance Building, Saddar Road Peshawar Cantt. Ph#.091-273789 Fax# 272246 Mr. Iftikhar-ud-Din Durrani, Cell# 0333-9106008 CIRCULAR ROAD FAISALABAD P-184 Jamal Building, Circular Road. Ph# (041) 643532-623322 Rana M Shaukat, Cell# 0300-6601228
CORPORATE BRANCH OFFICE Universal Insurance Building, Saddar Road, Peshawar Cantt. Ph# 091-273794, Fax#. 091-272267 Mr. Javed Akhter, Cell#0300-8441828. Mr. M.Sohail Khan ,Manager, Cell# 0300-8476713 Mr.Nasrullah Khan, Br Manager.
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Why Insurance?
Insurance has developed in response to the need for protection. There is a natural need for people to protect themselves, their families and their property. Risk and uncertainty are incidental to life and they are governed by chance and probability. All these terms involve the of the unknown, but risk can be calculated mathematically and the cost of misfortune averaged out and this
33
put into cold statistical terms is something which basically affects human life. In order to venture money against the unknown risk, reliable statistical information is required. The risks inherent in any human activity can be of two types:
TYPES OF INSURANCE
PURE
SPECULATI VE
A) PURE:
Pure -that is somethnig outside commercial control.
Pure risk can be dealt with by insurance technique, and can be specially divided in to two parts.
34
Fundamental risks (which are impersonal and affect many i.e. Floods) Particular risks (which arise from an individual event)
B)
SPECULATIVE:
Speculativ- which are risks inherent in commercial dealings.
Insurance began by specializing in a particular field and as the professional expertise grew it expanded. Insurance is the response to a risk and having decided the risk that is being run, that risk can then be transferred to someone else i.e. the insurer. There should still be a positive desire to balance risk prevention and reduction with retention of risk giving financial and social interest. For insurance to be effective its usage must be understood by the public and commercial sectors. Insurance is the transfer or spreading of spreading of a risk from the individual into a pool. The contributions of many will safeguard the few unfortunate. Who will undergo some misfortune in business or in the loss of personal possessions? Insurance then is the fund for commensurate contribution and should provide for the equitable distribution of loss. Insurance encourages the development of new sciences and techniques and is now an integral part of the society we live in and those in government and those governed must understand its role.
35
Origin of insurance
England coffee house-16th century in London, Edward Lied gave 1st concept of insurance by opening caf house in Tower Street, where businessmen used to do business talk. Edward started thinking of casting news. Afterwards he thought of mutual fund in which all businessmen would take part according to their pockets. After Lied, the procedure remained same and the England Govt. protected this profession by which sea insurance came in to being. First of all sea Insurance got growth.
36
England govt. took possession of the place where Edward had made his Caf house. Today there a steel plate is still hanging on which these words are glowing. 1691-1785 Lied coffee house
Now Lied is an Insurance corporation and it is said that it is the biggest corporation of the world and is the shareholder of each insurance company of the world. This company was started in 1688 and it did growth so fast that after 1st century when in 1799 one ship, carrying gold and silver was drowned in the sea, this company paid claim of 10, 00,000 pound. This company suffered a big voyage loss in 1975. An amount of 12 crore and 20 lac was paid due to voyage loss of value of 8, 02,502. In 1906, when earthquake caused fire in San Francisco, this company paid 2.50 crore pound claims. In 1974, Turkish D-C helicopter was destroyed near Paris.Co. paid claim of 10 crore pound.. After Lied, many Insurance companies came in to being out of which each one has its own value.
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BASIC PRINCPLES OF INSURANCE

The object of insurance is to protect oneself against the happening of an event by means of payment of a sum of money into a general pool. Many Strictly speaking there is only one type of insurance for which payment is bound to be made. That is whole life assurance because none of us are immortal and providing the policy is maintained a claim is bound to arise. It has in fact been said that there are only two certainties in life, one is death and the other is
38
income tax and life assurance protects against death and saves one income tax. The other types of insurance will only result in a claim should the events insured against happen. For this reason the terms assurance and insurance should have different meanings the former meaning that the sum assured is bound to be paid eventually. However the term assurance is also applied to mariner insurance and as a result Lloyds use it quite freely as applying to other types of cover.
THE BASIC PRINCPLES

There are four basic OF INSURANCE principles underlying all insurance, naming indemnity, Utmost good faith, insurable interest and the proximate cause.
FOUR BASIC PRINCIPLES
Indemnity
Proximate cause
Utmost good faith
39
Insurabl e interest
1. INDEMNITY:
The intention of insurance is to place insured in the same position following a loss as he occupied immediately before its occurrence. The underwriter does this by: Monetary payment Reinstatement (repair) Replacement The classic definition is contained in a famous legal case, castellain
40
v/s preston-1883-the very foundation in my opinion of every rule which has been applied to insurance law is this, namely that the contained in a marine or fire policy (and similarly in accident policies except personal accident) is a contract of indemnity and of indemnity only and that this contract means that the assured in a case of loss against which the policy has been made shall be fully indemnified but shall never be more than fully indemnified.. That is the fundamental principle of insurance. a) The insured can claim indemnity for material loss sustained only i.e. Sentimental value or consequential loss not included. b) Where damage is partial the insured is entitled to compensation only for the amount of damage sustained. c) Where the insured has been fully indemnified by his underwriter he must transfer to them any rights d) against third parties. This is called subrogation, which will be detailed later. e) The insured is not entitled to recover his loss more than once irrespective of the number of policies he holds. This is the principle of contribution, which will be detailed later.
Modification for the indemnity principle
I. Valued policies
41
The underwriter agrees to pay any need value in the event of the property insured being destroyed by an insured peril. Such policies normally incorporate an inventory and/or valuation of the property requires the note and agreed wording when a client provides a valuation or receipt is an example of this. II. The additional cost of reinstatement of building under local bye-laws and building regulations The erection of a building in its pre-fire form may be impossible owing to local bye law requiring that different materials be used or that the shape or lay-out of the buildings be altered. Such extra cost can be covered provided the policy is appropriately extended and the sum insured increased. Where part only of a building is damaged the additional cost recoverable is restricted to such damaged portions. III. New for old (personal insurances) This goes beyond the principle of indemnity in that no allowance is made for depreciation as a result of wear and tear in the event of a claim. The sum insured must be adequate to allow for replacement of all items at current purchase prices.
Insurance contracts not subject to the role of indemnity
42
Life assurance contracts and personal accident policies do not provide indemnity. It is impossible to place a monetary value of a person life or to put a value on a broken leg or a damaged eye. The only time it is possible to place a value on a persons life is in the case of a debt where for instance an endowment mortgage has been arranged with a building society.
Subject to average
The most common way of calculating premium is to apply to the sum to be insured a rate, which recognizes the degree of hazard. All rates are calculated o the assumption that the premium will be paid on the full amount at risk. Unfortunately, experience shows that net everybody insures for the full amount and so to achieve fairness between one insured and another as to their contributions to the insurance fund policies are often made subject to average. This means that an insured only recovers the full amount of his loss if his sum insured represents the full value of the property at risk at the time the insured peril operates. If the sum insured is less than the full value the insured will be paid in the proportion as set out below. Sum insured Value at the time of loss * amount of loss 1
For instance, if the sum insured under the policy is $80, 000, the Value at risk $100,000 and the loss $20, 000, the calculation is:
43
80,000 100,000
20,000 1
=16000
The insured then becomes his own insurer for the difference between the loss and the amount received i.e. $ 4,000.
Subrogation (an implied condition in all contracts of indemnity)

This is the right of one person to stand in the place of another and to avail him of the rights and remedies of the other. The insured claims from his underwriters and is indemnified, the underwriter taking over or being subrogated to his right against the third party any amounts recovered from the third party become the property of the underwriter who may sue in the name of the insured. Castellain v/s Preston (1883) stated: A person who wishes to recover for and is paid by the insurers as for a total loss cannot take with both hands. If he has a means of diminishing the loss the result of the use of those means belongs to the underwriter. Under common law the insurer has subrogation rights against the party causing damage but can only exercise them after payment of a claim. It is common practice therefore for the subrogation condition in a policy to allow the insurer to exercise his rights in this respect before payment is made.
44
Contribution
The insured can claim only one indemnity irrespective of the number of insurances affected. Generally each insurer contributes a proportion of the amount f the loss. The following rules apply: The policies must cover the same property. The peril must be common to all the policies concerned The named insured must be the same. The policies must he in force at the time of loss.
The common law position

The insured can recover from one insurer who would then have to arrange contribution from others.
2. UTMOST GOOD FAITH
45
This principle requires the full disclosure of all material facts up to the time of the completion of the negotiations of the contract. This is a common law duty and is an implied condition of the contract. This duty is continuous during the currency of the policy usually as a result of a printed condition often called the alteration condition. This doctrine not only applies to the negotiations at inception but is also held to apply at each renewal. Definition of a material fact: One which would influence a prudent underwriter as to whether or not he would accept the risk and if he did accept it, what rate he should charge
i.
Facts which must be disclosed:
Facts, which make the risk greater. Facts suggestive of a special motive for insurance. Facts necessary to explain the exceptional nature of risk without which it is believed to be normal. Facts which show the propose to be abnormal. ii. Facts which need not be disclosed: Facts, which lessen the risk. Facts inferred by underwriters from information provided. Matters of law.
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Public knowledge Known to underwriters in view of the nature of their business Possibility of discovery from information provided to underwriters. Waived by underwriters. Facts not reported by underwriters surveyor after having inspected the risk. iii. Breaches of utmost good faith: Non-disclosure failure to disclose either inadvertently or because not thought to be important. Innocent misrepresentation-inaccurate statements by proposed which he believes to be true. Concealment-deliberate suppression but not amounting to fraud. Fraudulent misrepresentation statements by proposed known to be untrue or made recklessly. iv. Effects of breeches:
In general renders policy void able fraudulence renders policies void because law will not aid fraud. Innocent misrepresentation makes policy void able if it concerns a material fact.
Note:
When a proposal is the basis of the contract the inherent duty becomes a contractual duty and the policy is void able merely by reason of all statement being untrue.
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As stated a breach of utmost good faith renders a policy void but in most contracts if insurance the misrepresentation condition alters this automatic effect by allowing for the insurer to void the policy at his option. v. Underwriters duties:
Not to accept an insurance which underwriter knows is unenforceable at law. Issue policy in unambiguous terms. To make no untrue statements in negotiations.
vi.
warranties and representations:
A warranty is an undertaking by the insured to the underwriter that during the currency of the policy he will or will not do a certain thing or that certain facts are as stated in the policy representation is a statement made by the proposed during the negotiations for insurance cover. Such statements may be included in the policy as warranties. If not incorporated in the policy an inaccurate representation renders the contract void able at the option of the underwriter only of it involves a material.
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THE STATEMENTS OF INSURANCE PRACTICE
THE NON LIFE STATEMENT: This statement is restricted to non-life insurances of policyholders resident in the U.K. and insured in their private capacity only.
PROPOSAL FORMS a) The declaration at the foot of the proposal form should be restricted to completion according to the porpoises knowledge and belief. b) If not included in the declaration, prominently displayed on the proposal form should be a statement: Drawing the attention of the proposed to the consequences of the failure to disclose all material facts, explained as those facts an insurer would regard as likely to influence the acceptance and assessment of the proposal.
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Warning that if the proposed is in any doubt about facts considered material, be should disclose them. a) Those matters which insurers have found generally to be material will be the subjects of clear questions in proposal forms. b) So far as is practicable, insurers will avoid asking question which would require expert knowledge beyond that which the proposed could reasonably be expected to possess or obtain or which would require a value judgment on the part of the proposed. c) Unless the prospectus of the proposal form contains full details of the standard cover offered, and whether or not it contains an outline of that cover, the proposal form shall include a statement that a copy of the policy form is available on request.
d) Unless the completed form or a copy of it has been sent to a policyholder, a copy will be made available when an insurer raises an issue under the proposal form.
CLAIMS:
(a) under the conditions regarding notification of a claim, the policy-holder shall not be asked to do more than report a claim and subsequent developments as soon as reasonably possible except in the case of legal processes and claims which a third party requires the policyholder to notify within a fixed time where immediate advice may be required.
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(b) Except where fraud, deception or negligence is involved, an insurer will not unreasonably repudiate liability to indemnity a policyholder. In the grounds of non-disclosure or misrepresentation of a material fact where knowledge of the fact would not materially have influenced the insurers judgment in the acceptance or assessment of the insurance. On the grounds of a breach of warranty or condition where the circumstances of the loss are unconnected with the breach.
The previous paragraph 2(b) does not apply to marine and aviation policies.
RENEWALS: Renewal notices should contain a warning about the duty of disclosure including the necessity to advise changes affecting the policy which have occurred since the policy inception or last renewal date. Which ever was the later? COMMENCEMENT: Any changes to insurance documents will be made as and when they need to be reprinted, but the statement will apply in the meantime.
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EEC This statement will need reconsideration when the EEC contract law directive is taken into English/Scots law. 4. May 1977. The insurance associations responsible for the non life statement are the British insurance association and Lloyds.
3. INSURABLE INTERES
One of the consequences of the principle indemnity is that the insured can claim to be indemnified only for the loss he sustains. In order to suffer a loss he must have an interest in the property damaged or destroyed .the three conditions essential to support an insurable interest. There must be life, or property or liability capable of being covered. Such life or property or liability must be subject matter of the insurance. The insured must bear some relationship recognized b law to the subject matter whereby he benefits from its safety, or is prejudices by its loss, or can incur a liability therefore.
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The life assurance act 1771 (Gambling Act) states All policies are null and void if the insured has no interest therein. Although this act is relevant to life assurance the principle it states applies to other classes of insurance
Who can insure property?

The owners Husbands and wives Trustees/bailers Mortgagers Bankers Insurance companies There has to be an insurable interest at the time the policy was taken out, but the need for there to be insurable interest during the whole currency of the policy is not a requirement in life assurance so the document becomes a negotiable documents .This means that you can do things with e.g. sell it use for security etc. So under a life policy, insurable interest must exist when it is taken out but the policy can be later assigned to anyone else. With fire and accident policies, insurable interest must exist when the policy is taken out and when the loss occurs.
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With marine cargo policies, insurable interest is necessary at the.
4. PROXIMATE CAUSE
The doctrine of proximate cause is as follows: In the event of a loss, the loss must arise directly from an insured peril, or be the result of a direct chain of events began by an insured peril. A fire or any other loss, may occur as a consequence of a peril which is excluded under a policy and the same principle still applies what was the direct cause has there been a break in the chain. The distinction must be made between the direct cause and the remote cause. A remote cause is where there has been the intervention of a fresh force. The classic definition was given in pawsey &Co v.scottish union and national 1907. Proximate cause means the active efficient cause that sets in motion a train of events which bring about a result without the intervention of a force started and working actively from a new and independent source.
The rules for determining proximate cause

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Fidelity Propert guarante y Some examples from fire insurance are detailed below: Casualt e damage y insurance Nonmarine
If the peril insured and other perils not mentioned in the policy operate together then the perils insured is the proximate cause. CLASSES OF INSURANCE excluded by the If the peril insured and some peril CLASSES OF INSURANCE policy operate together then the excluded peril is the proximate cause. If the loss arises from the operation of a succession of events then the last of these is the proximate cause unless there is a direct chain of events in which the last is merely an incident.
If the proximate cause of the fire which destroyed or damaged the property insured is an excepted peril, the entire loss is regarded as being due to that peril and therefore not covered by an ordinary fire policy, unless the wording specifically provides otherwise.
Engineerin Fire caused by earthquake is an excluded peril. Personal Aviation g insurance accident insurance
Marine Professional indemnity
Malpractice
Motor insuranc e
Contingenc y Personal insuranc e
Constructio 55 n
MARINE INSURANC E
NONMARINE INSURANC E
CLASSES OF INSURANC E
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CLASSES OF INSURANCE
A) Non-Marine Insurance:
Non-marine
The types of business, which fall into the non-marine category, are far too numerous to list in their entirety. However, the following are the major types and give an insight into the variety of risks undertaken.
Property damage: This includes all risks, fire, theft, special perils such as storm, burst pipes and aircraft damage and many others. Consequential loss also known as business interruption, motor and many other types of business, which relate to physical property. Liability or casualty: This relates to the legal liability arising from negligent actions which may cause injury or death to third parties or damage to their property arising out of premises, operations products, motor vehicles elevators, etc. Polices are also effected covering
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the Assureds liability to their employees. In the American field policies are issued to cover the Securities Exchange Commission Liability and in the U.S.A and Canada a considerable number of Directors and Officers liability insurances are arranged.
Fidelity Guarantee Insurance:
In the commercial world this proved an indemnity to the Insured (the employer) in respect of their direct financial loss arising cut of the fraud or dishonesty of employees. Insurers liability is usually limited to a specified amount in respect of all losses. Premiums are based on a combination of a rate per cent on the amount insured and per capital charge on the number of employees in various categories which rate/charge varies according to the business. Polices are issued covering all employees but cover can be effected just for specified employees or positions. Personal Accident Insurance: This may be affected for an individual or a group of individuals on the basis as detailed on the next page. Compensation to the insured in the event of accidental bodily injury to an Insured Person resulting in: 1) Death 2) Loss if Limbs of eyes 3) Permanent total disablement from Usual/any occupation
) ) )
A lump sum
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4)(a) Temporary total disablement from usual occupation (b) Temporary partial disablement from usual occupation 5) Medical expenses
)A weekly ) benefit payable )for 104 weeks. ) ) ) Up to 15% of ) benefit ) Paid under 4.
The actual benefits insured, i.e. Death etc. can be selected as can the sums insured but since a PA policy is not one of indemnity the weekly benefit, 4 above, is dept in line with the weekly earnings of the Insured Person. The policy usually excludes, inter alias drugs alcohol, insanity, war and exceptional risks. Premiums are calculated at a rate on the sum insured according to benefits required and occupation.
Sometimes a policy is extended to provide a weekly benefit for sickness. Professional Indemnity: This provides protection for those engaged in a number of professions against sums for which they may be held liable as a result of some negligence in carrying out their work. Examples of the types of professions covered are lawyers, accountants, solicitors, surveyors, consulting engineers etc.
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Malpractice: This is similar to a professional indemnity but is normally used for the medical or allied professions. Insurances are affected for hospitals, doctors, nurses, dentists, chemists, morticians etc., etc. Engineering Insurances: Under this heading come boiler and machinery policies which cover three aspects of insurance in connection with boilers, machinery, turbines and the like. They cover the direct damage (excluding fire) to the machinery it self. damage to the assure is own surrounding property caused by boiler or machinery explosion and liability to third parties arising out of the use of the boilers, machinery etc.it is interesting to note that a large part of the boiler and machinery insurance premiums apply to the engineering and inspection costs since it is usual for companies who undertake this type of insurance to maintain very high quality of inspection and engineering services. By these means the actual claims are reduced to a minimum. In this country a properly qualified insurance engineers report will be accepted in many cases as complying with the requirements of the factories act. Engineering insurance includes a wide variety of equipment in addition to those mentioned. Such as cranes. Hoists and lift, and electrical and mechanical plant. Motor Insurance: You will see from the notes on property liability and personal insurances that this class of insurance belongs in all three. The reason is that motor insurance can combine in one policy liability cover, damage cover and even a limited form of personal accident cover. It is because of its importance in providing cover as required by law. The road traffic acts, and
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the sheer volume of business in terms of premium income and the diversity of vehicles that can be covered that it stands as a class in its own right. Corning within its bounds are not only private cars, motorcycles and scooters but lorries, coaches, buses, special types of mobile equipment like diggers, excavators, bulldozers, cranes, and farming vehicles such as tractors and combine harvesters. Premiums for personal risks such as private cars, motorcycles and scooters are based on the age and experience of the drivers, the type of vehicle and the area in which it is used. A discount called the no claim bonus is given for each accident free period of insurance and increases each year up to a maximum.
For instance first years discount 30%, second 40%, third 50%, fourth and maximum 65%. The no claim bonus is a special feature of personal motor insurance. Premiums for commercial vehicles such as lorries, vans etc. Are also rated in the same way as personal risks described above but if a company or firm own a large number they are insured under what is known as a fleet policy individual rating is dispensed with and the total experience of the fleet in relation to premiums and claims and the number of vehicles owned sets the premiums and terms charged by the insurer. Personal insurances: Included under this heading are house owners and householders policies, which relate to the building of the private residence and its contents. All risks insurance in respect of valuables such as jewellery,sports,equipment,cameras,furs and other personal
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possessions, travel and holiday insurance, personal accident and sickness insurance, motor insurance in respect of private cars, motorcycles and scooters. Contingency/miscellaneous: Examples of contingency insurance are twin insurance administration guarantees, restrictive covenant indemnities and there are many more. Under the heading of miscellaneous insurance come cash in transit insurance, livestock insurance and new developments such as legal expenses insurances. Marine: In principle this class of insurance may be divided into two, Direct Damage and Liability. direct damage insurance may
cover the hulls of ships and cargo and it also includes protection for sue and labor charges, salvage charges and general average contributions. On the liability side it affords what is known as Protection and indemnity for ship owners and which may include running down liability. Sometimes a ship is chartered and the chartered liability will also be covered. Insurances are also effected to cover liability to the crew (similar to an employers liability policy in the nonmarine class) and liability in connection with bills of lading which are the customary documents based when cargo is being forwarded. Marine insurance is the oldest type of insurance conducted at Lloyds. cover for oil rigs is important new aspects of the insurance market in which both marine and construction underwriters have special interests.
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B) Marine Insurance:
Marine
Aviation: This is really divided into three main groups, direct damage, liability and personal accident. The direct damage covers the hull, cargo and baggage whereas the liability may arise out of the aircraft itself or the airport, products liability (e.g. restaurant, or in connection with the manufacture of aircraft or their parts) and liability to passengers traveling on the aircraft are also included.
Personal accident insurance may be affected for passengers or crew and in addition a loss of license insurance bay be effected which will protect flying personnel against withdrawal of their license due to ill health. Construction: With the increase in building and the rise in building costs this class of insurance has grown by leaps and bounds over the last few years. The direct damage policies cover the property incourse of construction and it is also possible to cover some contractors plant and equipment, most plant and equipment however is only used for the duration of a particular contract and is not insured.
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Construction liability policies covers and liability of the contractor (and the principal jointly if required) to third parties and employers liability.
SECTION 2
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DEPARTMENTS
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DEPARTMENTS AT UIC
Fire Insurance Department
Marine Insurance Department
Motor Insurance Department
Audit Department
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Reinsurance Department
FIRE INSURANCE DEPARTMENT
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WHAT IS FIRE INSURANCE?

The contract of fire insurance bears a resemblance to all other contracts of insurance; it is in fact an offshoot of the contract of marine insurance. It is not a game of chance as some ignorant people think. In insurance business, the losses of few are borne by the insuring public. The premium paid by those who insure form a fund, or a pool, out of which the unfortunate persons who suffer losses are compensated. Part of the pool money goes towards the management of the insurance company and part to the
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profits of their shareholders, of course after maintaining reserves for unexpectedly high losses, which may arise at any time. The premiums are calculated on the laws of averages, which operate best on larger numbers. Therefore, the insurers spread their risk by way of having co-insurers as well as reinsures. In 1666, a fire occurred in London, which destroyed the city. There were schemes of fire insurance even prior to 1666 but after this fire, much interest arose in fire insurance. Hand in Hand in 1666 and Sun Fire Office in 1710 are among some companies, which followed a builder Nicholas Barbon who launched a fire insurance scheme. In Indo-Pak sub continent, the insurance was introduced after the occupation by the British whose companies started operating here. In 1938 a law was made to regulate the function of insurance business in the sub-continent. The said law came to be known as insurance Act 1938, which was later, adopted by Pakistan in 1947 and amended from time to time.
The contract of fire insurance

The agreement between the two parties, the insurers and the insured, is forth in a policy of fire insurance. This may be defined as an evidence of a contract whereby the insurers in return for a consideration, known as premium, undertake to indemnify the insured against financial loss which he may sustain by reason of certain defined property, known as the property insured, being damaged or destroyed by fire or other perils within a stated period, the liability of insurers being limited to a specified amount, called the sum insured.
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Fire insurance, right from its birth is transacted by word of mouth. It is not compulsory to obtain a proposal form duly filled and signed by the insured. However, prudent insurers should, for larger risks, obtain proposal in writing and also inspect the property before accepting the risk. On receiving the proposal form the insured, verbally or in writing the insurers after due consideration issue a document known as cover note for a short period, generally 30 days, during which time the insured stands covered by the insurers but the insurers have the right to either refuse or accept the risk finally. When finally accepted, a policy is issued. The cover mentions the name of the proposed, brief details of property insured and the total amount of insurance. It is also stated on the cover note that it is subject to the printed terms conditions of insurers usual standard fire policy form. It must be remembered that issue of cover note does not signify final acceptance of the insurance. Sum insured: The total sum insured is the insurers maximum liability under the policy. If the policy contains two or more item, the liability of insurers under each item does not exceed the sum insured of such item. Each sum insured is a separate insurance. The sum insured is neither an admission by the insurers of the value of the property nor is it the amount, which they promise to pay in the event of loss, unless there is in the policy a stipulation to these effects. Such policies are called valued policies. In Pakistan such fire policies are not issued. It is insureds responsibility to fix the sum insured, which should represent the full value of the property covered. When
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the insurers pay a claim the sums insured of the items of the policy affected, are reduced by the amounts paid. The sum or sums insured can be reinstated by endorsement, which will provide for the payment of a pro rata extra premium from the date when such reinstatement is required until the next renewal or expiry date.
Commencement & expiry: The policy provides that the property shall be held insured for a specified term. In Pakistan policies are allowed to be issued for a period up to one year but shorter periods are also covered for seasonal industries and trades. The insurers usually specify that the risk commences at 10 am on a particular date and expires at 4 pm on another date. If no time is mentioned, it covers from zero hour of the date of commencement to the midnight of the expiry date. Cancellation: If the insurable interest is changed or risk is altered, the insurers can refuse to continue the insurance. Although legally neither the insureds nor the insurers, are otherwise entitled to cancel the policy. However, it is customary to accept the cancellation by the insureds and refund the premium after deducting short period rate. If the insurers cancel for their own reason they give a notice and then refund premium on pro rata basis.
Policy wordings:
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All policies on buildings and/or contents contain the following: I. Construction of building i.e. the materials used in the construction of walls, roofs and floors. II. Number of stories including basement and attic or loft. III. Precise occupation of each section of the building including description of the contents of the building and of processes carried therein. IV. Nature of communication with adjoining buildings. If the partition wall between two adjoining compartments is not a perfect party wall this fact is stated. V. Policies covering both building and contents show separate amounts on: Buildings Machinery and accessories. Stocks and stocks in process. VI. All tariff warranties applicable are inserted in all policies issued under the tariff.
VII. A warranty that when so authorized by the insurance association of Pakistan the officials of that association shall have access at any time to the risk and/or the premises. Partial insurance:
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Subject to the under noted exceptions it is not permissible to issue a policy covering only: I. Certain portions of a building II. Specified machine, parts of machines or accessories thereof. The exceptions are: III. The plinth and/or foundations of a building may be (not must be) excluded. IV. Individual sections separated from the remainder of the building by perfect party walls may be excluded. V. Engines and boilers are excluded from machinery cover. VI. Where portions of a building not separated by perfect party walls and/or machinery therein are in different ownership the above rules do not apply and it is permissible by I.A.P. for each owner to insure separately but to the full extent of his interest. In such cases the insureds interest must be clearly defined in the policy. Valued policies and contract price clause: A policy in which the value is admitted is not permissible by I.A.P., nor any policies covering stocks providing for payment to an insured of any amount in excess of the market value immediately anterior to the fire but in the case of insurances of wholesale merchants where goods are sold under a contract which is cancelled either wholly or to the extent of the loss or damage it is permissible in respect of imported goods only and
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not for goods produced in this country to issue a policy on the basis of the contract price. In such circumstances the following clause is used. It is hereby agreed and declared that in respect only of goods sold but not delivered for which the insured is responsible and with regard to which under the conditions of sale the sale contract is by reason of the fire, cancelled either wholly or to extent of the loss of damage the liability of the company shall be based on the contract price and for the purpose of average the value of all goods to which the clause would in the event of loss or damage be applicable shall be ascertained on the same basis. Perfect party wall: A perfect party wall is a solid wall of concrete and/or stone and/or burnt brick properly bonded in cement lime or mortar not less than 13 inches (33 cm) in thickness at any part and carried through and at least 18 inches (45 cm) above the roof having no openings therein except such as are protected by double fireproof doors and/or shutters or such as are used for shafts straps and steam gas or water pipes these openings not being of more than sufficient size for the purpose and in nor case exceeding 4 square feet in area. Any openings in perfect party walls for air conditioning ducts and ventilation door to be protected by double iron or steel shutters not less the (6mm) in thickness arranged to close automatically in the event of fire.
MARINE INSURANCE DEPARTMENT

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HISTORY OF MARINE INSURANCE

Since earliest times man has been fascinate by sea travel and preoccupied with thoughts of air travel. It is not unusual therefore that mans first attempt at seeking protection was from the danger posed by the sea. Historians have uncovered
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evidence suggesting that some sharing of losses did exist among seafarers as early as the ninth century BC.
MARINE INSURANCE DEVELOPMENT

Lloyds is probably the most famous insurance market in the world being the center for the worlds marine insurance and shipping intelligence. In the 17th century insurance of ships and cargoes was often underwritten by merchants who were willing to carry part of the risk of a voyage for part of the premium. Commerce of various types was transacted among the merchants who met each other in the various coffee houses around the city of London. Similarly those wishing to transact insurance would meet in these coffee houses. One of them owned by one Edward Lloyd was situated near the river Thames and was frequented by merchants ship owners and others having an interest in maritime ventures.
Lloyds Coffee House was situated in Tower Street and was in existence in 1688, although the original date of opening is uncertain. Edward Lloyd encouraged the merchants or underwriters (they signed their names at the foot of the insurance contracts) because it brought extra business to his Coffee House. He supplied shipping information and published a newssheet in 1996, called Lloyds News. Lloyds List superseded this some years after his death, which is Londons oldest newspaper.
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MARINE INSURANCE ACT 1906

The case law that was being accumulated over the years (some 2000cases) was incorporated in the marine insurance Act of 1906 when the law relating to marine insurance was codified i.e. brought together in one statute. The Act forms the bases for the operation of marine insurance to this day and knowledge of its terms is essential to anyone embarking upon a career in marine insurance its value goes beyond the boundary of marine insurance as it is the only code of commercial insurance. Its value goes beyond the boundary of marine insurance as it is the only code of commercial insurance on the statute book and for that reason is of considerable importance in its own right.
MARINE INSURANCE GENERAL PRACTICE
Insurance had originated from maritime trading. It can be dated back to Greeks who were used to certain types of risk sharing, in their maritime activities, both on ship as well as on the cargo. With the gradual development of society the concept of Risk Sharing or Risk Distributing was further advanced till it
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became what we see it today an integral part of the present day economic system both in capitalist as well as totalitarian states. Insurance, and more especially marine insurance, provides a very important leverage to the trade and industry by indemnifying the insured against those losses, which are not due to any trade risks. Now a-days the value of hull and cargo has grown so enormously that loss of a single ship may cripple many business houses. Here, marine insurance takes the burnt of the entire risk and gives the trade and industry the required protection against maritime losses which, we would presently see, now extends to many perils which are, strictly to say, not maritime in nature.
ROUTINE PROCEDURES
We are all aware of the routine procedure in the marine department of any company but attention is particularly drawn to the differences between Brokers System in England and Agency System here. Brokers and intermediaries are listed with Lloyds. They place business on behalf of the proposed by means of inserting necessary details in a slop on which underwriters record their commitment. The slip is passed on from one underwriter to the other until the declared amount is fully covered. The
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agents on the other hand are normally appointed by the insurers for procurement of business against commission. As to whether they are the agents of the insurers or the assured depends on the facts of each case by reference to the party they present at a given point of time in the process of negotiation. In Pakistan a marine cover is normally initiated with a phone call to the marine department where the personnel concerned take the necessary particulars and issue cover note. Normally, in respect of import risks cover note is followed by shipment(s) and declaration(s) thereof, mostly exhausting the sum insured. On receipt of the shipment declaration from the insured and/or his principal abroad a policy is issued. Thus the underwriting is complete. Of course in exports sometime the policy is directly issued.
Here we must mention one very important factor involving Pakistan insurance law. As per insurance Act 1938, the insurer in Pakistan cannot assume an insurance risk without receipt of premium. According to the Act in no case may marine provisional covers be issued without the receipt of a deposit premium or unless there is adequate bank guarantee in force. Only exception allowed is bank guarantee sufficient to cover the premium but the premium must be paid by the end of the month following the one in which the risk had attached.
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OPEN COVER
In big business where frequent shipments are made it would be impractical to go on issuing cover note for every shipment. Therefore, an open cover note is issued stating, in general term, the merchandises involved, ports of shipment and destination, warranties etc. premium rates are normally shown as per Tariff. Some of the essential features may be noted. The insured agrees to declare and insurer agrees to accept all declarations.
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All shipments of the type mentioned in the cover note must be declared. Limit per bottom (vessel) may be applied. By location clause the underwriters liability is limited to be the specific sum at any one place at any one time. By classification clause, a restriction is imposed for shipment to be made only by the vessel of not more than certain age and with certain standard classification. Ships falling outside the scope may be held covered at additional premium to be arranged. By valuation clause the manner in which the value of the goods may be arrived at is laid down.
Floating policies
They are similar to open cover in nature but being stamped policies, they are enforceable at law. Both open cover notes and floating policies are issued for one year.
Marine Hull
Pakistan has very significant hull market, which is insured with the national insurance company. The rates, and terms
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and conditions are all controlled by London, which is the hub of the international hull market. As a routine, rates are obtained through brokers in London who in turn obtain it from one of the Lloyds syndicates. The leader quotes the rate and specifies the percentage he intends to take. Others follow the rate and specify only the percentage. The brokers inform the terms and rate to his principal in Pakistan who quoted the rate to ship owners or charter of the ship. The insured has no choice in the matter and he has got to insure on terms obtained for him by his insurers through the brokers.
ROLE PLAYED BY MARINE INSURANCE IN INTERNATIONAL TRADE
Marine insurance occupies a small, but important position in overseas commerce. Since it affords protection against fortuitous losses, it enables all those engaged in overseas trade to venture their capital more freely than would otherwise be possible, and thus greatly to expand the
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scope of their operations. It is also an important invisible export in the overseas trade of Great Britain. The banks are largely responsible for financing the overseas trade of the world. The usual method is for the buyer to forward to the seller of goods a letter of credit drawn on a banking house. This is not negotiable, it being merely an authority from the banker who signs it to the banker or other person to whom it is addressed to honor the draft of person named in it on production of whatever documents may be required. The draft is usually in the form of a bill of exchange against the value of each shipment. Provided it is accompanied by the other documents of title to the goods, the bank will be prepared to discount the bill. The seller is, therefore, put in funds immediately, instead of waiting until he receive a remittance from his customer abroad for the goods shipped, and he is able to use his capital instead of having it locked up in goods in transit.
THE DOCUMENTS OF TITLE ARE
1.The Bill of Exchange: is the draft or order drawn by the seller on the buyer, requiring the later to pay stated sum on sight, or at a definite number of days after sight or presentation of the draft and the necessary documents, to the person named r his order.
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2.The Bill of Lading: This evidences the contract of freight between ship-owner and shipper of the goods, and is a receipt for the goods given by the carrier to the shipper. 3.The Export invoice: The invoice shows the quantity, quality and price of the goods. 4.The Marine Policy: The importance of marine insurance in the credit system is such that the bank will not discount the bill of exchange unless the goods (as specified in the letter of credit) are insured against marine risks (including war risks generally ),and the policy lodged with the bank as collateral security. The documents are forwarded to the banks branch or agent at destination, taken up by the buyer who can then collect his goods from the ship against the bill of lading, even if they are damaged, claiming on the insurers for such damage, if recoverable under the policy. Marine insurance, therefore, is essential to overseas commerce, and although there is no legal compulsion on a merchant to insure his goods, the bank insists on it. Apart from this reason and where a bank does not finance shipments, common prudence calls for marine insurance protection, particularly as its cost is but a fraction of the market value of the goods.
INTERNATIONAL MARINE INSURANCE MARKET
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Most maritime countries have some marine insurance facilities. The extent, nature and capacity of these markets naturally vary considerably. Whilst major international markets exist in the United Kingdom, the U.S.A., and Japan and on the continent of Europe, many other countries cater almost exclusively for their own nationals and usually depend on the reinsurance facilities available in the international markets to generate the desired capacity. The components of the international market are in direct competition with each other for both direct insurance and reinsurance on a Worldwide basis. On e the other hand a number of countries require their nationals to insure within the country and the Insurers there do not cater for direct insurances from outside their country- they do, however, usually seek to participate in reinsurances from other countries often by means of recipro9cal reinsurance treaties. It is not within the scope of this course to trace the history of Lloyds or that of the market generally but some details of its present-day components and the organizations supporting the underwriting concerns must be included so that the essential differences between Lloyds and the insurance companies may be understood and its effects appreciated.
Lloyds
Lloyds as a corporation provides all facilities enabling its members to transact on their own
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account insurance business of al kinds. The underwriting members, for convenience and to offer consolidated facilities, form themselves into syndicates of varying sizes. Each syndicate has an appointed underwriter so that the members of the syndicate usually take no active part in the business. References to Lloyds underwriters are in relation to such appointed underwriters who transact business, on behalf of their syndicates, in the room at Lloyds. Each underwriting member of Lloyds transacts business on his own behalf and is legally liable in respect of his engagements under Lloyds policies to the full extent of his means. Membership of a syndicate does not relieve him of any share of these liabilities; neither does he assume any responsibility for his fellow members. Otherwise stated his liability is several and unlimited. The committee elects underwriting members only after the strictest examination of their financial position. Each member, on his election, has to committee in its discretion may think fit to require. These securities remain in the custody of the committee until the whole of the members liabilities have been discharged. Lloyds Agents: Lloyds in practically every port throughout the world appoints Lloyds agents. They are not underwriting agents. They are at the service of all underwriters, and not only of Lloyds underwriters. It is their duty to assist the master of any ship in distress, thereby protecting the interests of the
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underwriters insuring shop and cargo. They may appoint officials to survey damage to ship or cargo and issue certificates of survey. Their sole remuneration is the fees charged for such services. Naturally, one of their important duties is to transmit promptly and regularly to Lloyds all kind of settle claims, for which they are entitled to charge a settling fee, according to an agreed scale. Companies: The companies transact their business on a system which closely follows that adopted by Lloyds underwriters, although in a few cases I there syndication of company marine underwriting. In fact, the procedures of effecting insurance with Lloyds and the companies are exactly the same and both kinds of underwriters will be found on the same slip. The only difference is that the company underwriter is the salaried official of a limited liability company. Thus, whereas the liability of an underwriting member of Lloyds is several and unlimited and that of a company is limited to the capital of the company. However, the accumulated funds of the large composite insurance companies are so great that in practice the security of the companies is equally as sound as that of Lloyds. Most of the British insurance companies now have marine departments. There are very few purely marine companies, and those that exist are subsidiaries of powerful composite companies.
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MARKET CO-OPERATION
Although marine insurance is conducted on keenly competitive lines, and apart from war risk insurance, tariffs are virtually non-existent; there is considerable cooperation between Lloyds and the companies. Where the general welfare of their business is concerned they closely cooperate. There are several joint committees, e.g., the Joint Hull Committee, the joint Cargo Committee, and the war risk rating committee. In normal conditions hull premiums are regulated according to the ship owners claims experience over a period of years, and tare influenced by various understanding of the joint hull committee. The institute clauses, drafted by a joint committee (the technical and clauses committee) and issued by the institute of London underwriters are used worldwide. A further example of cooperation is that, as previously indicated, all the services of Lloyds are freely available to the insurance companies, which subscribe to Lloyds.
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ACCIDENT & MISCELLANEOUS INSURANCE DEPARTMENT
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Accident & Miscellaneous Insurances
Basic Study in Accident Insurance Apart from the usual insurance of Fire, Marine and Motor and their ancillary covers all types of other insurances come under the Accident Department. It Accident Department offers far wider range of insurances and any new cover introduced is also generally included in Accident Department. An outline of the important covers underwritten in the Accident Department is being given hereunder: 1. BURGELERY INSURANCE:
(i)
Burglary Insurance: This type of cover provides protection against loss of stock and/or household goods as well as valuables by burglary during night or day. Normally loss of ordinary theft or larceny is not included in the cover. Similarly, in policies for residential premises theft by servant is also generally excluded.
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(ii)
Cash-in-Safe and Cash-in-Transit insuances: 2. Cash-in-Safe and Cash-in-Transit insurances: This type of insurances cover transit of cash from bank to office of the insured and vice versa as well as cash kept in the safe. The cash-in-transit policy covers loss by hold-up of the person carrying cash by robbers. In the cash-in-safe insurance loss of cash as a result of breaking of the safe is covered.
(iii)
Personal Accident Policy:
3. Personal Accident Policy: This policy covers death or injury as a result of an accident caused by forcible and external means to the person insured. There are various covers providing different scales of compensation and the premium is charged as per the benefits covered.
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(iv)
Aviation Personal Accident Insurance: 4. Aviation Personal Accident Insurance: This policy covers injury and/or death while the person insured is traveling as a fare-paying passenger in an aircraft carrier operated by an airline on designated routes.
(v)
Fidelity Guarantee Insurance: 5. Fidelity Guarantee Insurance: This policy is meant to cover the fidelity of employees. As per the usual terms of this cover fraud, misappropriation or defalcation or dishonesty committed by the employee during service and discovered either during his employment or within six months after his death, dismissal or retirement or expiry of the policy is covered.
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(vi)
Engineering Insurance: 6. Engineering Insurance: This class of insurance is a recent addition to the Accident Department and includes specialized covers like Contractors All Risks, Machinery Breakdown, Erection All Risks, Boiler Explosion insurances etc. As is apparent these covers are basically designed for Industrial Risks. In addition to the above more common covers, as already stated, Accident Department offers numerous other types of covers like Guarantee business, Professional indemnities, Aviation Insurance, Public Liability Insurance, Plate-glass insurance etc.
MOTOR INSURANCE
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Need for Motor Insurance
It is no exaggeration to say that it is Motor Insurance that has made motoring possible whether for business or pleasure for the majority of those who own It is no exaggeration to say that it is Motor Insurance that has made motoring possible whether for business or pleasure for the majority of those who own motor vehicles. The average number of the community could
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not otherwise afford to incur the tremendous risks involved in the use of motor vehicles both in terms of third party liabilities and damage to the vehicles themselves. Mandatory error might mean monetary ruin. It is quite certain that if motor insurance facilities were withdrawn, relatively, few owners of motor vehicles would like to venture out with their vehicles and run the attendant risk of causing injury to others or damage to their property. More insurance performs a substantial service to the community by the resolving of third party risks and compensating for damage to vehicles, not to speak of several additional benefits that may be availed of under insurance policy. Another notable function of Motor insurance is that it renders possible the financing of motor vehicle purchases on deferred payment terms. In these days when credit arrangements in respect of purchases have come to be accepted as normal, insurance provision is a necessary corollary.
In Pakistan, as in certain other countries, the insurance of mechanically propelled vehicles, upto a certain extent, by their owners has been made compulsA In Pakistan, as in certain other countries, the insurance of mechanically propelled vehicles, up to a certain extent, by their owners has been made compulsory by legislation. A certain volume of motor business is thus generated automatically in these countries.
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The relevant statute in Pakistan is the Motor Vehicles Act, 1939, and the compulsory insurance provisions mainly require the insurance of liability in respect of personal injuries and death suffered by third parties in accidents arising out of the use of the vehicles, before the vehicles can be licensed for road use. Whilst the Act was passed in 1939 its compulsory insurance provisions came into force as late as 1st July 1946.
Classification of Vehicles
For purposes of insurance, motor vehicles are divided into the following three categories, the criterion being the use to which a vehicle is put and not the shape, size, color, type of body, or any such other feature: For purposes of insurance, motor vehicles are divided into the following three categories, the criterion being the use to which a vehicle is put and no For purposes of insurance, motor vehicles are divided into the following three categories, the criterion being the use to which a vehicle is put and not the (1) Private Cars. (2) Motor Cycles and (3) Commercial vehicles.
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Private Cars: A private car is a motor vehicle, which is used solely for the business of the owner, excluding the carriage of goods, and for social, domestic, professional o A doctor may use a car or station wagon for professional visits or social purposes. He may take his family on a picnic or travel; the vehicle is yet classed as a Private Car. Motor Cycle: A motorcycle may be used for any of the purposes remitted in respect of a Private Car including trade purposes. A motor cycle may be used for any of the purposes remitted in respect of a Private Car including trade purposes Commercial Vehicles: As for Commercial Vehicles the category comprises all vehicles, which are neither Private Cars nor cycles as defined already and as such abounds in variety. They may be: As for Commercial Vehicles the category comprises all vehicles, which are neither Private Cars nor cycles as defined already and as such abounds in varie (i) Private goods carrying vehicles or private carriers for carrying owners own goods; (ii) (iii) buses and taxis;
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Public goods carrying vehicles or public carriers for carrying goods for hire or reward; Passenger carrying vehicles such as
(iv) (v)
Agricultural tractors; and Miscellaneous vehicles such as ambulances, postal vans, refuge carts, water carriers, road rollers, airline buses, school buses, hearses with or without trailer combinations.
The classification of vehicles is primarily made by the Registration Authorities, the class of permit granted by who is decisive as to the use to which its owner may put the vehicles.
Motor Vehicles Act, 1939

Before we turn to the consideration of the scope of different types of motor insurance policies it is necessary to state the substance of the compulsory insurance provisions of the Motor Vehicles Act, 1939 and is done below: The owner of a motor vehicle shall not use it or cause or allow any other person to use it in a public place unless there is in force a policy of insurance in re (a) Before we turn to the consideration of the scope of different types of motor insurance policies it is necessary to state the substance of the compulsory The policy must insure the owner and persons using the vehicle with the knowledge and consent of or at the behest of the owner, against any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle in a public place. However, liability to employees arising out of any in the course of employment need not be covered except in the case of employees engaged in the
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operation and maintenance of vehicles such as drivers, cleaners, conductors and ticket examiners, and in the case of goods vehicles, those being carried in the vehicle not exceeding six (6) in number, and only so far as the liability arising under the Workmens Compensation Act, 1923 is concerned. Again, except in the case of vehicles used for carrying passengers for hire or reward or by reason of or in pursuance of a contract of employment, liability to passengers need not be covered. Lastly, contractual liabilities are not required to be covered. (b) The policy must cover any liability of the kind defined in the preceding section (viz. death or bodily injury to third parties) and incurred in respect of any one accident up to the following limits:-
(i)
In the case of goods and passenger carrying
vehicles Rs.20,000/=.
(ii)
In the case of vehicles in which
passengers are carried for hire or reward, liability in respect of passengers must be covered up to Rs.20,000/= in all, and Rs.4,000/= in respect of an individual passenger if the vehicle is registered to carry not more than fix passengers (excluding the driver), or Rs.2,000/= in respect of an individual passenger if the vehicle is registered to carry more than six passengers (excluding the driver).
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(iii) In other cases the liability incurred must be covered regardless of amount.
Scope of Motor Policy

Three policies are available in respect of each class of vehicles viz. (i) Act policy, (ii) Third Party policy, and (iii) Comprehensive policy.
The Act Policy:

As its name suggests the Act Policy is a policy which provides the insurance made compulsory under the Motor Vehicles Act, 1939. The nature and extent of the cover under the Act Policy are therefore clear from the relevant provisions of the said Act stated earlier and need not be repeated here. Note must;
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however, be made of a special duty imposed by the Act on the insurers. The duty is to satisfy judgments against persons insured in respect of Act liability notwithstanding that the insurer may be entitled to avoid the policy on ground of nonfulfillment of policy terms and conditions, and to pay to the person entitled to the benefit of the decree any sum up to the limit covered by the policy together with costs and interest payable, if any. The insurer, however, enjoys the right to be notified of the institution of proceedings and be made a party thereto to defend the action of any on the following grounds: (a) That the policy was cancelled by mutual consent or by virtue of any provision contained therein before the accident, giving rise to the liability and that the certificate of insurance was invalidated. That there has been a breach of a policy condition relating to the use of the vehicle or the class of persons entitled to drive or exclude perils such as war, riot and civil commotion. That the policy is void on account of a breach of the duty of Utmost Good Faith.
(b)
(c)
(The insurer cannot rely on any policy condition other than those mentioned in (b) above to repudiate a claim). However, any sum paid by the insurer towards the discharge of any liability of any person which is covered by the policy solely by virtue of the special duty shall be recoverable by the Insurer from that person subject to the limit of liability the policy also pays claimants costs and expenses which the insured becomes legally liable to pay and all costs and expenses incurred by the Insured with the Companys written consent.
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The policy contains wording to the effect that the extension of indemnity to any driver driving the vehicle on the Insureds order or with his permission becomes ineffective if such driver is entitled to indemnity under any other policy. A recent court decision has however, nullified the wording if such driver is entitled to any indemnity under any other policy. In the event of any accident involving indemnity to more than one person the limit of liability applies to the aggregate amount of indemnity but is so applied as to accord the insured priority in indemnification. The geographical limits applicable to the cover is whole of Pakistan.
Third Party Policy:

As a consequence of an accident to his vehicle a motorist may incur liabilities in two directions, firstly in respect of injuries or death caused to third parties
As a consequence of an accident to his vehicle a motorist may incur liabilities in two directions, firstly in respect of injuries or death caused to third parties and secondly damage caused to
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property belonging to third parties. Whilst the Act Policy takes care of the first only, the Third Party policy protects the motorist against both. Broadly speaking the Third Party Policy covers, in addition to Act liability, the liability of the insured in respect of damage to property other than property belonging to or held in trust by him or in his custody or control. It must be noted that whilst the Act Cover relates to the use of the motor vehicle in a public place the Third Party Cover applies to the motor vehicle in any place. There are certain further differences between the Third Party Policy and the Act Policy in the case of any class of vehicles and also as between Third Party policies pertaining to different classes of vehicles and these will be clear from the following:(a)
The Private Card Third Party Policy: Property damage liability, like Act liability, is covered up to an unlimited extent. The indemnity extends not only to any persons, not entitled to indemnity under any other policy, who is driving the vehicle with the permission or on the order of the insured, but also to the insured himself whilst personally driving another private car not belonging to him and not hired to him under a hire purchase agreement. The general exception as well as the geographical limits applicable to the Private Car Comprehensive Policy dealt with hereafter, also applies to the Private Car Third Party policy.
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(b)
Commercial Vehicle Third Party Policy. The limits of liability in respect of property damage are as under:-
(i)
(ii)
Goods
and
passenger
carrying
vehicle
Rs.20,000/=.
All other vehicles Rs.150,000/=. Liability to passengers is not covered except so far as is necessary to meet the Act requirements and in the case of passengers carried by reason of or in pursuance of a contract of employment. The indemnity extends to persons, not entitled to indemnity under any other policy, who drive the vehicle on the insureds order or with his permission but not to the insured himself whilst in any other vehicle. The indemnity also extends to apply in respect of liability in connection with the towing of anyone disabled mechanically propelled vehicle, provided such towing is done gratuitously. The general exceptions as well as the geographical limits applicable to the Commercial Vehicle Comprehensive Policy dealt with hereafter, also apply to the Commercial Vehicle Third Party Policy.
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(c)
Motor Cycle Third Party Policy: As in the case of the Private Car, here too, property damage liability is covered regardless of amount. Liability to passengers (i.e. pillion riders and occupants of side car) is not covered except in cases where the conveyance is by reason of or in pursuance of a contract of employment. The indemnity extends not only to any person not entitled to indemnity under any other policy, who is driving the vehicle with the permission or on the order of the insured, but also to the insured himself whilst personally driving another Motor cycle not belonging to him and not hired by him under a hire purchase agreement. The general exceptions as well as the geographical limits applicable to the Motor Cycle Comprehensive Policy dealt with hereafter, also apply to the Motor Cycle Third Party Policy.
The Comprehensive Policy

The Comprehensive Policy covers all the risks, which are covered by a Third Party policy and, in addition, subject to the limit of the sum insured which is properly known as I.E.V. (i.e. Insureds Estimate of Value), damage to the vehicle itself resulting from the operation of certain perils. This is the broad position and there are differences between the Comprehensive policies pertaining to different classes of vehicles, which will be clear from the following: 105
(a)
The Private Car Comprehensive Policy: Under this policy the Company indemnifies the insured against loss or damage to the car and its accessories whilst thereon mark words whilst thereon by accidental external means, fire, external explosion, self-ignition, lightning, frost, burglary, house-breaking, theft, malicious act, and whilst in transit by road, rail, inland water way, lift or elevator. The companys liability in respect of damage to tyres arises if and only if the car is also damaged at the same time and, even then, is limited to 50% of the cost of replacement. Again, the company has no liability in respect of consequential loss, depreciation, wear and tear and mechanical or electrical breakdowns, failure or breakages. It must be understood, however, that exclusion of mechanical and electrical breakdowns applies only to the particular part or item in which the breakdown takes place and, therefore, any other damage to the car resulting from the breakdown is covered. In addition, the company also pays, up to a limit of Rs.150/- for anyone accident, all expenses actually incurred towards the protection and removal of the car, disabled by reason of loss or damage covered under the
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policy, to the nearest repairers and redelivery to the insured after the repairs are carried out. The policy also permits the insured to authorize the repair of the car necessitated by damage for which the company is liable provided that the estimated cost of such repairs does not exceed Rs.300/- and all necessary details are furnished and assistance given to the company subsequently.
The company will also pay to the insured, the reasonable medical expenses, not exceeding Rs.350/- for anyone accident, actually incurred towards medical expenses in respect of injuries sustained by any occupant of the car, including the insured, as a result of an accident. The cover is valid whilst the car is in use anywhere in Pakistan. There is a compulsory excess of Rs.100/- each and every claim. The entire cover under the policy is subject to the following exceptions, which are termed as General Exceptions: (i) Any damage or liability sustained or incurred outside Pakistan, (ii) Any claim arising out of any contractual liability, (iii) Any claim arising whilst the car is being:
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(a) (b)
Used otherwise than in accordance with the limitations as to use, Driven by any person other than a driver.
(iv) Except in so far as that part of the cover which relates to Act Liability is concerned, the policy also does not cover any claim arising whilst the insured/or any person with his knowledge or consent, is under the influence of intoxicating liquor or drugs. (b)
The Commercial Vehicle Comprehensive Policy: The geographical limit applicable to the cover are throughout Pakistan so far as Act Liability is concerned and, in respect of all other sections, all Pakistan if mofussil rates are charged and Town Limits if town rates are charged. For the rest it appears to be sufficient to mention only the points of difference between the Damage Section of the policy and that of the Private Car Comprehensive Policy which are as below:(i) The Peril of frost is not covered, (ii) Theft of accessories is not covered unless the vehicle is stolen at the same time.
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(iii)
The limit in respect of repairs,
which the insured is permitted to authorize without prior sanction of the company, is Rs.150/- only.
(iv) Medical expenses are not covered.
(v)
Towing of one disabled mechanically
propelled vehicle is permissible provided it is not done for hire or reward. Any damage to the towed vehicle, however, is not covered. (vi) Vehicles used for carrying passengers and goods for hire or reward are subject to the following special restrictions in addition. (a) (b) (c) Goods carrying vehicles carry on an excess of Rs.500/- in respect of each claim. Passenger carrying vehicles carry an excess of Rs.100/-. Damage to mudguards, bumpers, headlamps and paint is not covered.
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Further it should be noted that damage caused by overloading or strain or by explosion of the boilers of the vehicle is not covered.
(c)
The Motor Cycle Comprehensive Policy: This policy may also be conveniently compared with the Private Car Comprehensive Policy and the differences alone stated. The differences between the Damage Sections are as under: (i) (ii) Frost damage is not payable. Theft of accessories is covered only if the vehicle is also stolen at the Same time.
(iv)
Removal and protection charges are
covered up to Rs.50/- only. (v) Medical expenses are not covered. Where there is a compulsory excess of Rs.50/- only.
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Extension of cover
The Third Party Policy as well as the Comprehensive Policy can be extended so as to include additional cover in certain direction. No extra benefits, however, can be included under the Act Policy. The extra benefits commonly availed of are stated below: (a)
Private
Car:
Private Car: The Private Car comprehensive policy can be extended to provide (i) Personal Accident benefits according to stipulated scales of compensation, for the insured and/or his
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wife and/or any passenger named or unnamed, including or excluding the driver. (ii) Wider liability to driver and/or cleaner.
(iii) Strike, Riot and Civil Commotion. (iv) Earthquake. (v) Flood, typhoon and Hurricane. (vi) Loss of rugs, coats and luggage. With the exception of Strike, Riot and Civil Commotion the Third Party Policy also can be extended to include any of the above. Further the Third Party Policy may be extended to include Fie and/or Theft risks. (b)
Commercial
vehicle:
Commercial vehicle: The following risk can be insured in conjunction with a Comprehensive or a Third Party Policy except that in the case of the latter Strike, Riot and Civil Commotion risks must not be included: (i) Higher limits of indemnity in respect of third party liabilities than are provided under the standard policy.
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(ii) Strike, Riot and Civil Commotion risks. (ii) Strike, Riot and Civil Commotion risks. Strike, Riot and Civil Commotion risks. (iii) Earthquake risks
Earthquake risks.
Wider liability to driver and/or clWider liability to driver and/or cleaner.
Flo
With the exception of Strike, Riot and Civil Commotion the Third Party policy also can be extended to include any of the above. Further the Third Party policy may be extended to include Fire and/or Theft risks.
Loss of rugs, coats and luggage
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(c)
Commercial
vehicle:
Commercial vehicle: The following risks can be insured in conjunction with a Comprehensive or a Third Party policy except that in the case of the latter Strike, Riot & Civil Commotion risks must not be included: (i) Higher limits of indemnity in respect of third party liabilities than are provided under the standard policy. (ii) Strike, Riot and Civil Commotion risks.
(iii) Earthquake risks. (iv) Wider liability to driver and/or cleaner. (v) Legal liability to the extent of Rs.10,000/= in respect of goods conveyed by an insured Public Goods Carrier.
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RATING
I.
Public Car Policy - Comprehensive: The premium is charged on the basis of cubic capacity and the value of the car. Separate tables of rates are given in the tariff for insurance of car in Pakistan. If the insured agrees to bear additional excess of Rs.100/-, Rs.250/- and Rs.500/- there is reduction in premium of 10%, 25% and 30% respectively.
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No claim bonus starting from 20% for first year, 10% for subsequent year and going up to 60% of the premium is also allowed if there is no claim during the relevant policy periods. If a person is enjoying no claim discount and in a subsequent year claims under the policy, his discount is not lost altogether but he goes two steps behind for each claim, i.e. if he is getting 60% and makes one claim, on renewal he will be entitled to only 40%, no claim discount. Loading has also been introduced in the tariff for claims. If a person is not getting any claim discount, loading at the following scale will be imposed on renewal: On 20% Two 30% Three 40% Four claims in preceding period of insurance claims in preceding period of insurance claims in preceding period of insurance claim in preceding period of insurance
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50%
Third Party Act
I.
Public Car Policy - Comprehensive:
Public Car Policy - Comprehensive:
The premium is charged on the basis of cubic capacity and the value of the car. Separate tables of rates are given in the tariff for insurance of car in Pakistan. If the insured agrees to bear additional excess of Rs.100/-, Rs.250/- and Rs.500/- there is reduction in premium of 10%, 25% and 30% respectively. No claim bonus starting from 20% for first year, 10% for subsequent year and going up to 60% of the premium is also allowed if there is no claim during the relevant policy periods. If a person is enjoying no claim discount and in a subsequent year claims under the policy, his discount is not lost altogether but he goes two steps behind for each claim, i.e. if he is getting 60% and
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makes one claim, on renewal he will be entitled to only 40%, no claim discount. Loading has also been introduced in the tariff for claims. If a person is not getting any claim discount, loading at the following scale will be imposed on renewal:
On 20% Two 3 Three 40
claim
in
preceding
period
of
insurance
claims
in
preceding
period
of
insurance
claims
in
preceding
period
of
insurance
Four claims in preceding p
II.
Commercial Vehicles policies Comprehensive:
Commercial Vehicles policies Comprehensive:

There are as many bases of rating as are different types of vehicles. Usually there is a basic premium on the size of the vehicles plus a fixed percentage on the value of it. Different rates apply to
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Commercial Vehicles for own use, and those used for time or reward. Similarly, rates vary for vehicles used within town limits and in mofussil areas.
Motor Cycle
Premium is charged on cubic capacity on insureds estimated value. No claim discount is also allowed at fixed percentage.
April 3, 2007
Uncertainty is the essence of life. Every person and every business is on risk. Risk management is concerned with handling this uncertainty. Risk management and loss exposure are also common in life. Some losses are minor but others are detrimental in nature, may be loss of limb, life, property, capacity to perform Risk manager tries to prevent these losses by decreasing its frequency and severity provided these losses are accidental in nature and measurable in financial consequences. Risk manager identifies the Risk Exposure.
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Types of Loss exposures
Property, personnel, liability, net income.
Elements of loss exposures

Values exposed, exposures to perils and possible financial consequences.
Benefits of risk management

Prevention of losses, reduction of financial consequences of losses, stability of life and business, peace of mine Benefits are multiple i.e. for individual and society in shape of reduction and control of losses. Risk management activity involving team for the benefit of society. This assignment covers identification of steps involved in risk management process and also tools and methods used for exposure, identification and analysis. common causes of loss. For property exposures we identify the This assignment also covers risk control Normally exposure of property to different aspects of losses, values at risk and techniques for implementation of different techniques.
everybody reacts differently to manage a risk and basic reasons are difference in understanding of the problem, habit as well as common
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sense of the individuals. However, risk management intend to handle the risks scientifically and statistically because they have specific attitude and sufficient knowledge to do that.
Drive to work
Risk manager can manage only when he has drive to work, which requires constant study, observation and evaluation. He not only takes into account pros and cons of the risk but also takes proper and effective guidance from the past statistics.
The Risk Management Process

This includes identification and analysis of loss exposures, examination of feasibility of alternative techniques available for treating the exposures, selecting the most appropriate combination of techniques, then implementing the selected techniques and finally monitoring the results. Identification and analysis of loss exposures including loss exposures of property, liability, personnel and net income includes values, potential cause or causes and financial consequences. Any related work at this stage shall be included in identification process. Findings of identification process will differ from case to case. We can take example
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of a pharmaceutical factory.
The location of the factory, nature of
construction, nature of raw material, nature of processes involved, housekeeping and possible losses shall include the identification aspect. From location, construction and other features stated above the risk manager is identifying the frequency and severity of any possible loss. Once you identify a risk, you are interested in evaluating the values at risk which will motivate and invite risk manager to calculate maximum probable loss. He will evaluate possible cause(s) with related MPL(s). While identifying the possible cause a risk manager should not oversight any proximate or remote cause of loss and consequent losses following thereon.
Hazards
Hazard is any thing that increases the possible frequency or severity of loss for example fire is a cause of loss but if the subject matter is highly inflammable for example storage of diesel for generator or even gun-powder for match factory. The common exposure identification tool may help us to pinpoint the hazards, which may motivate the risk managers drive to work who will be having relevant details on the table and analyze it from every aspect. The example of identification process quoted in this chapter is good. The next step for risk
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management is to examine the feasibility of alternative techniques, which include answers for following questions: Can a particular risk be avoided? Can it be prevented? Will it result in loss reduction? Will it segregate the exposures?
Let us comment on these risk control techniques: Loss Avoidance:

Avoidance involves choosing not to own an asset or engage in any activity that gives rise to the possibility of loss. This is least practical of risk management techniques because if we can 100% avoid a risk there is no need of risk management or even insurance. Loss prevention techniques try to reduce the frequency of a particular loss and this may be through analyses of possible causes and scientific work on control of causes which may subsequently not only reduce the frequency of losses but also quantum of loss. Similarly losses reduction techniques try to decease the severity of losses for example using of seatbelt in driving, installing fire fighting equipment in the factory or ensuring sufficient and reasonable packing for marine transits. The segregation of all exposures can be accomplished by separation or by duplication. For separation we can quote the example of owner of a cloth manufacturing who stores inventory in several warehouses. The risk manager would like to know the exact location of different exposures and the values at risk. By contractual transfer of risk control we mean transferring a legal and
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financial expense for a loss to an asset for example in a warehouse
where stocks of everyday use are stored by a departmental store but the area is under control of any security agency.
Risk financing techniques are also available and can be used along with retention and transfer techniques. By retention we mean
that individuals or organizations plan to generate the funds to pay every loss, values at risk but not for high value risks. The risk financing transfer shifts the financial responsibility for losses from one party to another through a contract may be insurance or noninsurance transfers. Insurance is a system by which the risk is transferred by one person or an organization to an insurance company in exchange for specific payment viz. insurance premium.
REINSUANCE DEPARTMENT
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DEFINITION
Reinsurance is an agreement between two or more parties i.e. Re-insured or ceding company and the Re-insurers. The re-insurers agree to accept the shares of reinsured risks and the ceding company is bound to reinsure in accordance with terms of agreement of reinsurance. The purpose of reinsurance is purely technical which can be explained by a simple example that a vehicle fitted with shocks do not make a bumpy road free of jerks but the passengers will feel the jerks less as these are absorbed by the elasticity provided by shocks. Similarly when a
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company is reinsured it does not reduce losses but make it easier for the ceding company to carry the consequence of losses. In other words reinsurance is a contract whereby one (the reinsurer) for a consideration agrees to indemnify an other (the ceding company) wholly or partially against losses or liabilities insured by the ceding company in accordance with terms and conditions of reinsurance agreement or we may say that a contract of reinsurance is one by which an insurer procures a third party to insure him against losses or liabilities agreed in original insurance.
IMPORANT FEATURES OF REINSURANCE

Reinsurance is a contract separate from original insurance contract. ii. Reinsurance agreement need not cover the entire obligations of the ceding company but only to the extent as agreed. iii. The reinsurance contract must cover the same risks/perils as covered by original insurance. iv. The insurance contract and reinsurance contracts must exist at the same time. i.
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v.
The insurance contract indemnifies the insured while reinsurance contract is only and only for the benefit of ceding company i.e. direct insured has no rights of recovery from re-insurers.
TYPES AND METHODS OF REINSURANCE

There are two main types of reinsurance arrangements:1. Proportional Reinsurance and 2. Non-proportional Reinsurance By proportional we mean where the ceding companys retention is in proportion to re-insurers liability while a non-proportional the re-insurers liability is not proportional but is in excess of loss amount or loss ratio agreed.
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TYPES OF PROPORTIONAL REINSURANCE Proportional re-insurance may be in the form of:1. Facultative Re-insurance. 2. Surplus Treaty Re-insurance. 3. Quota-Share Treaty Re-insurance. TYPES OF NON-PROPORTIONAL REINSURANCE Non-proportional re-insurance may also be divided into:1. 2. 3. 4. Facultative non-proportional or excess of loss reinsurance. Risk Excess of Loss. Catastrophic Excess of Loss. Stop Loss or Correct Excess of Loss.
Re-insurance arrangements may further be divided in two types:1. Facultative Re-insurance Arrangements:
In this arrangement the ceding company has choice to offer and re-insurers have choice to accept. These arrangements are normally on case to case basis. The re-insurer has the freedom to choose how much of the risk to re-insure and what premium to charge. The ceding company must disclose fully all material facts pertaining to the risk offered. 2. Surplus Treaty Re-insurance:
128
It is an agreement in writing between the ceding company and re-insurer or a number of re-insurers where the re-insurers automatically accept (without further negotiations or questions) any cessions falling within the terms of the agreement. Treaty agreements are normally on annual basis and ceding company is bound to cede in accordance with the agreement and reinsurers are bound to accept the risks offered within the terms and conditions of agreement. This type of re-insurance arrangement is more than convenient for both the parties to the contract and assures economy of time, efforts and expenses.
Now these two types of arrangements are being discussed in bit detail.
Facultative Re-insurance This is the oldest form of re-insurance and is normally used for risks which are beyond the underwriting capacity of the ceding company or where certain risks fall outside the scope of automatic treaty re-insurance. This type of cover is normally
129
offered in case of hazardous or complicated risks. A simple example of facultative re-insurance can be given as below:- Spinning Unit insured for total values at risk Rs.250 Million - Covered by companys automatic re-insurance arrangements Rs.150 Million - Offered on facultative basis Rs.100 Million
The procedure for facultative re-insurance can be explained as below: Request Note All offers are sent to the re-insurer or re-insurers through Request Note, which is signed, by the re-insurer or re-insurers with terms of acceptance. Closing Particular Closing Particular follows the Request Note giving full particulars of the risk re-insured facultatively. On receipt of Closing Particular from the ceding company the re-insurance company or companies issue their Re-insurance policy which finalizes the facultative re-insurance agreement. Premiums/commissions are settled between ceding company and re-insurers as agreed. Advantages of Facultative Re-insurance
130
The advantages of facultative re-insurance include:Individual consideration of risk. Increase in ceding companys underwriting capacity. iii. The freedom to offer and freedom to accept. iv. The ceding company and re-insurer both benefit from the technical know-how of each other. v. It provides an opportunity to both parties to develop a healthy commercial relationship. i. ii.
Disadvantages of Facultative Re-insurance 1. 3. 4. 5. 6. The ceding company has to face difficulties for complete and successful placement of risk. 2. The administrative expenses are high. The ceding company has to disclose full underwriting particulars and claim statistics of risk involved. The effort factor is there in facultative re-insurance. Commissions are normally low. The ceding company is at risk unless the entire surplus is facultative placed and accepted.
Surplus Treaty Re-insurance
Under Treaty Re-insurance the risks falling under certain category/classification are automatically re-insured as and when underwritten by the ceding company. A simple example of Treaty Re-insurance can be quoted as below:131
Values at risk for a Spinning Mill-Rs.255 Million Ceding Companys own retention-Rs.5 Million Balance = Rs.250Million
Re-insured under Surplus Treaty Re-insurance of 50 Lines.
In case the sum insured is Rs.300 Million the Reinsurance Arrangements will be like this:Total Sum Insured Companys own retention Balance = Rs.300 Million Rs.5 Million
Rs.295 Million Rs.250 Million Rs.5 Million
Re-insured under Surplus Treaty Re-insurance of 50 Lines. Balance = Re-insured facultative.
Advantages of Treaty Re-insurance 1. 2. 3. It is automatic and convenient in operation. A definite capacity is available to the ceding company. The ceding company is allowed to retain the proportion in accordance with their own capacity.
132
4.
It is simple and economical in operation.
Disadvantages of Treaty Re-insurance Disadvantages include:1. 2. It limits ceding companys choice. The ceding companys and Surplus Re-insurers Treaty results differ and this difference may influence the original construction between the insurers net and gross account.
Quota Share Treaties

Quota Share Treaties are simplest in their operation and is purest form of proportional re-insurance whereby the ceding company agrees to cede a stated percentage amount of all business of his ceded gross account and re-insurers agree to accept the ceded percentage of that amount e.g. each companys re-insurance arrangement for bond insurance is on quota share treaty where UIC retention is 10% and 90% is automatically re133
insured with re-insurers. The companys maximum retention is also Rs.1 Million. In other words UIC can issue bonds up to Rs.10 Million, Rs.1 Million is on UIC A/c and Rs.9 Million on Re-insurers A/c. For any bond costing Rs.10 Million UIC shall have to arrange facultative re-insurance.
Advantages of Quota Share Treaty 1. The relationship is absolute and re-insurer always follows the fortune of ceding company. 2. The underwriting results of both ceding company and re-insurers move in parallel way. 3. Account of Quota Share Treaty is very simple. 4. This type and reinsurance arrangements are flexible and simply increasing ceding companys percentage can increase capacity. Disadvantages As Quota Share involves Cession of all business large amount of ceding companys premium income (which otherwise can be retained) goes to the credit of re-insurers.
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Facultative Obligatory
Facility of obligatory facultative reinsurance arrangement is also available in the market. Under these arrangement which are normally for certain definite class or classes of business such as industrial risks is arranged in the form of Treaty where the ceding company is bound to place the surplus with re-insurers on facultative basis and re-insurers are obliged to accept provided the risk offered fall within the agreed class(es).
Open Covers
A re-insurer may enter into an agreement with another party (often a Broker) accept all cessions of a given class of original business that the Broker may wish to place with re-insurer. This open cover can also be on Surplus or Quota Share basis. The underwriting of open cover requires a good knowledge of current market conditions.
Non-proportional Reinsurance
1. Facultative Excess of Loss
Under this arrangement the reinsured (ceding company) selects a fixed monetary amount to retain on a particular risk (or account) and arranges Excess of Loss protection with re-
135
insurers for any claim amount which might exceed that fixed monetary retention. This monetary retention is normally based on ceding companys payment capacity. Certain Facultative Excess of Loss Re-insurers prefer to accept business in excess of estimated maximum loss rather than amount in excess of retention. Facultative Excess of Loss of reinsurance is permitted under the terms of its automatic proportional treaties and do not disturb other reinsurance arrangements. Advantages (i) We have to consider every risk individually. (ii) It increases ceding companys underwriting capacity to a great extent. (iii) By way of Facultative Excess of Loss ceding companys proportional treaty account may also be protected. (iv) It helps both ceding company and the re-insurer to develop a professional relationship. Disadvantages (i) Ceding company normally faces difficulties in obtaining such covers. (ii) Administrative cost is comparatively higher. (iii) Full particular of the risk are to be disclosed (iv) The scientific calculation of EML is difficult. 2. Treaty Excess of Loss
Under Non-proportional or Excess of Loss reinsurance the reinsured (ceding company) selects a fixed monetary amount to retain on a particular account and arranges Excess of Loss protection with re-insurers for any claim amount which exceeds the fixed monetary amount. The Excess of Loss may also be arranged for 1st, 2nd and 3rd Surplus Treaties to enhance the
136
ceding companys automatic underwriting capacity. Excess of Loss arrangement may again be on the basis of fixed amount or the stated loss ratio.
137
SECTION 3
138
RATIO ANALYSIS
DEBT RATIO
LIQUIDITY RATIOS
MARKET RATIOS
PROFITABILITY RATIOS
139
1. Current Ratio:
Current assets Current liabilities
2006
385667659 239655782 1.6:1
X 100
2005
326491753 211352173 1.5:1
X 100
COMMENTS
140
Current ratio may be define as the relationship between current Assets and Current Liabilities this ratios also known as working capital ratio. It is a measure of general liquidity and is most widely used to make the analysis for a short term financial position of a company. A relatively high current ratio is an indication that the company is liquid and has the ability to pay its current obligations in time as and when they become due.
Current ratio measures the firms ability to meet its short term obligations generally the higher the current ratio the more liquid the firm is considered to be. In 2005 firms ratio was 1.5:1 which is acceptable but improved in 2006 and went up to 1.6 which is good.
141
. Debt ratio:
Total liabilities X 100 Total assets
2006
579540628 753380303 76.92%
X 100
2005
517640513 662933350 78.08%
X 100
142
COMMENTS Debt ratio measures the proportion of total assets financed by the firms creditors. The higher the ratio, the greater the amount of other peoples money being used to generate profits. In general, this is known as long-term debt as this commits the firm to a stream of payments over the long run. Because creditors claims must be satisfied before the earnings can be satisfied to shareholders, present and prospective shareholders pay close attention to the firms ability to repay debts. In 2005 company has financed 78.08% of its assets with debt but this is improved in 2006 and reduced up to 76.92%. Thus the firms degree of indebtedness and financial leverage is increased.
143
2 Return on total assets:

Earning available to common stock holders Total Assets
2006
29876923 753380303
X 100
4%
2005
28601617 662933350 4.3 %
X 100
144
COMMENTS The return on total assets often called the return on investment measures the overall effectiveness of management in generating profits with its available assets. The higher the firms return on total assets the better the firm will be. In 2005 the firm ratio of ROA was 4.3% which was reasonable. This value indicates that the firm earned 4.3% on each dollar of assets investment. But this ratio has decreased to 4% in 2006.
145
5.
Solvency Margin Shareholders Equity Net Premium Revenue
2006
173839675 390820000
X 100
44.5 %
2005
1475293000 X 100 300413000 48.4 %
146
COMMENTS UIC ratio of Shareholders equity to Net premium revenue shows an Increase in the equity through the years. The ratio gives an Idea about the liquidity of the firm that how much equity is helpful is generating a certain amount of Income and paying of debts at time of solvency. In 2005 the firm had 48.4% of solvency margin which has been decreased to 44.5% showing the better position of the firm to liquidate against solvency.
147
5.
Earning Per Share. Earning Available To Common Stock Holders No of shares outstanding
2006
29876923 10000000 Rs.2.98/-
2005
28601617 8000000
Rs.3.57/-
148
COMMENTS EPS represents the amount earned on behalf of each share not_ the amount of earnings actually distributed to shareholders. EPS is generally of interest to present or prospective stockholders and management. In 2005 EPS of UIC was Rs.3.57 but it is very disappointing to see that in 2006 it decreased to Rs.2.98.
149
6. 3
Break up value per share. Total share holders equity No of shares outstanding
2006
= =
173839675 10000000 Rs.17.38/145292837 8000000 Rs.18.16/-
2005
150
COMMENTS
This ratio is used to know that how much equity amount has been received by the firm under each share. By using this amount, firm has maintained its basic business and the dividend is paid on each share on behalf of this paid up capital given by shareholders. This ratio is majorly used to pay back amount to each shareholder if the firm meets solvency. This ratio also helps firm to calculate the face value of shares at time of transfer of shares. It is also used to compare the market and face value of the shares. In 2005 the break up value of each share of UIC was Rs. 18.16 which decreased to Rs. 17.38.It shoes that the face value of the shares has been decreased which is not a good indication to the share value of the shares.
151
Outstanding Premium and percentage of gross premium
Outstanding premium X 100 Gross premium
2006
16.6%
2005
57660000 X 100 514201000
= ANALYSIS
11.2%
152
Loan plus Investment Percentage of Total Assets
Loan plus Investment Total assets
2006
46722000 X 100 753380303
6.2%
2005
49917000 662933350
100
6%
153
ANALYSIS This ratio indicates the firms ability to repay its debts against its assets. Through this ratio, it is checked whether the company has an ability to repay its borrowings or not. The creditors or lenders use this ratio to analyze the firms condition before lending. In 2005 firms borrowings to asset ratio was 6% which is improved in 2006 to 6.2% showing the strong position of the firm
154
Cash and Bank Balance Percentage of Total Assets ( Ex. Cash)
Cash and Bank Balance Total Assets Ex Cash
2006
25%
2005
45796000 390820000
100
28%
155
ANALYSIS This ratio shows that how much liquid asset the firm has in the shape of cash out of its total assets. In 2005 the firm had liquid asset (cash) proportionate of 28% while in 2006 it decreased to 25%. This situation shows the better utilization of firms assets. If in any firm, cash is in greater proportion, it is not supposed to be a good signification to the better utilization of assets. It shows that the firm is keeping its money in cash format and escaping credit transactions which run the operating cycle fast. So as much less the liquid asset the firm has, the better its credit position is.
156
Unearned Premium and Percentage of Net Premium Revenue
Unearned Premium X 100 Net Premium Revenue
2006
169948000 390820000
X 100
43.48%
2005
165595000 X 100 300413000
55.12%
157
ANALYSIS This ratio is used to calculate the percentage of unearned premium out of net premium amount estimated to be through different transactions. In 2005 firm had a proportionate of 55.12% which decreased to 43.48% in 2006 showing the bad position of the firm in collecting its premium amount out of the total net revenue.
158
Unearned Premium and Percentage of Premium Earned
Unearned Premium Premium Earned
X 100
2006
169948000 X 100 563194000
30.20%
2005
238811000 424122163
100
56.30%
159
ANALYSIS
This ratio simply tells the proportionate of unearned premium to the earned premium. Out of the total premium, estimated to be earned through some specific transaction, unearned and earned premium proportionate can be seen through this ratio. In 2005 this ratio was 56.30% which decreased to 30.20% due to increase in earned premium and decrease in unearned value in 2006.It shows the good recovery of earned premium in 2006.
160
7.
Prepaid Reinsurance Premium Ceded and Percentage of Reinsurance Expense
Prepaid Reinsurance Premium Ceded X Reinsurance Expense
100
2006
42194000 X 100 168772000
24.5%
2005
45796000 X 100 165829000
27.6%
161
ANALYSIS This ratio is used to know the proportionate of premium ceded (offered) and the expenses expected to occur from this offer. When the firm offers any reinsurer against any insurance policy held by it, it offers some premium rate to that reinsurer, against which some stationery and travelling expenses etc. also occur. If these expenses exceed the premium amount , the firm does not offer any reinsurance.
162
8.
Prepaid Reinsurance Premium Ceded and Percentage of Reinsurance ceded
Prepaid Reinsurance ceded Reinsurance ceded
X 100
2006
42194000 168772000
100
163
SECTION 4
WORK DONE BY ME
164
THE PROBLEM I FACED It was unimaginably excellent experience to work at UIC.I have never found such a co-operative crew throughout my past experience (in the shape of ex-internship done in B.com & different surveys for different projects and research works). Despite of having best possible co-operation by the heads & employees, I faced some specific problems such as: No proper placement to sit & observe the work of all employees in one department No in-time access to network facility No room for ladies to sit separately during lunch break
But despite of having these problems, I faced no any specific hurdle in data collection process_rather I found UIC the best organization for its co-operative employees to train and help the trainees.
165
SECTION 6 CONCLUSIONS & RECOMMENDATIONS
OBSERVATIONS ABOUT ANY DILEMMAS FACED BY ORGANIZATION
During my 6 weeks internship I have found some dilemmas faced by organization. These dilemmas are as under: Less efficient workers Over burden on one employee causing quarrels b/w employees to accept further responsibilities Pending work habit of one department employees causing other departments to wait for beginning of their work Less working place No attraction to workers in shape of bonus or promotion Over employment causing more expense increase rather than profit from such employment
RECOMMENDATIONS
Workers should be given short assignments within some specific time limit so as to make them responsible & efficient Proper division of work should be done so as to complete task more effectively & efficiently and to avoid pending work Working area should be enlarged so as to make workers feel comfortable & to lessen the hustle and bustle at working premises Promotions should be given_ or bonus should be offered at efficient work done by any employee Annual increment should be introduced rather than biannual increment
166
CONCLUSION REFERENCES
ANNEXURES AND DOCUMENTS
167
SWOT ANALYSIS STRENTHS Pakistans good insurance company having built strong trust of customers over insurance concerns Having one of the best top ten reinsurance managers of Pakistan naming QAMAR NAQVI, the head of reinsurance department and the best market dealer Kind & humble heads of each department causing employees feel as if they are at home Excellent environment Authority to managers in their own respective departments Rest time of one hour given to employees during working hours Proper TIME & MOTION study was conducted for the calculation average working hours Insureds satisfaction Availability of worlds best reinsurers (National & International companies) Facilities to employees Annual trip of employees to different areas of PAK (called MANGO PARTY) Proper working hours i-e from 9am to 4:30pm Internet facility
168
WEAKNESSES Improper division of work Careless behavior of employees towards co-operative works Improper use of authority given to employees at lower level Awareness problem Slow grade movement even no movement No dead line given to workers for normal routine works Decentralized management leads workers to do work with their own intention No network transactions Poor database management system
OPPORTUNITIES
Global reach Strong management through centralization Better relations with other co-insurers Better economic conditions Reduction in tax rates
169
THREATS
Increased competition Terrorist activities Employees rood/non serious behavior
170

Internship Report On Universal Insurance Company: Zara Rafique

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Internship Report On Universal Insurance Company: Zara Rafique

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INTERNSHIP REPORT ON UNIVERSAL INSURANCE COMPANY

HAILEY COLLEGE OF COMMERCE UNIVERSITY OF THE PUNJAB LAHORE

Signature of Deponent Zara Rafique

Supervisor Prof. Usman Rafique

37 38 39 39 44 44 Page No 49 52 56-81 56 63 64 66 68 70 82-94 82 84 85 86 88 89 90 91 92 93 93 93

Interest rate risk Conclusions and Recommendations Recommendations References

94 95-97 98-99 100-102

MISSION & VISION STATEMENT

The Universal Insurance Company Limited

ESTABLISHMENT OF BRANCHES IN PAKISTAN

GENERAL OFFICER OFFICES

PRESENT STATUS OF THE COMPANY

The Universal Insurance Company Limited

COR POR ATIO N

(Managing Director) (Chairman)

BASIC PRINCPLES OF INSURANCE

THE BASIC PRINCPLES

Utmost good faith

Modification for the indemnity principle

Insurance contracts not subject to the role of indemnity

Subrogation (an implied condition in all contracts of indemnity)

The common law position

2. UTMOST GOOD FAITH

Facts which must be disclosed:

warranties and representations:

THE STATEMENTS OF INSURANCE PRACTICE

Who can insure property?

With marine cargo policies, insurable interest is necessary at the.

The rules for determining proximate cause

Marine Professional indemnity

Contingenc y Personal insuranc e

Fidelity Guarantee Insurance:

Fire Insurance Department

Marine Insurance Department

Motor Insurance Department

FIRE INSURANCE DEPARTMENT

WHAT IS FIRE INSURANCE?

The contract of fire insurance

MARINE INSURANCE DEPARTMENT

HISTORY OF MARINE INSURANCE

MARINE INSURANCE DEVELOPMENT

MARINE INSURANCE ACT 1906

MARINE INSURANCE GENERAL PRACTICE

ROLE PLAYED BY MARINE INSURANCE IN INTERNATIONAL TRADE

THE DOCUMENTS OF TITLE ARE

INTERNATIONAL MARINE INSURANCE MARKET

ACCIDENT & MISCELLANEOUS INSURANCE DEPARTMENT

Accident & Miscellaneous Insurances

Personal Accident Policy:

Need for Motor Insurance

Motor Vehicles Act, 1939

In the case of goods and passenger carrying

In the case of vehicles in which

Scope of Motor Policy

The Act Policy:

Third Party Policy:

The Comprehensive Policy

The limit in respect of repairs,

(iv) Medical expenses are not covered.

Towing of one disabled mechanically

Removal and protection charges are

Wider liability to driver and/or clWider liability to driver and/or cleaner.