internship report by shaikh mujtaba ali

EFU GENERAL INSURANCE LTD

Internship Report Submitted to : Talha Sher Chisti , HR

Manager.

Shaikh Mujtaba Ali (12263) ,Internee at EFU 6/12/2014

Every Insurance policy aims to provide financial security to the insured from any future uncertainties that have been mentioned in the insurance contract. Such coverage of loses is deemed to be examined and investigated before any claims are reimbursed. Typical there are certain principles of insurance that must be followed to maintain the essence and biasness in the insurance contracts.

Internship Report 2014

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Name: Shaikh Mujtaba Ali

ID No. 12263

Control No.S14-181

Major Field Risk Management and Finance

1.1. Organization where internship was served EFU General Insurance LTD

Duration: From 11 July 2014 to 24 July 2014

1.2. Report based on (Tick) Option 1 __________1_________ Option 2 _________________

1.3. Due date of the report 21 Aug 2014

(2 weeks after the successful completion of internship)

1.4. Report submitted on 7 August 2014

1.5. Delayed by 7 days

(If applicable)

1.6. Reasons for delay 2 Sick leave, 2 Casual leave and 3 leaves to suit myself for a course taken

on Saturday (leaves compensated at the end of my internship)


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Table of Contents

Acknowledgment ........................................................................................................................................................... 5

Executive Summary ........................................................................................................................................................ 6

Overview of the company .............................................................................................................................................. 7

Vision ......................................................................................................................................................................... 8

Mission ...................................................................................................................................................................... 8

Value ......................................................................................................................................................................... 9

Integrity & Ethics ....................................................................................................................................................... 9

Excellence:- ................................................................................................................................................................ 9

Professionalism ......................................................................................................................................................... 9

Our people ................................................................................................................................................................. 9

Corporate social responsibility .................................................................................................................................. 9

Product and Services ................................................................................................................................................. 9

Value added services ............................................................................................................................................... 10

Competition In the market ...................................................................................................................................... 11

CORPORATE PROFILE ............................................................................................................................................... 13

Overview of Branch. ..................................................................................................................................................... 14

Overview of the Departments. ..................................................................................................................................... 16

Underwriting Department ....................................................................................................................................... 16

Motor Underwriting ................................................................................................................................................ 16

Marine Underwriting ............................................................................................................................................... 17

Fire Underwriting .................................................................................................................................................... 17

Property Underwriting............................................................................................................................................. 18

Engineering Underwriting ....................................................................................................................................... 18

Miscellaneous Underwriting .................................................................................................................................... 19

Bonds Underwriting................................................................................................................................................. 20

Claims Department.................................................................................................................................................. 20

Responsibilities of Accounts Department (My view) ............................................................................................... 22

Marketing Department ........................................................................................................................................... 23

Description of the Task Assigned during Internship ..................................................................................................... 24


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Week 1, 2 , 3 ............................................................................................................................................................ 24

Week 4 and 5 ........................................................................................................................................................... 24

Week 6..................................................................................................................................................................... 25

Other Task ............................................................................................................................................................... 25

SWOT Analysis ............................................................................................................................................................. 26

Strengths ................................................................................................................................................................. 26

Weaknesses ............................................................................................................................................................. 26

Opportunities .......................................................................................................................................................... 26

Threats .................................................................................................................................................................... 27

Conclusion and Recommendations .............................................................................................................................. 28

Permanent hiring:.................................................................................................................................................... 28

Job training programs: ............................................................................................................................................ 28

Perquisites and allowances: .................................................................................................................................... 28

Adoption of effective technology: ........................................................................................................................... 28

Decentralization: The .............................................................................................................................................. 28

Works Cited.................................................................................................................................................................. 29


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Acknowledgment

All praise to ALMIGHTY ALLAH alone, the Omnipresent and the most Merciful and

compassionate. The words are bound, knowledge is limited and time is short to express His

dignity. It is one of infinite blessings of ALLAH that he bestowed me with the potential and

ability to contribution towards the deep oceans of knowledge already existing. I pay hum-age to

greatest personality of the universe; HOLY PROPHETHAZARAT MUHAMMAD (PBUH) Who is

forever torch bearer and spring of guidance in every sphere of life. I am deeply indebted and

also express my gratitude to my respected teachers at IOBM (Institute Of Business

Management) , Karachi for their support.

It is my privilege and honors to express my deep gratitude and in calculating thanks to Mr. S.M

Haider , Senior Executive Director (SED) , Divisional Head and Mr. Khalid Ashfaq, Assistant

Executive Director (AED) at S.I.T.E Division Branch EFU, Karachi and also my internship

supervisor. I would like to give my regards to the Mr. Talha Sher Chisti, HR Manager, of EFU,

Karachi, for his continuous supervision, guidance and cooperation throughout my internship

tenure and without whom my internship experience would not have been as pleasant as it was

I am thankful to all of my seniors in my branch, Including Shah Ashgar Abbas (SVP Claim Dept.),

Laiquat Imran (SVP Motor leasing dept.), Mohammad Naseem (SVP Account Dept.), Mohd.

Idrees abbasi (Admin-SVP), Feroz Uddin Haider (VP Motor underwriting Dept.), Syed Khalil

uddin (VP Property Underwriting), Noman Shahid (AVP Underwriting Dept.) Sohaib Raheem

(Manager Underwriting Department) , Shoaib Nazir (Manager Property Underwriting)

,Mohammad Yameen (Manager Misc. Dept.), Mumtaz Ahmed (Manager Marine Underwriting),

Asim Raza, (Manager Claim Dept.), my fellow internee Haris Younus (at Crescent Branch) and all

the staff of S.I.T.E Branch whom cheerfulness and support made my internship experience

memorable and worth remembering for.

I am very thankful to Mr. Asif Rasheed, (Manager Motor Dept.), Mr. Omran Ghayas (Manager

Claim Dept.) and Mr Noor uz zamaan (Manager Claim Dept.) for their unconditional guidance

and open hearts while transferring knowledge to me and for providing me a shelter and the

opportunity to have an excellent learning experience during my internship at S.I.T.E Division

Branch, EFU General Insurance LTD, Karachi


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Executive Summary

EFU general insurance LTD is the leading insurance company in Pakistan with assets of 31

billion. The registered office of the Company is situated in Islamabad while the principal place

of business is located at EFU House also known as Qamar house, M.A. Jinnah Road, Karachi. The

Company is listed on the Karachi and Lahore Stock Exchanges and is engaged in non-life

insurance business comprising perils such as fire and property, marine, motor, miscellaneous

and engineering etc.

In this 6 weeks internship I have worked in the S.I.T.E Division and I have learnt about all the

functions of single branch.

This Internship report contains a detailed analysis of the things that I have learned and

experienced at EFU General Insurance LTD, S.I.T.E Division. It also contains information about

financial sector, history of insurance, history of EFU, nature of insurance business and

competitors in the market. The structure of EFU has been shared in this report. The product

and services of EFU has been given. This report also gives the policy and exclusion of insurance.

Then it contains information about internship plan and training program.

At the end of this report based on my observation and learning, SWOT analysis of EFU general

insurance has been presented. Suggestions are also recommended as per learning from

analysis. This report will provide a better and brief learning about EFU General Insurance LTD.


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Overview of the company

During the early 19th century, economic renaissance was becoming more then obvious for the

Muslims of India as the source of inspiration was not other then Quaid-2-Azam himself. Hence

Shipping, Airline, Banking and Insurance Companies started to develop in the economy. (EFU)

In 1932, Mr. Ghulam Mohammad, a far sighted man, established Eastern Federal Union

Insurance Company (EFU) with financial assistance from the Aga Khan III and the Nawab of

Bhopal. Mr. Abdur Rehman Siddiqui became the founder chairman. The company was originally

registered at Kolkata. (EFU)

EFU started operating from in 1932 and also set up offices in London, Ceylon and Palestine.

After the partition EFU shifted its office to Pakistan by establishing its registered office at and

Head Office at Karachi. EFU was listed at the Karachi Stock Exchange in 1949 and was amongst

the first seven certified companies of Pakistan. During 1961-1972, EFU achieved great success

and reached tremendous heights of business, it was the era of Mr. Bhimjee to whom the EFU

would always remain indebted. Under his dynamic leadership, every second insured person was

an EFU customer and some of the very best brains of the country were recruited by EFU.

EFU also made training as an essential tool for its employees. EFU introduced Group Term

Insurance for the first time in Pakistan. In 1970 EFU become the largest Life Insurance Company

in Afro-Asian countries (excluding Japan).

Loss of East Pakistan in December 1971 resulted in huge loss of business. Nationalization of life

insurance companies gave another jolt to EFU in 1972. All its assets were taken over and the

EFU was left with only general insurance business. However, EFU survived and carried on its

business. When private sector was allowed to undertake life insurance in 1992, EFU was the

first to establish a separate entity EFU Life Insurance Company and now enjoys a market share

of more than 60% of the private sector life.

It is also Pakistan's first life insurance company, which got ISO 9001-2000 certification. EFU is

also the innovator of Unit Link Life Insurance. JCR-VIS Credit Rating Company Limited has

upgraded the insurer financial strength rating of EFU Life to 'AA-' from 'A+' with a 'Stable'

Outlook


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In 2000, EFU Group launched Allianz EFU Health Insurance Ltd. It is the First specialized medical

insurance company of Pakistan.

EFU General has also been adjudged amongst Top 25 Companies seven times by the Karachi

Stock Exchange. It is also the recipient of 24th Corporate Excellence Award of Management

Association of Pakistan. Today, EFU stands for Brand name in Insurance. Although knowing the

fact that coming years of Insurance Industry will raise countless challenges in the progress of

insurance sector but EFU wishes to look ahead and march forward very firmly keeping faith in

God and hard work to sustain the commitment to meet and exceed its stakeholders

expectations by modern technology, collective wisdom and institutionalized leadership.

(http://www.efuinsurance.com/newsletter/pdf/issue88_pdf/page6.pdf)

EFU is in the business of providing a full range of non-life insurance products and services

customized to meet the varied needs of a wide spectrum of businesses and industrial clients as

well as individuals, providing Property, Marine/Aviation, Motor and other Miscellaneous

products. The most important aspect of EFUs operation is that they have created a separate

Risk Management Team and an Engineering Group who work closely with clients to identify

various risk exposures and then provide specific insurance. This helps in loss prevention and

reducing the cost of premium. Their market-driven team of inspired and technically qualified

insurance personnel, specializing in civil, mechanical, metallurgy, electronics and having

overseas linkages, is on-call for necessary professional advice at all times. It is their policy not

only to provide protection and risk reduction but help clients develop preventive capabilities to

avert major perils and calamities. Over the years they have developed a full range of insurance

services for large infrastructure projects including the areas of oil/gas exploration field.

They are fully equipped with technical, marketing and managerial skills supported by

reinsurance arrangements with a number of European firms of international repute to cater for

all classes of specialized insurance and provide customer service of the highest quality. Their

clients include both large and medium sized organizations in all sectors of the economy. They

are committed to new product development and innovation, legendary customer service and a

promise that everything they do, they do from the heart.

Vision

To continue our journey to be better than the best.

Mission


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To provide services beyond expectation with a will to go an extra mile. In the process, continue

to upgrade technology, human resource and reinsurance protection.

Value

To provide services beyond expectation with a will to go an extra mile. In the process, continue

to upgrade technology, human resource and reinsurance protection.

Integrity & Ethics

Conduct business with ethics, dignity, fairness and transparency

Excellence:-

We measure our performance by results but more by quality of service.

Professionalism

We believe professionalism is perfection. Business resources are utilized in a manner to achieve

optimum returns on resources.

Our people

In EFU we work like a family. Everyone is treated with respect and without any discrimination.

Corporate social responsibility

EFU donate to various institutions in health and education sectors, for improving the lifestyle of

common man.

Product and Services

EFU General provides a full range of insurance services to fulfill the needs of all of its customers

being commercial and individual clients. Their product portfolio includes:

Property (fire & engineering)

EFUs portfolio comprises of a broad spread of quality business ranging from simple residential

property to very large sophisticated industrial risks. These would include activities involving

complex risks relating to Oil & Gas exploration / development, petrochemicals and other major

industrials. The fire portfolio in the main comprises of operational risks other than power

generating industry. The engineering part of the portfolio would include in the main

construction risks be it simple civil work or major infrastructure projects like dams, highways

etc. Other engineering risks would include coverage for breakdown of plant / machinery. The


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insurance covers include both material damage as well as loss of revenue due to business

interruption following the material damage.

Marine aviation & transport

Marine Cargo

Insurance coverage is provided for goods in transit from all over the world to Pakistan and vice

versa by all means of conveyance i.e. sea, air and land. Special insurance products are also

offered for large project cargoes and this class also includes for such projects, loss of revenue

insurance.

Marine Hull & Aviation

Coverage is provided for the insurances of ships, other vessels and aircraft ranging from small

single general aviation to airlines. This insurance includes both physical damage as well as

liabilities to third parties and passengers.

Motor

EFU provides a full range of products for all kinds of vehicles being either private or commercial

and the coverage includes physical damage including theft and liabilities as required under law.

Ancillary products are also offered for personal accident to drivers, passengers, and the like.

Miscellaneous

All other insurance products of various types to suit individual client requirements are also

available like bankers blanket, personal accident, travel, liability, money, stock brokers, credit

cards, asset value, event cancellation and other like insurances. Also, specialized insurance

covers are offered to crops covering loss due to natural calamities and viral / bacterial attacks.

Value added services

EFU provide SMS HELP service to her customer in respect of Motor Insurance which helps her

customers receive important emergency contact numbers via SMS, in case of any accident. EFU

also provide SMS confirmation of Claim, SMS claim guidance and electronic survey reporting

services to EFUs customers in respect of Motor Insurance. EFU have also introduced On-Line e-

cover note facility in respect of Marine Cargo Insurance which will facilitate EFUs designated

customers, who are authorized to use this facility, to capture and prepare Marine Cargo Cover

notes instantly. In addition, EFUs qualified engineers provide recommendations and guidance

to EFUs Property Insurance clients on various aspects of industrial safety including protection

measures as well as sharing of information on latest techniques as per international standards.


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Competition In the market

History

77 foreign insurance companies were dominating the Pakistan market post partition when the

strength of local insurers was only seven. In 1952 Government established Pakistan Insurance

companies increased to 60 while number of foreign companies reduced to seven. In 1976

National Insurance Corporation (NIC) was formed, with the purpose of undertaking General

Insurance business relating to any public property.

Present Situation

The Pakistani insurance market has undergone major structural changes in last few years

through mergers of companies to meet the increased statutory requirement of minimum paid

up capital as per Insurance Ordinance 2000. Some companies who were unable to raise this

capital have been asked to close down their operations. The Security and Exchange Commission

of Pakistan (SECP), Insurance Division, is trying to improve the image of Pakistan Insurance

Industry by issuing directives on financial security and transparency, code of good governance

and sound market practice

Key Player

The general insurance market comprises two segments Private Sector and Public Sector. Private

Sector is composed of 42 Local companies (29 are active) and 1 foreign company. National

Insurance Company Limited (NICL) is the only direct insurer for public sector. Allianz-EFU Health

insurance company was set up as the first Specialized Health Insurance Company in Pakistan.

Despite a high number of players, growth in Pakistans non-life insurance industry remains

stunted. In contrast with India, where only 27 non-life insurance companies operate, there

were as many as 30 companies registered with the Insurance Association of Pakistan (IAP) at

the end of calendar year 2011 the latest year for which the IAP has released financial data.

This is despite the fact that the Indian economy is at least eight times larger than that of

Pakistan.

And yet, annual growth rates for the non-life insurance sectors premiums for the last three

years have been 4%, 9% and 13%, which are hardly impressive given high inflation in the

economy.

Experts believe that the primary reason why a high number of players have not translated into

overall growth in non-life insurance is their short-range business strategy, which is hindering

industry-wide expansion. According to Securities and Exchange Commission of Pakistan (SECP)


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Insurance Commissioner Mohammed Asif Arif, non-life insurance companies can broadly be

categorized in large, mid-size and small entities on the basis of the premiums they write every

year.

However, unlike players operating in any other competitive industry, an overwhelming majority

of small and mid-size companies make little or no effort to expand and grow into a large entity.

Top three companies can be called market-oriented in the real sense of the word, but most

mid-size non-life insurance companies are what we call group-oriented entities, Arif told The

Express Tribune in a recent interview.

Referring to companies such as Habib Insurance, Century Insurance, UBL Insurers, Saudi Pak

Insurance, Alfalah Insurance, IGI Insurance, Atlas Insurance etc, and the SECP insurance

commissioner said almost 60%-80% business of these entities originates from their parent

groups. They are interested in bottom line alone. They make no effort to increase their top

line, fearing they might end up signing bad business on unfavorable terms, he said.

As for the small companies, Arif is of the view that they lack resources to take big business,

which forces them to operate through banks mainly in small cities and suburban areas where

nobody buys insurance willingly. I believe that the way they have met their paid-up capital

requirement is questionable, he said, adding that they survive only by targeting those

businesses that buy insurance only to meet bank requirements.

The result is disastrous: the insurance company that offers a higher commission to bank staff

ends up getting more business. While big insurance companies offer banks a commission of

around 15%, small companies generally pay them as much as 35%-40% commission, Arif said.

Understandably, after doling out a considerable chunk of money as commissions, these small

insurance companies are left with little resources to pay their claims and establish an effective

administrative setup which, in turn, lead to non-compliance issues.

When we issue notices, these companies go to court against the regulator. They manage to get

stay orders in many instances, and then the legal procedure goes on for years. Meanwhile, they

keep siphoning off their equity while hurting their clients interests, Arif noted.

No wonder that the non-life insurance industry is dominated by the three largest companies.

According to IAPs data for 2011, Adamjee Insurance, EFU General Insurance and Jubilee

General Insurance had a collective stake of 65.3% in the private-sector, non-life insurance

market of Rs43 billion.


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Volumes may have increased, but their margins are shrinking, Arif noted, adding that margins

of the core business of non-life insurance companies have now decreased to just 3%-4%.

CORPORATE PROFILE

The Company was incorporated on September 2, 1932 and is engaged in non-life insurance

business comprising of Property, Marine/Aviation, Motor and other miscellaneous products.

The shares of the company are quoted on Karachi and Lahore Stock Exchanges of Pakistan. The

Principal place of business is located at EFU House, M.A. Jinnah Road, Karachi, Pakistan.

The company operates through 61 branches in Pakistan. EFU is one of the few Pakistani

organizations that are operated by professional management and highly motivated field force.

Rating: Insurer Financial Strength AA, Outlook: Stable (Rating Agency: JCR- VIS)

Client-base comprises of many leading business houses and multinational companies.

A unique feature of EFU is a voluntary review mechanism by professionals of international

repute. The independent reviews by these professionals enable the company to keep abreast of

international changes in the industry as well as ensure that management adopts the best

international practices.

Another pillar of EFU's strength is its very close and long-term relationship with its reinsurers.

EFU gave the emerging insurance industry the leadership, the manpower and the drive needed

to grow in a situation where at one time, three-fourths of insurance was held by foreign

companies The company has also taken the initiative to transform its Enterprise Information

System with an end to end solution comprising Oracle's latest technological software and

hardware as part of the infrastructure solution to meet Company's projected Online

Transaction Processing needs, keeping in view both the present requirements and future needs

such as Data Warehouse, business intelligence and Customer Relationship Management

System.


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Overview of Branch.

My internship Started on 11 June 2014 at EFU General Insurance LTD, S.I.T.E Division for a

period of 6 weeks, under the supervision of Mr Khalid Ashfaq Ahmed who is the Assistant

Executive Director (AED) of S.I.T.E Division after the Senior Executive Director Mr. S.M Haider.

In my Capacity as an internee, I experiences and learned a lot of things that are hard to define

at once because all the departments and branches were so well linked, well integrated and

aligned in a perfect manner that it becomes hard to individually define the function of one

department in isolation. However I have approached my internship report in a diligent manner

and all the information provided in this report are to the best of my knowledge and

understanding.

EFU's operations are huge and dynamically rich. They have a vast client data base, because of

its good reputation in the market, EFU has become the market leader. And with great power

comes great responsibility. EFU General LTD is now leading in the market with the most

competitive premium rates and the best services to its clients. With extremely satisfied

customers, EFU is now the first choice of every client. EFU also has international clients and an

international client database through which EFU has now access to international market as well

however indirectly in terms of reinsurance and agents

EFU General Insurance LTD, S.I.T.E Division is one of the highest premium grossing branch that

brings revenue of 10 billion annually to the company. S.I.T.E Division is one of the most efficient

and effective branch throughout the branches spreaded allover Pakistan. The greatest hub of

EFU branches and divisions however is Qamar house, Tower, where most of the southern

divisions and branches are located within one big building that is known as Qamar house.

Each department is dealt by different HODs however all the departments work in harmony and

are well synchronized at EFU General Insurance LTD, S.I.T.E Division. Mr. S.M Haider, SED at

S.I.T.E Division is supported by Mr. Khalid Ashfaq (AED) as the second in command. All the

HODs report to Mr. Khalid Ashfaq or S.M Haider as the situation may demand. A good

hierarchical order has given an edge to S.I.T.E division over other branches. It has a well

organized, well managed and well maintained hierarchical order which makes communication

and correspondence efficient and reliable.

There are essentially 4 departments at EFU General Insurance LTD, S.I.T.E Division.


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Underwriting Department

General Underwriting Department

Leasing underwriting Department

Claim Department

Accounts Department and

Marketing Department.

.


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Overview of the Departments.

Underwriting Department

The underwriting department essentially consists of 7 sub-departments which include

1. Motor Underwriting

2. Marine Underwriting (Marine Aviation and Marine hull)

3. Fire Underwriting

4. Property Underwriting

5. Engineering Underwriting

6. Miscellaneous Underwriting and

7. Bonds

Each policy underwriting is conducted by separate skilled individuals in the underwriting

department.

Motor Underwriting

The underwriting of motor vehicles usually starts from a request from the client. Before issuing

the policy the client needs to fulfill certain criteria which are set by the company. For example

125 cc motor cycles are not insured, any vehicle which is 10 years old is not insured, and

commercial vehicles such as transport buses are also not insured.

The company makes it compulsory for risky vehicles to be installed with a tracker such as coure,

corolla and mehran etc. (2011 onwards models) to be installed with a tracker. However

Company makes it easy for the clients and provides the installation of tracker itself however at

an IPT (Insurance plus Tracker) rate.

Company's policies for motor vehicle insurance are very flexible and differ from case to case.

Usually these criteria depend on the corporate profile of the client. While the company is

usually indifferent with private policy holders.

After the request of policy a detailed inspection of the vehicle is conducted where all the

information regarding the vehicle is recorded in writing and in photos for future usage in case a

claim comes up for the vehicle. This information Includes Chassis Number, Plate , Engine

Number, Registration Number , Photos of the entire car, ID card of owner , Registration book

of the car etc.


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After inspection the client's case is entered into the Company's data base and permission

number is generated by the Consent of HOMD (Head office Motor Department) and the policy

is generated. This includes a policy schedule and a certificate of insurance which has to be in

tagged into the vehicle.

Marine Underwriting

In Marine Insurance coverage is provided for goods in transit for both Import and Export and

the mode of conveyances on waterways, air and land routes Marine Cargo Insurance is divided

mainly into three segments

Import: The goods are covered from warehouse to warehouse the contract is usually on C&F

and CIF basis.

Export: The goods are covered from warehouse to warehouse. The contracts can be CIF and

FOB basis.

Inland Transit: The goods are covered from anywhere in Pakistan to anywhere in Pakistan

There are quite a number of other marine risks, such as Ship breaking, Legal Liability and Ship

Owners' Liabilities, Terminal Operators Liability Insurance. These represent small but important

areas within the specialized field of Marine Insurance.

Fire Underwriting

Fire underwriting deals with the losses caused due to fire to the industrial, commercial and

service activities, including transportation, oil production, manufacturing, engineering, banking,

and other miscellaneous services. The business written ranges from simple commercial

property risks to the largest and most sophisticated industrial and energy risks.

Usually along with fire some additional perils are also covered at a very cheap premium rates.

For Example

Riot and Strike Damage

Atmospheric Disturbances

Earthquake fire and shocks

Aircraft damage

Explosion

Impact Damage

Burglary


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Electric Clause B

Just as we had inspection process during motor underwriting, in fire underwriting department

we have a risk assessment process of the underlying factory or property. A risk management

team visits the site and assesses various precautionary measures and possible threats of fire

with in the property. This process subjectively assesses the risk of fire to the site of insurance.

For example the Risk assessment team may look for

Fire extinguishers, Partition wall, Iron gates.

Housekeeping standards, Conceal wirings, lighting standards.

Boarding like Emergency exits, No smoking zones, Fire alarms and smoke detectors etc.

Security, CCTVs, guards, Work permit cards and the surrounding of the factory.

After risk assessment process a very detailed inspection report is issues which analyzes the risk

subjectively and sends it to HO to decide on the premium rate.

Property Underwriting

EFU covers both medium and large industrial and commercial risks relating to property,

including energy complexes.

Scope of coverage is fire and allied perils extending to all risks including difference-in-condition,

with both physical damage and business interruption.EFU leads on a number of major industrial

energy accounts and industrial property risks.

Engineering Underwriting

Also known as Machinery Breakdown or Plant All Risks Insurance, this type of insurance

provides very broad cover for damage to electrical and mechanical machinery.EFU insurance

offers following covers in this regard:

Erection all risks insurance :Erection All Risk Insurance offers comprehensive and adequate

protection during the period and stages of erection of the machinery, plant and steel structures

of any kind

as well as third party claims in respect of property damage or bodily injury arising inconnection

with the execution of an erection project.

Contractor's all risks insurance: Contractor All Risks Insurance offers comprehensive and

adequate protection against loss or damage in respect to contract works of civil engineering

projects, construction plant and equipment and construction machinery as well as third party


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claims in respect of property damage or bodily injury arising in connection with the execution

of a construction project

Contractor's plant and machinery insurance: This policy is developed for the contractors. It

offers comprehensive insurance to contractor's plant and machinery on an annual basis. It

offers loss or damage occurring at work, at rest or during maintenance or during the transit of

equipment and is not limited to a specific construction site.

Machinery insurance: By its very nature Machinery Insurance is an all risk "Accident"

insurance for machinery. It covers unforeseen and sudden physical loss or damage from causes

nonspecifically excluded, in a manner necessitating repair or replacement. Those items having a

short service life compared to the entire plant are normally excluded.

Boiler and Pressure Vessel Insurance: Boilers are devices which produce steam under high

pressure and temperature, which makes them highly risky and dangerous. Hence this peril

covers any damage or loss caused by explosion of boiler

Miscellaneous Underwriting

Just as the name suggest this is not a particular type of Insurance as fire, motor, marine etc are.

It includes all those insurances that can be classified separately such as personal accident,

liability etc. All the other form of perils which may cause loss is covered in miscellaneous

Underwriting Department.

Following are few types of Miscellaneous insurance that are issued by EFU insurance]

Workmen's compensation

Travel care (EFU travel insurance)

Personal accident Liability

Fidelity insurance

Bankers blanket.

Locker insurance.

Cash in transit and cash in hand.

Plate glass insurance

Golfers insurance

Credit card insurance

Livestock.

Crops.


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Liability Insurance.

Professional indemnity.

Bonds Underwriting

Historically many companies have approached banks when requiring a bond. A bond is not a

policy of insurance but is in effect a form of financial guarantee. It is a guarantee by one party

(the surety or guarantor) to another party (the body requesting the bond) that a third party

(the company requiring the bond) will meet its contractual obligations.

Following are the types of bonds policy issued at EFU

Bid Bond

Performance Guarantee

Bond Mobilization Advance

Bond Retention Money

Custom guarantee.

Claims Department

The amount of policies issued covering all the perils is drastically greater than the number of

claim calls received on average hence in the claim department there are no separate

department for different types of insurance policies. All the claims are altogether dealt by a

very strong and energetic team which works under Mr. Asghar Abbas, SVP Claim Department,

S.I.T.E Division at EFU.

The Claim process starts with a claim call or which is more technically known as intimation.

There are various ways intimation could be received for example by call, SMS, Email, and FAX.

Soon after the intimation is received the concerned authority asks for the policy number which

is then tracked and verified for the validity of the policy and expiry. After verification surveyors

are appointed for pre-inspection which under the insurance act are government licensed and

are hired by EFU who physically visits the site and verify the event. After which the claim

department roughly records the claims in order to generate a loss number and a file is opened.

Once a claim has been filed and, when applicable, after any additional documents that are

required to process the claim have been received, the file established by a company contains

the following documents.

Intimation letter

Claim form duly filled and signed by insured


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Claim filing number

Policy number;

Name of the policyholder/claimant/beneficiary;

Summary sheet showing development / review of the claim;

Type of insurance concerned;

Opening date of the file;

Date of loss;

Reporting date;

Description of the claim;

Information on claimants

Assessment date

Electronic and/or paper copy of the adjustors and investigators reports where

applicable;

Identity of the adjuster;

Estimated cost of damage

Dates and amounts of payments;

Date of denial, if applicable;

Name of intermediary, if applicable;

Date of file closure;

Documents recording contacts with the policyholder/claimant/beneficiary

After this process a team of agents , surveyors and engineers is appointed which are

outsourced by EFU in case of large loss exceeding 25,000 , for example Rehan Mobin surveyors

is one of such companies which provides inspection of the loss. These Surveyors now handle

the case themselves while keeping EFU in correspondence all the time. A full detailed

inspection report is approved and provided by the surveyor to EFU. The inspection report is

compiled in accordance with the policies of EFU which includes the collection photographs,

Legal documents (in case of motor claim) such as Claim form, Driving license, NIC, Registration

book etc and estimation of the loss by the surveyor company.

Soon after the inspection report is verified, the process of settlement starts where the client

and EFU are in correspondence directly. Settlement of the claim is agreed mutually as to

minimize the loss of the client as per the policies of the company. The company tries to

indemnify the client to the maximum extent. After the settle amount is agreed the process of


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voucher capturing or more commonly known as Claim Disbursement Voucher (CDV) as a

payment voucher to the client. The CDV goes to the accounts department where a cheaque is

issued in the name of the client, however before dispatching of the cheaque the concerned

authority and officials at Claim Department verify and sign the cheques to be received by the

clients.

Responsibilities of Accounts Department (My view)

The function of an accounts department is to look after the finances of the Branch S.I.T.E

Division. This can be anything from paying bills to making sure that the employees that work

forth company get paid. The four main accounting functions are:

Making Payments: Making sure that all bills and claims are paid by the company, on time and

also at the least cost possible. If there is a discount for paying quickly, the accounts department

will usually pay the bills as soon as possible so that the company spends as little money as they

possibly can. They are responsible for all outgoing payments and making sure that what they

are paying is correct.

Payroll: The accounts departments have to ensure that the employees are all paid correctly

and onetime. They also have to make sure that all of the employees are paying the right

amount of tax and that they have not made any mistakes with tax brackets and government

payments on behalf of the employees.

Receiving Payments: The accounting department must also receive payments and make sure

that these are all processed correctly. These will all be payments for the services or products

the company has provided and they must ensure that they have paid all relevant tax. There will

also be an element of chasing up payments and making sure that all of the payments arereceiv

ed when they should be.

Budgets: They are also responsible for giving budgets and estimates of what they feel the

company should be spending. These may be split by department or function and they must also

predict budget figures for years to come so that the company knows what it should be

spending and more importantly, charging to customers.


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Account Department Activities at the S.I.T.E Division.

S.I.T.E Division essentially maintains 3 accounts which are as follows

Collection Account

General Disbursement Account.

Claim Account

The Accounts Department Activities are as follows.

Issuing receipts of premiums and other payments.

Cheaques and Cash deposited in bank

General disbursement, making payment of agent commission, tracker payment

(Reconciliation and checking) and various other payments.

Claim disbursement, making of claim cheaques.

Journal Voucher- internal adjustment of accounts from head office and other

branches.

Adjustment of premium, claims and various rectification

Maintenance of petty cash.

Maintenance of office stationary.

Other task includes recovery of premiums from client after due coordination,

Settlement and adjustment of premiums to coinsurers.

Fund management and making fund transfer and pass contra voucher of funds

transfer and bank charges.

Bank reconciliation of all accounts.

Maintenance of premium deposit accounts (Cover note).

Maintenance of general/sub. Ledgers.

.

Marketing Department

Due to short duration of my internship I was unable to get familiarize with the affairs of the

marketing department. However marketing department is the heart of S.I.T.E Division because

it consists of an extraordinary team of agents whose primary task is to bring business to the

branch. It was because of the marketing department that the S.I.T.E division managed to

generate the highest revenue and met all the sales targets effectively and efficiently which

made S.I.T.E Division the highest grossing branch ever amongst all the branches.


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Description of the Task Assigned during Internship

A major part of my internship was educational rather than practical. The overview of the

departments in the previous section can be interpreted as my education knowledge acquired

during my internship. However various tasks were assigned to me from time to time.

Week 1, 2, 3

During my time at Motor underwriting department I was assigned to generate policy schedule

by Mr. Asif Rasheed. I took various calls from clients and made few policies for Mr. Asif

Rasheed, the purpose of this task was to get familiarize with the oracle software and to

understand the procedure a policy goes through in the underwriting phase. Mr. Asif Rasheed

also explained me the formula of calculating premiums manually to provide me with a better

understanding of the calculation. I was also assigned to pack the policy schedules and

certificates of insurance after putting official stamps on them and then to put them in the

courier box to be dispatched to the clients. I was also given the task of reconciliation of the

policies which were sorted out to be expired by Mr. Sohaib, Assistant Manager at Motor

Underwriting.

I was also assigned to read the law of insurance book published by Insurance Association of

Pakistan which was provided by Mr. Khalil Ahmed , Manager at fire and property department.

Various Risk Assessment reports of factories such as ICON pharmaceutical company were given

to me in the Fire underwriting department were given to me to study and point out any

mistakes which needed a deep analysis. This particular task aimed to hone my Risk

Management Skills.

During my stay at marine underwriting I was assigned to study a cover note of Ufone goods in

transit policy which was cancelled soon after its creation.

Week 4 and 5

I served my 4th and 5th in the claims department and during my stay there Mr. Noor , Manager

Claim Department was supervising my activities . I was assigned to fill the intimation form in to

the system and notify the clients through SMS system of EFU that there claim has been entered

into the database and appropriate measures are taking place to suite the clients. Further I was

asked generate the loss number and open the file of the case by pasting the claim form on the

cover page of the file. Mr. Omran, Manager at Claim Department provided excellent


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explanation of the processes involved in claim department and how files and records are

maintained so that they can be tracked easily in times of need.

I was given various solved cases to study by Mr. Omran for each peril for example motors, fire,

marine and engineering. After studying those cases Mr. Omran beautifully explained me each

step involved.

Week 6

I served my 6th and final week in the Accounts department where Mr. Mohammad Naseem

was my supervisor. Various tasks were assigned to me which included bank reconciliation and

to tele monthly premiums with head office records. I was assigned to study the financial

position of EFU and provide a brief analysis to Mr. Naseem.

Other Task

Other task were also assigned to me by Mr. Talha Sher , HR manager from time to time which

includes various assignments and office work. These are as follow:

Assignments:

Principles of insurance (it was intended to educate us with the nature and function of

insurance companies).

Job Ads (This was more related with HR department).

10 most frequently asked Interview Questions (This assignment was intended to hone

our intellectual abilities while giving interviews).

Difference b/w C.V and resume and 5 C. V and resume on different fields.

Office Work:

Compilation of the Certificates that were to be provided to those who attended the

seminars.

I was sent to give invitations throughout the Qamar house of the workshop which was

conducted on Travel Insurance.

Checking quiz papers after the completion of the seminar.


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SWOT Analysis

Strengths

EFU has a broad Customer base; because of its good reputation EFU Company has

managed itself with huge customer outlay who are loyal to EFU as they are satisfied

from EFUs services.

EFU provides Market Competitive rate and it also has the capacity to go below the

market rate benchmarks when it comes to premium rates which makes it a market

leader.

An average employee has been working at EFU for about 15-20 years, Employees here

are immensely experienced and at a senior position in the market. Generations of

families are associated with EFU.

Employees loyalty to EFU is the key factor to create and provide quality services.

EFU own two prominent buildings in Karachi and Lahore.

Financial leverage allows EFU to use their balance sheet to expand their business and

increase profit.

EFU educates and hone the skills of its employees through consistent training and

workshops at its own expense.

Weaknesses

Work inefficiency, although employees are senior and experienced but they are

inefficient towards the use of computers and new technology.

Nepotism.

Week Compliance.

High debt burden.

Gray areas in the management .

EFU is over employed.

Opportunities

Online marketing offers EFU general insurance the ability to expand business at little

cost.

A recent ISO certification opens international doors for EFU.

EFU is leading in insurance because of lack of competition and economies of scale,

however EFU is currently considering its expansion in the takkaful insurance industry.


27

Greater innovation to produce unique product.

Emerging market.

New technology helps EFU to meet customer better need.

Threats

Bad economy can hurt EFUs business by decreasing number of potential customer.

Volatile currency makes EFUs investment difficult, because cost and revenue change so

rapidly.

Politics can increase EFUs risk factor because government can quickly change business

rules.

EFU has a very tough competition in the international market.


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Conclusion and Recommendations

As it was my first experience to work in practical environment, I gained a lot. I learn how to

sit in professional environment; it is all because of the people out there helped me a lot.

From all six weeks that I spent there I understand that the organization have very strong

roots in market. It should rightly be called as a giant of Insurance Market. Based on its

financials I can surely come to a decision that the solvency position of the company is very

sound. But current political position has affected it

badly. After spending six weeks at different departments of the EFU, interacting with the

employees, getting their views, observing the organizational structure and design, I have

come up with the following suggestions that in my view, will definitely improve a

few weaknesses observed in the EFU by me.

Permanent hiring: The fresh hiring should be made permanent so that they are secured of

their future. Further the allowances and perquisites attached with the permanent jobs will

also increase the motivation level of the employees. As I observed there one hiring was

made during my internship, and that was the first hiring in last 5 years and the guy

appointed was not permanent. He was on Temporary basis.

Job training programs: The EFU should place emphasis on the organization of effective

training and development programs for its new as well as existing employees so that these

are gradually updated regarding the recent developments in the field of Insurance. As far as

I observed the persons employed there were not known to insurance as thoroughly as they

should being an insurance person.

Perquisites and allowances: The number of allowances and perquisites for the employees

should be increased to ensure that they put their body and soul in the jobs assigned to

them. As far as I observed they were not being awarded as they should. Their basic salary

was very low.

Adoption of effective technology: The current computer system used by EFU is quite

efficient how ever there is further room for efficiency in the technology used by EFU.

Decentralization: The higher authorities should form team-based management rather than

centralized management. It would result in improvement in uplifting the morale of the

employees. They will be more motivated and involved in all their operations resulting in

overall effectiveness of the organization.


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Works Cited

EFU. (n.d.). http://www.efuinsurance.com/ourBeginning.php. Retrieved from

http://www.efuinsurance.com/ourBeginning.php:

http://www.efuinsurance.com/ourBeginning.php

http://www.efuinsurance.com/newsletter/pdf/issue88_pdf/page6.pdf. (n.d.). Retrieved from

http://www.efuinsurance.com/newsletter/pdf/issue88_pdf/page6.pdf

internship report by shaikh mujtaba ali

Documents

internship internship

efu general insurance

insurance policy

insurance contracts

shaikh mujtaba ali id

sick leave

casual leave

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