State Life Insurance

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We shall guide who strive in our cause to the path leading to us. Surely ALLAH is with those who do well. (AL-ANKABUT).
DEPARTMENT OF MANAGEMENT SCIENCES IUB
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DEDICATION.
Dedicated to my beloved country and to the people who devoted their lives for the freedom of this country.
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PREFACE.
The contribution of the service to the Pakistani economy is increasing at an extra ordinary rate and the present financial services revolution looks certain to reinforce that trend considerably. The context does not claim to exhaustive and the balance must inevitably be open to criticism, but in attempting to give a general insight to the casual inquirer, the needs of those seeking in-depth
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knowledge within particular areas must inevitably be sacrificed. This report covers a detail and analytical view of the State Life Insurance Corporation. As the title that this report is the essence of the hard working which I have done during my internship tenure. This report has been written in the hope that it will help anybody, who read it carefully to obtain a real understanding of the basic structures, functions and techniques of the different departments of State Life Insurance Corporation. The report is long and wordy. I hope that the report is relatively free of errors and will appreciate if errors are brought to attention.
UBAID-UR-RAHMAN.
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ACKNOWLEDGMENT.
I thank all mighty ALLAH, the beneficent and the merciful, who gave me a chance and enough power to write this report. I want to express my gratitude and thanks to the Zonal Head Mr. Tufail Ahmad Ch. , Mr. Ishfaq Abbasi Deputy Manager PHS and specially Mr. Imtiaz Ali for enabling me to devote part their precious time in the presentation of this report. I feel it my bounded duty to acknowledge with deep gratitude and invaluable help extended to me by my respected teachers and friends. I am especially grateful to Mr. Nazik Hussian for his encouragement and guidance to complete this report. All the additional typing was elegantly effected by Mr. Shoib Akbar, who showed considerable cruptographical expertise, not to mention immense patience, in making some sense out my untidy and much annotated scripts. To all these I can only say - Thank You. I hope that the end product is not totally unworthy of the time and efforts they most generously gave.
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UBAID-UR-RAHMAN.
Table of Contents
1- Company and it's Introduction. 2- Mission and Objectives. 3- Organizational Structure. 4- Divisions. 5- Departments. 6- File Movements.
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7- Customer and Products. 8- Bonuses. 9- Supplementary Contracts. 10- Basic Salary and Grading. 11- Calculations. 12- Marketing Channel. 13- Selling Process. 14- Managment Stretagies. 15- SWOT Analysis. 16- Competitors. 17- Ratio Analysis.
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INTODUCTOIN Insurance. Insurance Companies. Insurance Evaluation. Life Insurance in Pakistan. State Life in Pakistan. State Life in Bahawalpur.
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INTRODUCTION
Ins uranc e
Insurance means that the Probable loss occurring in future can be so shared that the overall impacted of total loss to any individual or section of the society is mitigated. Insurance can be of life for the compensation in case of normal or accidental death or of property like car, bus ship, airplane, etc. in case of loss caused by fire, floods, earthquakes etc. insurance provides compensation for the loss to a maximum extent.
His tory of Ins uranc e:

The need of sharing losses caused particularly by sea perils was left several hundred-year ago. The merchant ships remaining away for months with valuable cargo carried with them the hope of marketing profits upon their safe return. The perils of the sea however, inflicting extensive damage to the ships and the goods loaded on them resulting in sometimes the total disaster ultimately caused great concern to those involved in the business. They consequently jointed hand to the way out and thus insurance was found to be the only possible means to save individual from total disaster. This idea originated from China and then developed by England and other European countries. In the beginning merchants used to sit together and for certain define amounts, members used to sign documents accepting their share of risk in the ships or cargo carried. This initial arrangement finally developed to highly skilled and most scientific ways for
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assessment of risk and underwriting and still countries. The persons signing in acceptance of their shares are called underwriters.
Life INSURANCE:
Life insurance is a contract whereby the insure promises to pay, in exchange of certain premium, the sum insured, on the completion of a definite period, or on the death of the insured person. There is a difference between life insurance and other forms of insurance like fire insurance, marine insurance automobile insurance etc. covering immediate financial and economic losses. In life insurance, it is not easy to ascertain with exactness the total impact likely to occur due to the death of the person. The of as values the possible placed financial workable on the life for possible a great assessment extant and repercussions solution for
anticipated as a result of death, nevertheless, are related to maintaining source of income to a maximum possible extant. In short when a man dies, not only he but either the entire source of income dies if he is only responsible for producing the income for the family or important part of source of income for the family, for the family, in such case life insurance takes over the liability and the responsibility of meeting family needs.
BENEFITS OF LIFE INSURANCE

Finacial Protection Necessary Saving Property Building Loan Facility
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Eduction and Marriage plan Income Tax rebate Retirement Fund

STATUE UNDER WHICH CREATED:-
Life insurance (Nationalization) order, 1972 (Presidential Order X of 1972)
Date of incorporation : November 01, 1972
Legal status: Autonomous coporation under the control of the ministry of Commerce, Govt. of Pakistan.
Principal Office:
State Life Building No.9 Dr. Ziauddin Road Karachi, Pakistan.
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MISSION OF STATE LIFE INSURANCE
CORPORATION
To ensure satisfaction of our valued policy holders in processing new business providing after sales services and optimizing returns of life fund through our quality at culture the and to life
maintain
position
leading
insurer in Pakistan. OBJECTIVES OF SLIC Following are the objectives: To run life insurance business in sound
lines,
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To
provide
more
efficient
services
to
policyholder, To maximize the return to policyholders by economizing on expenses and increasing the yield on investment, To make life insurance a more effective
means of mobilizing national savings, To widen the and area of it the into efficient man operation available of to life as as the of and
insurance large a
making of
section
population from sections in town
possible,
extending more
comparatively society villages, to the
common
To use th3e policyholders funds in the wider interest of the community.
History of Life insurance In Pakistan:

Before partition, there were only three major insurance companies named Christian Mutual, Muslim and eastern Federal Union transacting life insurance through their Head Office in the ears, need which for ultimately having a formed Pakistan. The
composite
insurance
company particularly for Muslims was felt by
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some
of
the
eminent
Muslim
personalities.
And Eastern Federal Union Insurance Company was established Muslim in 1932 by the struggle The of
those
personalities. of
Muslim was
Insurance
Company
Pakistan
established in 1949. Before 1972, the there nationalization was a big of companies in
competition
between
companies involved in life insurance business in Pakistan as there were the more than thirty
companies Upon
offering
insurance of life Life to
facility. insurance Insurance entire to life
nationalization in 1972, was
business
State
Corporation liabilities
formed as
take related
and
assets
they
insurance business. Starting with three units A,B and C, it was soon merger into a single
corporation. Now including Bahawalpur Zone, there are thirty zone of Stat Life Insurance
Corporation are working in different parts of the country with Head Office at Karachi. In Pak , life insurance business was
nationalized by Govt., Order in March 19, 1972
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and in fact this was an important step toward economic development in the history of Pak. The nationalized process was completed in
two phases.
In first phase
(March 19, 1972),
the Govt. has taken over the administration of 32 companies. After this, these were handed over to trustee and sub-trustee in accordance to life insurance nationalization order 1972. In the second 1, phase a came of nationalization corporation, existence by
(November having
1972) units,
single into
three
the name of State Life Insurance Corporation (SLIC) of Pakistan. These three units, constituted by merging of one or more as A,B of (A,B insurance and the & C) C life companies, units. For were further in Pak,
named
improvement these units
business merged
were
together
and converted into zones. SLIC life has enjoyed till a complete when local monopoly the Govt, the had
business to
1990 it to
decided
open
private
sector
insurers. At present , besides SLIC, there are four other life insurers operating in the
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country including two foreign companies. The state Life Insurance Corporation is reinsured by foreign insurance Swiss RE
(Switzerland).
REGIONAL & ZONAL OFFICES
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REGIONAL & ZONAL OFFICES

Regional Office Zonal Office Lahore (Central) Lahore (Western) LAHORE Region Faisal Abad Sargodha Gurjranwala Sialkot Karachi (Southern) KARACHI Region Karachi (Eastern) Karachi (Central) Hyderabad Mir Pur Khas Larkana Quetta Rawalpindi Mir Pur RAWALPINDI R e g i o n Islamabad Peshawar Abbottabad Swat Gujrat Multan Sahiwal Multan Region
Rahim Yar Khan Dear Ghazi Khan Bahawal Pur 17
105 DEPARMENTS:-
1- Agency Adminstration Department. 2- Human Resources Devolpment Department. 3- New Buisness Department. 4- Policy Holder Service Department. 5- Budget and Accuonts Department. 6- Personal and General Services Department. 7- Marketing Department. 8- Audit Department.
NEW BUSINESS DEPARTMENT

New Business (NB) is considered the soul of Insurance companies. Profitability and
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survival NB.
of
the
business
depends
on
the
FUNCTION OF NEW BUSINESS

In this department, as the name shows, new contracts start between proposes and Insurance Company. Proposes is a person who applies for the insurance protection. Main function of the NB is underwriting. This department the new is responsible for
processing
business
introduced
by the sales force right from receiving a proposal policy has on the counter to the to mailing the It the
document various
policyholder. to perform
section
different task relating to the acceptance or rejection of risks for life insurance,
the proposal are received and initially is checked in all respects i.e. completion of al columns and then processed by the
underwriters depending upon whether they have or been introduced under the medical risk is
non-medical
scheme.
The
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assessed factors:
keeping
in
view
the
following
Personal physical health, prospect. Moral
data, and family social
occupation, features, of the
history
hazard,
source
of
income, between
nomination,
relationship
the nominee and the prospect. Previous life insurance history of
the prospect if any. Field officers or sale
representatives report form. Financial of underwriting its included in
confidential the proposal
i.e. and
source proof, the
income,
legality
relationship
between
prospects income and sum assure. In case of non-medical scheme, the
prospects own statement and filed officers or sales representatives reports have more
importance.
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After
this
assessment,
the
underwriting
decision is made which may be acceptance of a risk at ordinary rated or with loading,
calling additional evidences relating to health or financial status or of the prospecting way for a
define
periods
straight
declination.
Premium rates, installments are then checked and first premium receipts are issued to the field force, and concerned department like
commission payments, agency administration, computer division and marketing. This is brief terms are the function on the new business
department. This is also a key function as the underwriters are responsible for the financial health god of the life institution. promote in By accepting and
risks
they
profitability the
growth
which
help
meeting
financial
obligations of the life institution towards the policyholders, government. its employees and the
WORKING OF NEW BUSINESS

The precise working of NB department is as follows:
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PROPOSAL NUMBER
In order to fulfill the recognition of the insurance policy, NB department allocates a number t each insurance policy for
future references. NB department verifies whether the client is a new customer or a past customer.
UNDERWRITING
Underwriting is the process through which the underwriter with the assesses Insurance the the risk
associated Underwriter
Proposal. personal
verifies
information provided in the Proposal form (See annex. No.1). If he feels that client should have a medical checkup then SLIC has its own penal of doctors to provide
medical assistance.
PREMIUM CALCULATION
After underwriting is the premium in of Sum Brief Assured calculated Policy
Sheet (see annex No.2) in according with the rate book provided by the SLIC. The
policy fee is charged of Rs. 100 or Rs 2.5 per thousands of sum assured whichever
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is
less.
Further
the are
rates added
of in
supplementary premium.
contracts
POLICY ISSUE SECTION

After premium calculation the insurance and revenue stamps are embossed on the policy bond and the policy d documents is sent to client (See annex No.3) one copy of policy document is sent of (PHS)
department of record purpose.
UNDERWRITING GUIDELINES
Taking of Authentic Age Proof Verification on Nominee Relation with Policyholder Analyzing of health and financial
status of Prosper. Verification of stated information on
Proposal Form. Requirement Tests. Analyses Tests. Analysis of health history and family of Medical Reports and of Medical Reports and
background.
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Others requirements.
BUDGET DEPARTMENT
&
ACCOUNTS
This department deals in: Cash Collection Cash Disbursement Salary Preparation Budget Preparation Inter-Zone Transaction Agents Commission Imprest
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CASH COLLECTION:
There are two mode of cash collection i.e., by Cash and by Cheque. The collection is made for II
Renewal Premium and I .The premium is paid by cash in SLIC, and it is also paid by cheque. These cheques are sent to the department. These cheques are attached along with daily collection sheet (DCS) with full detail i.e. Bankers name, location, date of issue etc. and this sheet is sent to the SLICs authorized bank (UBL) in Bahawalpur for
collection.
CASH DISBURSEMENT:
For cash disbursement, singed the and first the by voucher is prepared, officer, is prepared to is whom authorized payment case of
for
person voucher in
the in
made.
This
audited of
having these
the
amount are
excess
Rs.10000. in
voucher
punched listings are
(feeding)
computer.
Voucher
maintained,
cheques are prepared, and these cheques are sent to concerned by daily party. the Bank Statement is
prepared regarding cheques
authorized and of
bankers of
total i.e.
coactions
payments
realization
cheques.
These
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banks
Statements The data
are in
punched
into
the Cash
computer.
floppy
regarding
Book and Bank Statement is sent to Principle Office (PO) in Karachi. P.O Zone and for Different these are lodgers sent to are SLIC
prepared
Bahawalpur
further
reconciliation.
Errors and commissions are corrected. Following list are prepared by this section: Data Encased. List of Cheques Issued (Cash Book) List of Unmatched Cheques of Bank & Wise Total List of Cheques
Cash Book Files. Along Daily with the above mentioned lists, a is
Cheques
Realization
Report
prepared in the following
manner: *** ** *** ** *** ** *** ** *** **

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Total No. Of Cheques Deposited in Dec. 19 Total Amount of Cheques Deposited in
dec, 19--Total No. Of Cheques Realized to day Total Amount of Cheques Cheques Realized Realized
Month To date(MTD) Total Amount of (MTD)

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Realization Ratio **
***
SALARY PREPARATION:
In B&A Department Salary of the employees is calculated. Different allowances are offered
to the employees. Loan facilities are availed for the employees. Tax is deducted from
Salary. A provision of recoveries of the loan is made.
Following are the addition to the salary of the employees: (see Annex No.) Basic Pay. Special/Technical Pay House Basic Rent Pay Allowance for @80% and and 75% of
staff
officer
respectively. Conveyance Allowance @Rs. 600 and Rs.
500 p.m. for officer & staff respectively. Car maintenance Allowance @ Rs.550 and Rs. 750 for, only staff, unmarried and
married respectively. Tea Expenses @ 7% of Basic Pay.
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The follows:
deductions
from
salary
are
as
Provident
Fund
(PF)
Contribution
1/12 th
of the Basic Pay. Union Subscription @ Rs. 50 and Rs. 30 for officer & staff respectively. Salary Advance Repayment (24 monthly
installments). PF Loan Installement-2 (50 monthly
installments). Pf Loan Installement-1 (26 monthly
installments). Convince Loan Recovery (40 monthly
installments). House Building Loan Installments. House Rent Installment (18 monthly
installments). Following are the different types of loans, which can be availed by employees of
SLIC managed by salary section: Two-Month Advance Salary. Loan-I against PF (3 Basic Pay).
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Loan-2 against PF (12 Basic Pay or 90% of Pf employee own contribution, whichever
is less). Conveyance Loan @ Rs. 55000 and Rs.
150000 for staff & officer respectively. House Building Loan. After (Additional purchased database. prepared preparation & of salary the the of loan payable data is
Deduction) into types total
(feeding) Different such as
computer lists are
payment,
allowances etc.
BUDGET PREPARATION:
Budget is prepared annually. Proposed Budget is sent to PO. The funds of different heads of proposed Office budget are transferred or First to Zonal It is
Bahawalpur that each
wholly year
partially. Year
assumed
Premium
(FYP) is increased by 25%. According to this
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base
the
commission
of
the
agents
are
calculated and budgeted. Following are the main types of budget: Income Budget Claim Budget Commission Budget Admin, Expenses Budget Admin & Claim Budget year Offices is estimated by
considering Zonal &
previous
actual have
expenses. separate from PO
Regional If are the less funds required. in
budgets. Karachi
funds than are The the
transferred the proposed
budget, PO is for cash made
additional whenever maintained
acquired Budget
from Register
department is debited expense and is
employee/party/expense is credited. No
additional
when the budget is in short.
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INTER-ZONE TRANSACTION:
There is separate section for inter-zone transaction in budget and accounts. Whenever any expense the is made on behalf is of any to other the
zone,
debit zone for
note that
issued
concerned
expense.
Similarly,
other zone can issue debit note to Bahawalpur
Employee Grade
1,2,3 4 to 7 7 & onward
Loan
age
Rate
(interest)
Rs. 150000 6 Rs. 200000 6 Rs. 2155000 10 (or Pay 30 Basic
whichever the expenses on
Zone
is
they
is high) have occurred
behalf of Bahawalpur Zone. The expense incurred on behalf of other zone can be claimed, salary, TA/DA, claim Meeting &
investigation expense,
expense, entertainment,
utility,
repair
maintenance, rent, Medical expense etc.
COMMISSION SECTION:In Section B&A Department, the the commission First
calculates
commission.
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Premium Receipt (FPR) is prepared by the New Business Department is sent to Commission
Section to calculate the commission of agent. It has four and copies, other one for commission for agents
section
three
(SR,SO,SM). The commission rates vary with the amount of FYP and term of the policy. The Mode Bonus is given to SR if the of premium FYP. installment Bonus is
annually,
@1.5%
Allied
is
given to SO,SR @4.35% of FYP P.A., paid

by monthly if they have 72% of II year persistency, 90% renewal persistency, 10 SRS and last year FYP of Rs.120000 and Rs.150000 respectively. Production Bonus is given SR,SO & SM if they have last year FYP of and
Rs.6000,Rs.15000, have minimum the
Rs.50000 of is II
respectively year
70% tax
persistency. @10% of
Further
deducted
commission from the commission of agents. In commission are given section on and different fulfillment targets to types of of loans
certain i.e.
requirements
agent
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Emergency Advance, Eid Advance, Conveyance Loan, House Building Loan.
COMMISSION RATES
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First Year Rate For Sales Representative Term Premium (Year) 20 14-Oct Rs. 1-3999 4000-5999 6000-7999 8000-9999 10000 above FOR SALES OFFICER Term Premium (Year) 20 10 To 14 1-19999 20000-34999 35000-49999 50000-74999 75000-above FOR SALES MANAGER Term Premium (Year) 20 10 To 14 1-49999 50000-99999 100000-1490000 150000-199999 200000-above 4.50% 6 7.5 8.25 9 15-19 5.10% 6.8 8.5 9.35 10.2 Above 6.00% 8 10 11 12 13.13% 15 16.88 18.75 19.5 15-19 17 19.12 21.25 22.1 Above 20 22.5 25 26 14.88% 17.50% 25% 25% 25% 25% 25% 15-19 30% 30% 30% 30% 30% Above 35% 35% 35% 35% 35% -2.00 2.50 3.0 3.5 Prod. Bonus
SECOND & ONWARD YEARS RATES FOR SALES MANAGER SR II Year Onward 10.00% 5 SO 2.00% 1 SM 1.00% 0.50%
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COMMISSION PAYMENT PROCEDURE:Following are three methods used by SLIC for payment of commission to agents: Payment by cheques Authority Card. Payment by Post. In first method, the payment is directly
made to the agent by cheques. In the second method, person the payment by is agent made by to other the
authorized
signing
Authorized Card (See Annex NO0.5) in the third method the commission is paid by post to his postal address on his direction.
PRIZE AND AWARD:The prize and award are given to field force who are achieved the highest FYP at any
time announced by SLIC.
EMERGENCY ADVANCE:It is given on to SO,SM on the previous For year SR
earning
the
renewal
premium.
previous 2 year earning become entitlement of loan.
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EID ADVANCE:Previous year total earning of SR,SO and SM becomes entitlement.
CONVEYANCE LOAN:
It is given to SO,SM only on the condition of having 5 year service association with SLIC and two guarantors. The loan can be taken up Rs.40000.
HOUSE BUILDING LOAN:

To obtain to this loan minimum association with SLIC is 15 years and pervious year
renewal premium becomes entitlement.
IMPREST SECTION:
Imprest is the additional privileges given to the employees (Area Managers). Annually,
the Imprest Entitlement is made for the AM by considering the previous progress in the business. Different Circulars arrive from PO to Bahawalpur Zone mentioning the different type of privileges on different FYP targets. These privileges are free petrol, telephone, electricity, clerk wage,
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stationary and other facilities etc.
POLICY HOLDER SERVICE DEPARTMENT

PHS is the abbivation of "Policy Holder's Service" department. As the name indicating that all the services for policy holder are performed here. We can also call these services, after sale sevices. It is the most busy department of SLIC in each zone. Every service process was taken very carefully in the last conference of SLIC. It was announced that every service would be completed within 15 days. Otherwise State Life pays restriction plenty to the policy holder. The head of PHS is also sitting in P.O, Karachi. His post is G.M, then each region contains D.G.M lastly the head of PHS deptt. in each zone is deputy manager. Followings are the functions performed in PHS deptt.
DEATH CLAIM
When a person dies, his relatives or heirs tell SLIC agent or directly to the zonal office. SLIC demands certain documents like 1. Application for disease. 2- NIC. 3- Disease and nominators are attested. 4- Death certificate from union council. 5- Original documents (ORs). Firstly deptt. manager or his colligue is appointed for the investigation of this case. He also
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checks FIR from the nearest Thana. If case is clear, then SLIC tries his best to give claim as soon as possible. In case of accident, same process and way of investigation is performed. The place of investigation is also checked by the investigators seriously.
SURRENDER
Another service of this deptt. is surrendering. If a policy holder wants to finish his policy due his cumpolsary need of money. Then he has two options. Firstly, he can take loan, from his own property. After requirement's completion he pays 13% interest and continues his policy. Secondly, if his need is not fulfilled with this amount then he can surrender his policy. But he can't gain all his amount because he is breaking the contract. Followings are the required documents. 1- Application. 2- NIC & attestation. 3- Original receipts. After all these completions surrender value is based on your cash value.
ALTERATION
When policy holder wants some changing in his term, sum assured then this changing is called Alteration of policy. e.g. A policy holder has a policy of sum assured 2,00,000 and he is not satisfied to this. He wants to increase it. This is called Alteration.
TERM CHANGING
A policy contains 20 years to be matured, but policy holder wants to decrease it. He thinks that after 15 years he would need this amount. This is another type of Alteration.
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123456-
Followings are the requirements for Alteration. Original receipts. Alteration fee = 25 Rs. Alteration performa. Form. Application. I.D. card.
NOMINATION CHANGE
3rd kind of alteration is nomination change. First a policy holder nominated his wife but after some time he gave divorce to her wife and now he wants another person for nomination.
FILE TRANSFER
If your policy record is in Multan zone and now you are in Bahawalpur. Then you can tranfer here by application.
MATURITY CLAIM
When a policy goes to its maturity, it means that its term is completed. SLIC sends a letter to its policy holder.If documents, original receipts, all premiums are right, then a healthy amount with bonuses goes to policy holder's account. Otherwise if you had taken loan and could not return 13% interest and having certain cash value in your policy, then this loan plus interest of that period would be deducted. All maturity claims goes to your account.
LOANING
Other facility of SLIC is loaning. You can get loan from your account. Most of the people are allowed 70% loan from their own accounts. In case of serious need 80% is allowed to be taken as loan. But with an emergency case and with the help of an authority you would be awarded 90%.
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But it is beneficial for policy holders to take a minimum loan from their account. e.g - if you take 70% loan, then 30% will remain in your account and its cash value will remain take it inforce for more time. If you take 90% loan, then only 10% will remain in your account and it will cover less time to take policy inforced. No deduction of Zakat from death claim. While Zakat is charged from both surrender and maturity claim.
REVIVAL
Charging of late fee or extra fee is called Revival, if the given premium date has been passed. Then till 30 days there is no extra fee, because these 30 days period is called grace period. Then from 30 to 90 days when you go to submit premium without late fee, then it may be demande "DGH" (Declaration of Good Health) by the head of this department. But from 90 days late fee will start. At this time PS (Personal Statement) can also be demanded. These all are the benefits of suspense accounts. But the loss of suspense account is, party will never get the claim. Because it is non-credit in account. Another term is Special Revival, which means if you have forgotted your policy after paying at least two premiums and then within 5 years it remains inforce, then policy holder has the chance
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to renew it, e.g., he is unable to pay the remaining premiums plus their late fee. Then he can renew it by the starting of runnig year. In other words if you got your policy in 97, then now it will skip to 2002.
CONSTITUTION OF CLAIM COMMITTEE
The claims committee of principal office for taking decisions on all the death & injured claims refers to the principal office is reconstituted as follows. 1:- D.G.M (PHS) P.O. 2:- Manager (PHS) P.O 3:- Manager (PHS) P.O 4:- Manager (Oversees) 5:- Manager (C&P) Division. Conveyor. Secretary. Member. Member. Member.
PERSONAL SERVICE
&
GENERAL
DEPARTMENT (P&GS)
The office & general matters are dealt in P&G Department. This department has the sole
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responsibility disciplinary Selection, employees
and action
authority of the
of
the
employees. of the the P&G in
recruitment, is the This main
termination functions of
Department. medical
department to the
also
deals
facility
office
employees,
leaves and similar other general services. The daily correspondence is dispatched in this
department. Following are the main section of this department:
MEDICAL SECTION:
All this hospitalization expenses are beard by SLIC provided that these are incurred in
approved hospital. The expenses of medicine are reimbursed. The reimbursement of
medicine is not allowed to staff (having grade 1 to18) but they are given Rs.600 p.a. in
shape of salary as medical allowance.
RENT SECTION:
When sale Manager (SM) is promoted to Area Manager (AM),he is categorized as A,B,C and he has entitle to have his own office at choice location at is the expense by of SLIC. the A his good after
selected
A.M.
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selection
of
place,
Zonal
Head
is
informed
about the location, by application written by A.M. this application is transferred to P&GS
Department for the analysis of location of the office. The Zonal Rent Committee (ZRC)
annualizes this location. A lease agreement is made with the landlord for the after analyzing and the
approved
map
location
property
registration form. The office rent entitlement for the categories of A,B,C of Am is Rs.2000, Rs.2000, & Rs.1000 P.M respectively.
CAPITAL SECTION:
This and section responsible of a is for purchase, & sale maintenance etc. (ZPC) furniture Zonal fixture,
equipment Committee
Procurement for the
constituted
purchase of assets. The assets are purchased from the suitable the supplier after by critically different
analyzing venders. Each year
quotation
offered
assets
are
depreciated
@10%
p.a.
the entry for the purchased assets is made in
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the
Register
for
Fixed
Assets.
Each
ear
the
closing balance is intimated to PO Karachi.
STATIONARY SECTION:
This section maintains the record of stationary such as paper, pencil, envelops, printed letters, form, calculators, dustbin, etc. whenever any department requires the stationary, the concerned department fills a Requisition Slip. The stationary is issued to the concerned department and it is recorded in the register.
LEAVE SECTION:
Following leaves: Casual Leave Medical Leave 20 days casual leaves are allowed to all employees in a year. The medical leave or are the main two types of
application leave is allowed for 48 days in a year. Unused leaves are accumulated and
after two years these leaves in excess of 180 das can be encased. In case of death all
leaves, not utilized, can be encased.
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PERSONAL SECTION:
All the employee matter such as appointed, promotion, demotion, transfer and allowances are dealt by personal section. Annual
Confidential Report-ACR (see annex N. 10 for ACR) the employees of are prepared, section, under by the the
supervision
this
departmental heads. For the appointment is initiated computer officers is or of in the the staff, an
advertisement Zonal Head is of
Newspaper. for this
authority done by
appointment office (PO)
Principle Office. Zonal
Karachi
Regional by
Selection
Committee
constituted
Head conducts a test and interview. For promotion of the employees, there ACRs are necessary and minimum three years are
required to remain in one cadre. Each year he employees are promoted by by the criteria PO and or
instructions
set
PO
Karachi.
Regional Office does promotion of officers.
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AGENCY DEPARTMENT
Service provided by the SLIC is intangibles and therefore are not acquired at the counter by the people, who need it, so it must be sold them through persuasive method. Field force of SLIC plays an effective role in selling of tangibles products (Insurance
Plans). In order to maintain the record of the field force agency The main department function of was this
established. department
includes
recruitment,
promotion,
and termination of the field force, allied and medical facility for field force. This
department
is also responsible
for insurance
and renewal of license to the field force.
RECRUITMENT:
The Sales Representative (SR) is appointed by SO/SM. The requirement and conditions for
the appointment of SR is as follows: Minimum metric. Age at entry must be than 18 years. Annual quota for SR is Rs. 10000. qualification is required
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105
Application for the insurance of license is necessary and it is renewed after
each 3 years. An Rs. and application 50, Form, along with of license fee
attested
photocopies Form is
documents to the
Nomination
submitted
agency department. A code number is allotted at the submission of application to SR and he can start working as agent of the SLIC of
Pakistan.
PROMOTION:
SR is promoted, and upon fulfillment on of certain of is is term condition targets, to SM and to achievement Similarly A.M. SO
business promoted
SO. to
and
SM
following
the criteria:
FROM SR TO SM:
Two years working as SR: Must have secured minimum Rs. 75000 FY during but immediate in any one preceding calendar two year,
years,
the FYP should be less than Rs. 25000. Must have at least 20 policies in force on different lives.
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Must
have
achieved
minimum
Second Year Persistency of 70% in the immediate preceding year. Must have achieved of a 90% minimum in the
Renewal
Persistency
immediate proceeding year.
FROM SO TO SM:
Must have working of minimum 2 years as SO. Mush have FYP two any secured in the minimum immediate years, but year
Rs.250000 proceeding the FYP in
calendar one
calendar
must not be less than Rs.60000. Must have at least 80 policies in
force in his/her organization; Must have minimum Second Year
Persistency of 70% in the immediate proceeding Year; Must have minimum renewal
persistency of 90% in the immediate proceeding year; Must have minimum 4 productive SR.
FROM SM TO AM:
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105
Must
have
working
at
least
for
years as SM; Must have secured the following total FYP for category A&B: A= Rs.45,00,000 B= Rs.36,00,000 And last year FYP must not be than: A= Rs. 20,00,000 B= Rs. 15,00,000
Number
of
policies
in
the
last
year
must not be less than: A= Rs.200 B= Rs. 150 Must have minimum of 70% in Second the Year
Persistency proceeding year
immediate second of the
year
and minimum of of 65% the
persistency year
previous
immediate
preceding year; Minimum sum; Annual quota must have: A= Rs. 30,00,000 2 SO should be qualified to
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105
B= Rs.18,00,000
TERMINATION & DEMOTION:

Any agent of SLIC, rules who & behave negatively, or indulge by violates fraud or the regulation can be
mal-practice,
termination
the Zonal Head. Any agent who fails to meet the annual quota of FYP is demoted to
immediate lower rank of the field force.
LICENSE:
The license to work as agent for SLIC is issued by the Controller of Insurance Karachi. At specific of time, a list of the field force is transferred to controller of Insurance Karachi for new and renewal of license. The list of
license fee is given below: SR (New License for Ist Year) SR (Renewal of License) SR (Renewal with late fee) SR/SM (Renewal of License) SO/SM (Renewal with late fee) Rs. 59 Rs. 70 Rs. 125 Rs.15 0 Rs.20 0
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List of Field Force in Bahawalpur Zone

Field Cadre SR SO SM AM No. Agent 571 189 73 11
HRD is the abrevation of " Human Resource Devolpment ". This dept. trained the field force to inhance the people. It teaches throughout the Marketing channel with their special courses. Followings are the courses for field forces, because this team is a front line of SLIC. Courses BTC BTC ADP MOP MOSL MMS ISR SO ISR SM , AM SO , SM AM,SM Marketing
HRD DEPARTMENT
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I have attended the BTC course. Following is the detail. Training and courses give the following benfits:1:- Professionality. 2:- Service Upgrading. 3:- Liklihood habits. 4:- Planning. Target attaining:Time. Income. Place. Following things are the key terms for a marketor. Before going into a market.
ACTION
A = Active. Thankful. I = Intelligent. = Noble. O = Organized. N C = Confidence. T =
KASH
K = Knowledge. A = Attitude. S = Skill.
CASH
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H = Habit. You can get all wishes with the help of these terms and then you can cash everything. If you are unable to hold it then this English " Cash " will change into Urdu " Kash ". Your basic target is S = Smile. A = Attitude. L = Love. E = Evaluation.
SALE.
BUDGETING (PRACTICAL PLANNIG)

Monthly Expenditures. Forecasting.
House rent
Utility bills Food , Dressing Transportation Customer dealing Other expenses Total. 1000 3000 1000 1200 800
3000
10,000.00
To cover these expenses you have to income through this forecasting.
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MONTHLY INCOME FORECASTING

Income Premium Policies Meeting Name obtained Working days Meeting / day 10,000 25,000 10 100 200 20 5
The main purpose of the course is " To think in advance " and this is the basic planning.
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INTERNAL AUDIT DEPARTMENT

This department plays a supervisory role of all of the all the other departments by checking done rules by and and the verification departments of all the working to the
according b PO
regulations
provided
Karachi
time to time. These rules and regulation are provided shape to all the Zone through circular. These Pakistan in are
of
circulars
attached in the book, which is called Key to PO Circular Volume. All working of the
departments are verification according to this book. In this way, the frauds, errors, and
omission are detected.
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TYPE OF AUDIT:
Pre-Audit Post-Audit When the audit it after is is done before pre-audit. is making Audit called
payments, conducted
called
making
payments
post Audit. Pre audit is conducted for all the big payments at such as of purchase policy, of assets, on for
payment
maturity
payment
death claim etc. all-to-day
Post audit is conducted such as
expenses
traveling
expenses, stationary etc.
CUSTOMERS OF STATE LIFE
1- EXTERNAL CUSTOMERS
External customers are those who have no link with SLIC. They are the common people which are the main target of sales force.
2- INTERNAL CUSTOMERS
Internal customers are infect those people who have direct or indirect link with SLIC. These are employees of the corporation and their relatives.
MARKETING PRODUCTS
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Table
0103040506070917181936737576in).
Name
Whole Life Assurance. Endowment Assurance. Progressive Premium. Three Payment Plan. Joint Life. Child Protection. Single Premium Endowment. Optimal Maturity. Rural Life. Jeevan Sathi. Shad Abad. Sunehri Policy. Child Education and Marriage(built in) Child Education and Marriage(Non built
N.D.SCHEME Policy fee is not charged on these plans. 18,71,72,73,77. If policy sum assumed is 300,000 or more 50 paisa is rebate on basic rate. There is a 8% rebate for staff employees on planes.
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105
01 to 51 to
07. 57.
These all plans are finished from July 2002. 02,21,51,52,53,54,55,56,58,59,62.
01:- Whole Life Assurance

Age limit = 10-65 years. Minimum premium. This is for low income people. Bonus rate is Maximum 50 pasia is rebate on factor which starts from three lack sum assured. e.g. Age Maturity = 34 years. = 85 years.
Premium paid = 51 years. = 500,000 23.49 - 0.50 = 22.99 22.99 + 4 ATB = 26.99 26.99*500 = 11495 *100 Premium. = 115 Maturity Claim:Regular Bonus 56*5*500 = 140,000. 102*47*500 = 234,600. Terminated 30*20*500 = 300,000.
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= 32,86,000.
Death Claim S.A. = 500,000. Accedental claim = 500,000. Age at Accident = 55 years. Regular Bonus = 500*5*56 = 140,000. 500*16*102 = 8,16,000. Terminted:500*11*30 = 1,65,000. =21,21,000. AIB Rs. added 2,85,495
03:- Endowment Assurance

Age term = 20-65 years. Maturity age = 75 years. It's benefit is that time duration is on your wish. This policy has a single nominee. Age = 37 years. Term = 20 years. FIB = 15 % ADB = 1.25 %
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59.86 Factor + 1.25 ADB = 61.11 61.11+100 Policy fee = 62.11 Premium.
04:- Progressive Premium

Maturity Claim:S.A = 100,000 Regular Bonus = 100*5*48 = 24,000 100*15*94 = 1,41,000 Terminated 100*10*30 = 30,000 = 1,95,000. 1,00,000 will also be added. This will become 2,95,000.
Special terminated Bonus:10*10*100 = 1,00,000 =3,05,000 Rs. If death 2nd year
Death Claim:-
= 1,00,000 Accedental Claim = 1,00,000 Regular Bonus = 48*1*100 = 2,04,800.
05:- Three Payment Plan
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This is special for buisness man people. Term = 18-30 years. Terms:- 18,21,24,27,30 years. Maturity will on every 6th year if term is 18 years. e.g. 25% claim will be paid after 06 years. 25% claim will be paid after 12 years. 50% claim will be paid on maturity period.
Best Use:When you got 25% claim you can fix it in bank scheme, after 10 years this amount will be 4 times. Age = 42 years S.A = 50,000 Term = 21 years. 61.09*50 = 3054.5 3054.5 + 100 = 3154
Premium:-
07:- Child Protection

Child age = 6-15 years Donar age = 20-50 years
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Children have no alloted any suplimentary contract before 5 years old. After 5 years age ADB can be added. If S.A is greater than 1,50,000 then under writer can demand " Reject Medical Test ". If Father Died . Premium payment stops. Till maturity 10% scholarship anuualy goes to children. At maturity date claim plus bonuses will go to children. If Children Died . If child died after 1st year of policy then 10% of S.A + 10% of Bonus will be. If after 2 years of policy then 20% of S.A + 20% of bonus will go to father. After 10th premium complete S.A + complete bonus will go in each case.
18:- Rural Life

Age = 20-55 years Term = 15 or 20 years In accidental case 3 times claim will paid. In accidental case but with any claim will be paid.
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The other facility for policy holder is that no late fee will be charged premium paid date. This policy is free from policy fee. within 8 months after
Premium:Term = 20 years Age = 21 years S.A = 1,00,000 59.12*100 = 5912 5912 + 100 = 6112
19:- Jeevan Sathi

Premium single Protection double If any one dies, the other partner gets claim. If the other also dies, then the claim goes to the Hearis. Isolated medical for both partners. Separated filling of proposed forms. Each can take suplementory contract. Table 19 = WP + TIR + 03 Equal age consideration. Women age = 24 years - 2 = 22 years Man's age = 34 years
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Difference 34 - 22 = 12 years This difference will see in the 4 will deduct from the elder age. Medical will be demanded if FIB si more than 25%
Man = 34 years Woman = 24 years Term = 20 years S.A = 1,50,000 ASB = 1.25 Rs FIB = 15% 56.32 + 8.22 (15% FIB) = 64.54 64.54 + 1.25 (ADB) = 65.79 65.79*150 (S.A) = 9868.5 9868.5 + 100 (premium fee) = 9968.5
36:- Shad Abad

Age limit = 20-60 years Term = 10,15,20,25 In case of matured death 2 times claim willl be paid. In case of accidental death 4 times claim will be paid. If AIB added then 5 times claim will be paid in
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case of death. FIB & AIB can also be added with the wishes of underwriter. T-36 = ADB + TIR + 03 Premium. S.A = 2,00,000 Age = 25 years Term = 20 years 53.45*200 = 10,690 10,690 + 100 = 10,790
73:- Sunehri Policy

Bonus rate = 115/1000 It is same of long life, plan,saving and protection. Age limit = 20-60 years Age = 34 years S.A = 1,00,000 He wants no increase in 6% then this will proceed like other policies. If he wants to renew 6% then medical will be demanded. No policy fee, no rebate. Suplementory contracts.FIB, ADB, TIR. Contracts and benefit of suplementory contract starts from 3rd premium.
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75:- Child Education and Marriage

Every person can get this for his nephew, son etc. In case of policy holder's death 24% FIB scholarship goes to children. But birth certificate will be demandedat maturity or death. In case of also child's death the claim goes to hearis. Cash value can get no suplementory contract added to children. Term = 18,21,24 FIB = 24%
N'D Scheme
For mental, abonormal, halfset people + aged people + unfit people. But man get through 03 or 05. Age limit = 20-58 years Term for 03 = 10,15,20 Table 05 Term = 18,21 years No suplementory contract. Claim will only in case of accendental death in first two years. If after 2nd
year, natural death happened. Then one year's claim
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105
back after 3rd premium, complete amount received. Nothing should be required in this scheme.
BONUSES Routine. Terminal. Special Terminal. Interrum Bonus.

R egular
( Routine ) Bonuses:_
First Five Years After Five
Time Years
<20 20> 56 48
102 94 01-Endowment.
15-19 10-14 20<
35 20 35
81 60 09
15-19 plan 10-14
25
59
02-Payment
19
53
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TERMINAL BONUSES
At the maturity time or at the death time if the policy inforced till after 4 years. After the 10th premium, terminal bonus starts. This bonus is 30 Rs. / 1000 at the premium, which is maximum at 600 Rs. per thousand. e.g.
t-03
S.A = 100,000 Term = 25 years Premium = 5000 100 (S.A)*15(Yrs. remaining)*30(Rate) = 45000
SPECIAL TERMINAL BONSUES

In case of FIB year in 2002 at policy maturity, this bonus will be given to you. This will be given to you at each last 10 years premium with the rate of 10 / 1000 which is maximum. 200 / 1000 e.g.
t-03
S.A = 100,000 Term = 30 years
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FIB
100(S.A)*20(Yrs. remaining)*20(Rate) = 2000
INTERRUN BONUS
This is given as interrum bonus, which is given at terminal bonus. e.g. Special bonus is given in 2002, but it does not goes to policy holder and PH died. In this case the bonus which is delievered in 2003, will also be given to policy holder. e.g. During 2002 a terminal bonus is given to Ubaid. But the bonus certificate does not find to Ubaid, and such a mistake happened. Then this will go to Ubaid's claim as interrum bonus.
SPECIAL BONUS
Condition = Policy should be inforced when this bonus is announced. e.g. premium of 94 will be paid in 95's premium date. SUPPLEMENTARY CONTRACT ADB.
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AIB. FIB. TIR. WP. SWP.
SUPLEMENTORY CONTRACTS
ADB
Double claim paid from 5-55 years. ADB become 4 times in ShadBad automatically. In table 18 this is 3 times, but in case of injury or death with agricultural tool this will paid 5 times. Non external or intetrnal injury effect the demand of ADB claim. Notice of claim is attached to the documents when this contract starts. This contract is checked within 90 days of death. has the right to examine the body at any date. Termination in case of death claim, or if goes to sixty years age. If you want to include it in case of revival then this will happen according to the rules of. Risks which are excluded in this contract are in murder, heat stroke, in arresting, games, pragrency, any effect from alcohol drug etc.
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AIB
In case of death, double claim will go to party. In accident, if two main organs, two arms, two legs, two eyes or one arm, leg or eye died then complete claim will be charged and all the premium life and on maturity. Same Assured + Bonuses of Premium paid. But if one main organ destroys e.g. One arm or one leg demage then half of the claim will be paid but no rebate in premium. In case of
one eye 1/3 of S.A will recieved. Finger of Shahadat or thumb destroy, then 1/4 of S.A will recieved, no rebate in premium. If there is any serious injury then 5/1000 recieved for 52 weeks. If injury is more than 15 days. But after 52 weeks 100/1000 for 10 years will be recieved. Term = 20-55 years
FIB
It's limit starts from 10-50% and 10-25% . No medical charge but after 25% FIB medically you will checked. In case of death monthly scholarship
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105
paid.It's term is from 10-45 years. Age limit is from 20-50 years. Protection of contract will remain at 65 years age. This contract terminates on Expiry date, if the policy lapse, surrender or on any policy anniversory at prior notice by the policy holder. If your policy is on Revival then offcoursty it's amount will be added.
TIR
Friend goes to Dubai, for two or three years and gained a contract. That if your accident happened at any place then it's equal amount goes to your account. Term is from 10-25 years. Age limit is from 20-60 years. Maximum rate of TIR is 3 times. It's protection remains at 70 years age. Because these contracts are of 2 or 3 years, so mostly factory honours, driver people get this.
SUPLEMENTORY CONTRACT RATES Clerk, Professionals etc.
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AIB = 4 Rs ADB = 1.25 Rs Buisness man ADB = 1.5 Rs AIB = 5 Rs
Former
ADB = 1.88 Rs AIB = 6 Rs
Labour
ADB = 2.5 Rs AIB = 6 + 2 = 8 Rs
FIB is on the wish of policy holder. Followings are the plans which are off from July 2002. 02,21,51,52,53,54,55,56,58,59,62
SALARY AND GRADING

Grade
1 2 3 4
Initial Pay
1545 1788 1849 2037
Increment
80 100 102 118
Max. Pay
3456 3868 3991 4515
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5 6 7 8 9 10 11 12 13 14
2105 2652 3374 4990 7200 8970 12630 13660 15920 18420
133 149 288 350 490 610 640 680 710 900
4898 5781 13454 11990 15530 18120 22230 23860 26620 30120.
SWOT ANALYSIS Strength. Weakness. Opportunities. Threats.
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105
SWOT ANALYSIS
There is an old Spain saying that to be a
bullfighter be a bull.
SWOT stand for and is strength, The Weakness, main aim of to
you
must
first
Lear
to
Opportunities this analysis
Threats. to
identify
the
extent
which the current strategy of the organization and its more specific changing taking place in the business environment. The idea of analysis is to undertake a more SWOT
structured
analysis so as to yield so as to yield finding, which can contribute the formulation of
strategy.
STRENGTHS
SWOT Analysis of SLIC is as follows: Field force Management Good image Excellent set up Real estate division (investment portfolio) Training academies & training centers
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Marketing division Advertising & Sales promotion Computerization Market leader Return (bonus to policyholder) Government security
FIELD FORCE MANAGEMENT:

SLIC has ful-fledge by HRDD in most ZONAL and Offices organized qualified trainers
equipped by modern equipment to mange and train field force.
GOOD IMAGE:
SLIC is an old insurance company operating in the Pakistan and has created the good image and good will in the eyes of general public.
This is the strength of SLIC.
EXCELLENT SETUP:
SLIC is a large and Life 27 Insurance Zonal Company and in 5 Pakistan have Offices
Regional Offices throughout the country.
REAL ESTATE DIVISION (INVESTMENT PROTFOLO):
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SLIC has well-equipped and computerized Real Estate Karachi Division in by principal highly office (PO) staff,
supervised
qualified
engineers and investment analysts.
TRAINING ACADEMIES & TRAINING CENTERS:

SLIC has 3 training Academies and In at 26 Karachi, Training 1946 Basic Lahore Centers courses and in and Rawalpindi zonal
offices.
1998, from
seminars,
ranging
Courses to advanced Programs like ADP, MOP and MMS of LIMRA (USA) had conducted.
MARKETING DIVISION:
This division is backbone of SLIC. During 1998, 25486 young and educated people were inducted as SR in the sale force, this raising its strength to 256,814, inclusive of SO & SM.
ADVERTISING & SALES PROMOTION:

During 1998, a new penal of four advertising agencies such as of was selected. of in Outdoor advertising Hoarding done and
installation commercials
Unipole PTV is as
display other
publicity
materials
such
Calendars,
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105
Stickers, Eid Cards, and Posters are produced to boost business activities.
COMPUTERIZATION:
About The 2/3 working to is computerized total in SLIC. is plan computerized working
under review.
RETURN (BONUS TO POLICYHOLDER):

SLIC provides different Terminal, types of bonuses One as Reversionary, Interim, time,
Golden and Special Reversionary Bonus to the policyholder.
GOVERNMENT SECURITY:
It is the main strength and of SLIC. will Due for to this is factor, the image good SLIC
further enhanced:
OTHERS:
It is old and most experienced organization. PO conducts marketing survey to analyze
environment and develop new plans. Employees are fully devoted and highly paid workers as compare to other organization. It has highest paid up capital.
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It
is
reinsured
by
Swiss
Re
(Insurance
Company Switzerland).
WEAKNESSES
Incompetent field force Internal setting & culture Centralized Decision Making Internal department inefficiency Selection & recruitment Feed back
INCOMENTENT FIELD FORCE:

In term of quantity, it is strength but in term of not quality highly it is weakness. They Most are workers promoted are by
educated.
fulfilling targets.
INTERNAL SETTING & CULTURE:

Internal office setting and arrangement is not satisfactory Dominant but sub as compare needs to its competitors. improvement Insurance)
Culture culture
further
(i.e
HRDD,
Group
of some department is stationery. Yet there is need of further improvement.
CENTRALIZED DECISION MARKETING:
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105
Managerial centralized in
decision-making the PO Karachi,
is Zonal
totally Offices
follow the instruction and rules & regulations provided by PO. Sometimes decisions is taken by PO is not strategic For and adjustable & in the
local
environment.
prosperity
survival
of the organization, decentralization (to some extent) is necessary.
INTERNAL DEPARTMENT INEFFICIENCY:

Underwriting takes longer process time (in NB Department) irritates period, which
the prospects. Loan section takes 10 days to process. Normally surrender 1 to 2 months and is required the to
the
policy
take
Survival
Benefit, which is not justified.
SELECTION & RECRUITMENT:

SR are selected of and their recruited education by SO & SM irrespective and unique
internal attributes.
FEED BACK:
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105
The Corporation does not have any effectives and efficient feed back channel to
disseminate sales force suggestions to upper management. well organize Further, system organization for feed back has no
between
office employees and manager, managers and Board of Directors.
OTHERS:
Frauds done by some deceives field workers who deteriorate the good will & image of
the organization. Ineffective downward and upward
communication channels.
OPPORTUNITIES
PER-CAPITA PREMIUM
In Pakistan per capita premium payment is 1.5 and $1.7 only for life is & general an rate. insurance to per
respectively. enhance this
There
opportunity In Japan
nominal
capita premium for life insurance is $3810.
POPULATION GROWTH RATE:
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105
In
Pakistan,
population 3%. It is a
growth great
rate
is
approximately
opportunity
for insurance sector.
INSURED POPULATION:
In Pakistan rest 2% of to to 3% the life population population to is insured provides enhance while
opportunity
insurances
their business.
GOVERNMENT REGULATION:
Section 10-B of Pakistan Commercial 1968 of and Industrial the Standing Ordinance insurance the provides all the
compulsory of
employees
organization
(whether
private or Govt.). So it is a great opportunity to SLIC.
ENTERY BARRIERS
To enter in is is the insurance business 40% he of investment premium required. compulsory to cede to Further for the
private of
insurances,
Government
Pakistan security purpose barrier.
creating the entry
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105
THREATS
COMPETITORS:
The existence of local and government insures such as EFU, CU, Metropolitan. ALICO etc. is threat to the survival of SLIC.
POLITCAL INSTABILITY:
Political the instability looses the confidence rules subject of policyholders. of Further are and to
regulations
government
change creating threat to insurance business.
FEAR OF WAR
The not relationships satisfactory of Pakistan to with India are due Kashmir dispute.
There is always a fear war creating the threat to corporation and policyholders.
INVESTMENT CLIMATE:
Due to the political instability the and government changeover investment
climates are not satisfactory in the country. So the return from real estates and other
activities is deteriorated.
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Competors ALICO EFU METRO POLETON COMERCIAL LIFE POSTAL LIFE
ADAM JEE The main Competitors of SLIC are:

Eastern Federal Union (EFU) Commercial Insurance Company Metropolitan Insurance Company American Life Insurance Company (ALICO)
SLIC
has
enjoyed
complete
monopoly
till
1990 when the Govt. has decided to allow the private After insurers 1990 the But in to operate in the of Pakistan. SLIC is the of
market yet life SLIC
share has
declining. market
enjoyed business
share
insurance
91.4 on the basis of total premium written off in 1997. The year of establishment of the life
insurance companies are as follows:
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105
EFU CU ALICO Metropol itan SLIC EFU and CU have
1992 July 1996 May 1995 Februa ry 1993 1972 adopted the Unit Link
System. Whenever the policyholder takes the insurance policy, he indirectly purchases the units of the EFU and CU. The values if this
unit is announced daily in the newspaper. The only main strategic 5 years analysis starting of this of SLIC 1994 is to to confined 1998.The know the of
from
objective status
analysis
financial
and
competitive
position
SLIC keeping in view different factors such as total business in force, life fund, investment portfolio, total income, FYP etc. first, I start from premium Income of SLIC.
STATE LIFE INSURANCE CORPORATION OF PAKISTAN SUMMARIZED INCOME
86
105 STATEMENT FOR THE YEAR ENDED ON 31 DECEMBER------------1997 1998 1999 2000 2001 Total Income First year premium 1,487, 1,293, 1,258, 1,033, 1,121, 409 756 084 522 142 Renewal premium 4,363, 4,413, 4,311, 4,537, 4,564, 671 159 467 853 562 Single premium 2, 2,2 65 561 323 48 37 Group premium 1,412, 1,244, 1,250, 1,101, 1,256, 867 368 941 959 481 Annunities 2, 11, 15, 4,8 2,5 165 754 030 90 08 Interest, Dividend,Rents 5,791, 5,866, 8,372, 7,791, 8,355, 018 708 300 677 685 Profit on sale of Investment 109, 128, 32, 80,8 51,1 293 692 962 44 58 Profit on sale f assets 1, 7 1,0 630 549 200 36 28 Miscallaneous income 9, 15, 41, 38,4 8,3 934 923 315 72 59 Total Income 13,177, 12,975, 15,285, 14,592, 15,360, 052 470 622 201 960 Operating Expenses Claims & Policies paid 4,341, 4,714, 4,904, 5,136, 5,572, 069 853 083 130 197 Management Expenses 1,599, 1,381, 1,303, 1,132, 1,213, 135 227 398 029 747 Payment to Field workers 964, 939, 1,214, 1,081, 939, 867 710 557 302 660 Rent for offices 101, 1, 137, 141, 134, 729 325 893 985 382 Staff Gratuity & Pesion 57, 867, 92, 57,2 53,9 349 635 727 22 21 Provision for bad debts 7, 12,6 317 814 10
87
105 Depreciation Other Expenses Voluntery retirment Scheme Total Operating Expenses Operating profit Provision for Taxation Federal Govt Share Total Net profit 7,476, 580 5,700, 472 66, 172 206, 201 272, 373 5,428, 099 8,450, 586 4,524, 884 75, 260 8,059, 541 7,226, 081 45, 641 155, 775 201, 416 7,024, 665 38, 843 373, 271 41, 382 504, 454 39, 332 359, 737 35,7 59 401, 441 759, 501 8,745, 369 5,846, 832 204, 036 68,0 60 272, 476
75, 260 4,449, 624
204, 036 5,642, 796
8,267, 053 7,093, 907 159, 974 242, 418 402, 392 6,691, 515
Net Profit margin Operatiang profit margin
1997 41% 43%
1998 34% 35%
1999 46% 47%
2000 39% 40%
2001 44% 46%
ATIO ANALYSIS
Net Profit Margin Net Profit/Total Income
88
105
Year
Net margin Profit
1997 41%
1998 34%
1999 46%
2000 39%
2001 44%
The net profit margin of the company is very good. It clustering round 40% that is very good. The net profit margin of the corporation dropped down to 34% in year 1998 from 41% in year 1997. In year 2001 that net
profit margin of the corporation is 44% that is 3% higher than the profit ratio of 1997 i.e. 41%.
Operating Profit Margin

Operating Profit / Total Income
Year
Operating margin profit
1997 43%
1998 35%
1999 47%
2000 40%
2001 46%
The operating profit margin has increased from 43% in year 1997 to 46% in year 2001. This thing shows that the management has taken some encouraging actions to reduce the operating expenses of the corporation.
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105
Current Ratio
Current Assets / Current Liabilities
Year
Current Ratio 1997 1224% 1998 1066% 2000 2001 1300 1160% 1399% % 1999
The company has kept the majority of its sources in the current assets. The ratio of the current assets is increasing over the year. The ratio of current assets to current liabilities has increased from 1224% in year 1997 to 1300% in year 2001.
Debt Ratio
Total Liabilities / Total Assets
Year Debt Ratio
1997 99%
1998 99%
1999 99%
200 2000 1 99% 98%
As the company acquires funds from the general public it has huge amount of external sources. They have remained almost 99% throughout these year.
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105
Investment to Total Assets Investments / Total Assets

Year
Investments assets to total 65% 65% 68% 59% 67% 1997 1998 1999 2000 2001
The corporation has kept majority of its assets in the investment of various types. The portion of investment in the total assets of the company is increasing. It has fallen down to 68% in year 1999 but again increased to 67% in year 2001.
Loans to Total Assets Loans / Total Assets

Year
Loans to Total Assets 1997 7% 1998 6% 1999 6%
2000 5%
2001 5%
The portion of the loan to total assets has remained constant from 5% to 7% in these five year. In year 1997 it was 7% that has fallen down to 5% in 2001.
Local Investments to Total Assets

Local Investment / Total Assets
91
105
Year
Local Investment to total assets The portion of the
1997 8%
1998 8%
1999 7%
2000 6% in
2001 6%
local
investment
total assets has been decreasing over the years. It has fallen from 8% in year 1997
to 6% in year 2001.
Investment to Government Securities

Investment in Govt. Securities / Total Assets
Years
1997
1998 67%
1999 68%
2000 2001 58% 67%
Investment in govt securities to assets 65%
The corporation has kept majority of its current assets in the government securities. The portion of the government securities in total assets has also remained constant around 65%. It has increased from 65% in year 1997 to 67% in year 2001.
STATE LIFE INSURANCE CORPORATION OF PAKISTAN SUMMARIZED BALANCE SHEET
92
105 AS ON 31 DECEMBER-------1997 ASSETS CURRENT ASSETS Cash Stores & Spares ( stationery) Income Tax Refundable Sudary Debtors Outstanding Premium Interest, Dividends, and Rents Amount Due from other persons Balance Of Compensation Agents Balances Investments Govt Securities 1998 1999 PKR(000) 2000 2001
1,969, 077 17, 874 1,200, 214 480, 260 1,391, 699 2,014, 286 5, 734 56, 008 64, 896
2,419, 961 24, 719 1,455, 617 482, 410 1,516, 051 2,419, 718 2,7 36 56, 008 55, 339
1,476, 142 25, 728 2,038, 001 443, 830 1,702, 212 3,037, 760 14, 893 56, 008 55, 283
8,694 ,277 23, 337 2,861 ,545 1,292 ,532 1,189 ,107 2,886 ,969 1, 144 56, 008 54, 133 42,526 ,450 729, 743 1, 000 4, 750 177, 791 43,084 ,152
3,211 ,165 23, 241 2,781 ,446 885, 952 886, 587 3,250 ,337 13, 768 56, 008 42, 167 54,889 ,017 517, 212
35,709, 40,477, 46,220, 618 219 194
TFCs
120, 90, 58, 800 282 870 Certificate of 1, 1,0 1,0 Investments 000 00 00 Preferred Stocks 4, 4,7 4,7 750 50 50 (-) Diminution in Value of 47, 929, 111, Investments 296 239 648 Total Investments (net) 35,788, 39,644, 46,173, 872 012 166
4, 011 783, 083 54,627 ,157
93
105 Total Current Assets Non Current Assets Loans Wapda Bonds U.K Govt Securities Bonds, Debentures, Stocks Ordinary Stock In Pakistan Ordinary Stock Outside Pakistan Holding Subsidiaries Cos. Total Non-Current Assets FIXED ASSETS Hourse Property (net) Furniture, Fixture and Equipment(net) Vehicles Total Fixed Assets Total Assets EQUITIES & LIABILITIES Current Liabilities Sundry Creditors premium and Other Deposits Agent's balances
42,988, 48,076, 55,023, 920 571 023 3,828, 072 600, 000 243, 684 10, 000 4,614, 223 63, 628 62, 950 9,422, 557 3,828, 072 600, 000 243, 684 10, 000 4,614, 223 51, 397 62, 950 9,410, 326 3,828, 072 600, 000 243, 684 10, 000 4,614, 223 51, 397 62, 950 9,410, 326
60,143 ,204 3,828 ,072 600, 000 243, 684 10, 000 4,614 ,223 51, 397 62, 950 9,410 ,326 2,664 ,205 1,265 ,236 1, 086 3,930 ,527 73,484 ,057
65,777 ,828 3,828 ,072 600, 000 243, 684 10, 000 4,614 ,223 51, 397 62, 950 9,410 ,326 4,363 ,420 1,835 ,781 86 6,199 ,287 81,387 ,441
2,430, 2,910, 2,708, 961 162 779 168, 164, 1,044, 663 141 121 23, 13, 5,4 081 218 79 2,622, 3,087, 3,758, 705 521 379 55,034, 60,574, 68,191, 182 418 728
776, 104 242, 648 232,
1,507, 821 269, 508 183,
1,468, 368 303, 793 101,
657, 471 353, 275 262,

94
494, 078 374, 461 279,
105 264 Balance of compensation Payable Amount Due to other persons outstanding Claims Provisions Loans 785 House Property Other receivables total provisions Total current liabilities LONG TERM LIABILITES Balance of Life Insurance Fund Within Pakistan Outside Pakistan Provision for Gratuity Total Long Term Liabilities Equity Paid Up capital Reserves General Reserve Exchange Fluctuation Reserve
357 5 91 39, 416 2,498, 404 5
784 91 58, 110 2,771, 825 5
630 591 17, 730 2,970 ,182 2, 242 6 680 34, 530 452 4,299 ,331 37,
165 591 31, 389 3,631 ,464 1, 918 663 246, 148 248, 729 5,059 ,877
91 19, 546 2,223, 440 3,
2,8 59 95 7 6,7 60 10, 333 4,509, 430
2,6
78 13, 866 18, 529 3,513, 122
14
97 34, 477 37, 869 4,742, 340
50,730, 55,126, 62,122, 167 729 449 279, 332, 361, 699 846 791 33, 94, 118, 325 597 307 51,043, 55,554, 62,602, 191 172 547 100, 000 18, 808 359, 061 100, 000 18, 808 392, 008 350, 000 18, 808 478, 033
67,713 ,960 413, 076 107, 029 68,234 ,065 350, 000 18, 808 581, 853
74,416 ,031 402, 520 131, 428 74,949 ,979 750, 000 18, 808 608, 777
95
105 total reserves Total Equity Total Liabilities & Equities 377, 410, 496, 869 816 841 477, 510, 846, 869 816 841 55,034, 60,574, 68,191, 182 418 728 600, 661 950, 661 73,484 ,057 627, 585 1,377 ,585 81,387 ,441
Current Assets Debt Ratio Investments to total assets Loans to Total Assets Local Investment to total assets Investment in govt securities to assets
1997 1224% 99% 65% 7% 8% 65%
1998 1066% 99% 65% 6% 8% 67%
1999 1160% 99% 68% 6% 7% 68%
2000 1399% 99% 59% 5% 6% 58%
2001 1300% 98% 67% 5% 6% 67%
RECOMMENDATIONS
FOR OFFICE FORCE
There is much number of office staff. There are five departments and eighty-five persons are working in each department.
96
105
The salary is low, so as the investment. The regular working hours are much and also the overtime rate is low. Attachment and detachment are not on merit basis, they should be on merit and recruitment officers give much facilities to their relatives and friends, e.g., SLIC provides an A.C and carpet to deputy manage's room but officers have given them to assistant manager. Officers don't like to move the claim files and public have to move around the office many times. Now it has been suggested that a person should just ask for the claim only once and get his receipt. Now after thirty days, late fee charges will get incremented as the days pass and corresponding officer will be responsible for that. Officers claim about marketors that they have got much holidays and move about to their will. Then it is suggested that Saturday's holiday should be rounded. Manual work takes much time so every office should be provided with a computer. Officers have rude behaviour towards general public, this should be cared. Officers have not got qualified doctors, these doctors have not any criteria to be fulfilled. Therefore many problems arise after death claims.
FOR MARKETETING FORCE

Selection is not ideal. At least, minimum qualification for selection should be graduate. There should framing courses after selection for marketors.They should not only be told the ways
97
105
to improve their income but also improve their attitude and behaviour. Attending the courses should be must. There should be four courses each year and attending the two courses should be must for everyone. The criteria for promotion should not only based upon buisness but personal skills should also be considered. Marketors have got their commision in the first premium therefore they are excited at first premium's payment but after that they doesn't pay attention towards the rest of policy's payment and organization has to bear the heavy loss. Therefore their pay should be based upon persistency and renewal. Besides this every person is earning 9-15 thousand per month, therefore he should get full time job rather than part time. There should be a fixed amount on a particular number of policies. And another important fact:Quality:- No matter that policy holders are less but they should be of long duration. It may be that much people get insured because of their reference. Quantity:- There should be a much number of policy holders because every person gets rid after the first time. Marketors should guide about every aspect of claim that affects the policy, so that policy holder doesn't even think of surrender. Sometimes marketors get all the amount of policy by fraud, therefore arrangments should be made that a policy holder himself gets his premium paid.
98
105
FOR STATE LIFE INSURANCE CORPORATION: The bills of area manager get wasted. The name "Life Insurance" is not appropriate because it doesn't only include life buisness. The correct name should be "Income Insurance". Some departments haven't got pads. They aren't directly linked to zonal head. The problem creates when zonal head gets his illegal works done and there is no check and balance there. So every department should have its own pad to prevent this malfunction. It is the Pakistan's biggest financial institution but till now it hasn't completed its own web site. So it should complete its web site to get people informed about its working. Advertisement should be in those areas where people know little about SLIC.
FUTURE PLANS
The corporation aims at consolidating its buisness in future years. To give special attention to check inflationary pressures on expense particularly salaries, utilities, communications etc., by capitalizing on new buisness growth, improving policy holders service and reducing avoidable expenses.
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105
To identify and utilize the resources in rural areas in order to increase and mobilize savings from these areas. To streamline and expand training facilities. To lay greater stress on real investments in suitable property and ordinary shares, to ensure better return to the policy holders. To improve overseas buisness by opening branches in Middle-East.
GLOSSARY
ACTUARY:Actuary is a person employed by the insurance company who calcualtes risk involve in insurance therefore also calculates the premium payable by insurer. ANNUITY:- An annuity is a periodic payment made by life insurance company to an annuitant. The payment is made by the company in return for premium which is paid either in a lump or as a series of periodic payments. BUDGET:- Estimate of future expenditures in relation of the income.
100
105
CAPITAL MARKET:- A market where you can borrow or lend money in long term basis. INSURANCE:- Insurance is one of the device by which risk may be reduced or eliminated in exchange for premium. INSURER OR ASSURER:- The party which protects another against the various risks. INSURED OF ASSURED:- The person or party who is safe guarded against the risk in exchange of premium. INVESTMENT:- Assets, generally of a long term nature, that are not used in normal operation of a buisness and that managment does not intend to convert to cash within the next year. MONEY MARKET:- It is a market where you can borrow or lend money in short-term buisness. PREMIUM:- It is a periodic payment paid by the insured to the insurer against the risk bearing. SAVING:- Excess of income against expenses. SAVINGS:- Wealth gained through saving.
SKETCH OF REPORT
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105
Introduction
Bonuses
SWOT Analysis
Insurance Companies Insurance Evaluation Insurance in Pakistan Life Insurance in Pakistan State Life Insurance in Pakistan State Life Insurance in Bwp.
Routine Bonuses Terminal Bonuses Special Bonuses Interim Bonuses
Strengths Weakness Opportunities Threats
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105
Departments Marketing Products Competitors
Agency Department HRD Department New Business Department PHS Department P&GS Department Audit Department B&A Department
Supplementary Contracts
01-
Whole
Assurance. 03Assurance.
04Premium. 05- Three Payment Plan. 06- Joint Life. 07- Child Protection. 09- Single Premium End. 17- Optimal Maturity. 18- Rural Life. 19- Jeevan Sathi. 36- Shad Abad. 73- Sunehri Policy.
Life ALICO. EFU Metropolitan Endowment Commercial Postal Life Adamjee Progressive
Performance Analysis
ADB AIB FIB TIR WP SWP Calculation Overtime Persistency Premium Late Fee. Loan Fee.
Investment Portfolio Income Analysis Outgo Life Fund

Ratio Analysis
Liquidity Ratio Activity Ratio Profit Ratio Solvency Ratio
75- Child Edu. & Marr. (built in) 76- (Non built in). N.D.SCHEME
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105
Internship Procedure Plan

sr. head . # points of concidration ho total departm urs no of ent hours 9 7 8 10 10 10 10 10 9 9 10 9 8 7 6 Marketin g
1 Ch. M.Shubbir marketing management stretigies products(plans) supplimentry contracts Mk.channels 2 Mr.Ishfaq Calculations, loan,maturityclaims deathcliams, surrenders survival,altration 3 Mr.Rafiq under writing policy case allotment 4 Mr.Imtiya Organizational stucture z Histotry and introduction Division Auditing Competetors 5 Mr. Basic training course
PHS
30
19
New busniss Auditing
43 HRD
104
105 Hashmi Bounuses benefits of life insurance Selling process Organizational stucture Mission and objuctives Strategies, agency department head Future plans payroll, reconsilation Comission,disbursment costing policy holders payments basic salary and grading Office transfer.promotions purchasing ,advertizing Distribution,facilitation 8 7 7 6 7 8 9 9 8 10 7 8 10 9 9
35 Agency
6 Mr.Tufail
24 B&A
7 Mr.Freed
8 Mr Asad
42
P&Gs
28
Total # of hours = 246 hours No of days =36(estimated) No of weeks =6 weeks
105

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105

DEPARTMENT OF MANAGEMENT SCIENCES IUB

DEPARTMENT OF MANAGEMENT SCIENCES IUB

DEPARTMENT OF MANAGEMENT SCIENCES IUB

DEPARTMENT OF MANAGEMENT SCIENCES IUB

DEPARTMENT OF MANAGEMENT SCIENCES IUB

DEPARTMENT OF MANAGEMENT SCIENCES IUB

DEPARTMENT OF MANAGEMENT SCIENCES IUB

His tory of Ins uranc e:

BENEFITS OF LIFE INSURANCE

Eduction and Marriage plan Income Tax rebate Retirement Fund

Life insurance (Nationalization) order, 1972 (Presidential Order X of 1972)

Date of incorporation : November 01, 1972

State Life Building No.9 Dr. Ziauddin Road Karachi, Pakistan.

DEPARTMENT OF MANAGEMENT SCIENCES IUB

MISSION OF STATE LIFE INSURANCE

DEPARTMENT OF MANAGEMENT SCIENCES IUB

population from sections in town

comparatively society villages, to the

To use th3e policyholders funds in the wider interest of the community.

History of Life insurance In Pakistan:

company particularly for Muslims was felt by

DEPARTMENT OF MANAGEMENT SCIENCES IUB

insurance of life Life to

facility. insurance Insurance entire to life

nationalization in 1972, was

nationalized by Govt., Order in March 19, 1972

DEPARTMENT OF MANAGEMENT SCIENCES IUB

(March 19, 1972),

improvement these units

DEPARTMENT OF MANAGEMENT SCIENCES IUB

REGIONAL & ZONAL OFFICES

DEPARTMENT OF MANAGEMENT SCIENCES IUB

REGIONAL & ZONAL OFFICES

Rahim Yar Khan Dear Ghazi Khan Bahawal Pur 17

NEW BUSINESS DEPARTMENT

DEPARTMENT OF MANAGEMENT SCIENCES IUB

FUNCTION OF NEW BUSINESS

DEPARTMENT OF MANAGEMENT SCIENCES IUB

Personal physical health, prospect. Moral

data, and family social

occupation, features, of the

the nominee and the prospect. Previous life insurance history of

the prospect if any. Field officers or sale

representatives report form. Financial of underwriting its included in

confidential the proposal

source proof, the

prospects income and sum assure. In case of non-medical scheme, the

DEPARTMENT OF MANAGEMENT SCIENCES IUB

WORKING OF NEW BUSINESS

DEPARTMENT OF MANAGEMENT SCIENCES IUB

DEPARTMENT OF MANAGEMENT SCIENCES IUB

POLICY ISSUE SECTION

department of record purpose.

status of Prosper. Verification of stated information on

DEPARTMENT OF MANAGEMENT SCIENCES IUB

DEPARTMENT OF MANAGEMENT SCIENCES IUB

punched listings are

prepared regarding cheques

DEPARTMENT OF MANAGEMENT SCIENCES IUB

Statements The data

prepared in the following

manner: *** ** *** ** *** ** *** ** *** **

manner: * * * * *