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

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)

Internship Report 2014

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
3

Internship Report 2014

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

Internship Report 2014

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

Internship Report 2014

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.

Internship Report 2014

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
7

Internship Report 2014

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

Internship Report 2014

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
9

Internship Report 2014

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 ecover 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.
10

Internship Report 2014

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)
11

Internship Report 2014

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.
12

Internship Report 2014

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.

13

Internship Report 2014

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.
14

Internship Report 2014

Underwriting Department
General Underwriting Department
Leasing underwriting Department

Claim Department

Accounts Department and

Marketing Department.
.

15

Internship Report 2014

Overview of the Departments.
Underwriting Department
The underwriting department essentially consists of 7 sub-departments which include
1.
2.
3.
4.
5.
6.
7.

Motor Underwriting
Marine Underwriting (Marine Aviation and Marine hull)
Fire Underwriting
Property Underwriting
Engineering Underwriting
Miscellaneous Underwriting and
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.

16

Internship Report 2014

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
17

Internship Report 2014

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
18

Internship Report 2014

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.
19

Internship Report 2014

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

20

Internship Report 2014

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
21

Internship Report 2014

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.

22

Internship Report 2014

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.
23

Internship Report 2014

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
24

Internship Report 2014

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.

25

Internship Report 2014

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.
26

Internship Report 2014

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.

27

Internship Report 2014

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.
28

Internship Report 2014

Works Cited
EFU.
(n.d.).
http://www.efuinsurance.com/ourBeginning.php.
http://www.efuinsurance.com/ourBeginning.php:
http://www.efuinsurance.com/ourBeginning.php

Retrieved

from

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

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

29