Management practices

Management Report on:

By:
Shariq Khan 46277
Saad Ali 46004
Bashir Hussain 46009
Shoaib Khan 46000
Hamza Alam 46114
Hasnain 46112
 Table of Contents

S.No Contents Page

no.
01 Planning

02 Oraganizing
03 Organizational Structure
04 Motivation
05 Leadership
06 Controlling
07 Conclusion
 EXECUTIVE SUMMARY
If we want to explain Insurance in a single line so we can say that “Financial protection against
loss or harm”. In today’s life Insurance has taken place as a need of human life because no part
of our life remains untouched by the Insurance. Insurance has evolved as a process of
safeguarding the interest of people from loss and uncertainty. We have completed this report
on State Life Insurance Corporation of Pakistan, State Life Insurance Corporation of Pakistan
(SLIC) has a solid foundation since 1972 in Pakistan, and main objective is to provide its
customers with safe, secure and trustworthy service through wide range of products. State
Life Insurance Corporation plays a very important role in everyday lives of the people and also
contributing a lot to the economy of the country by providing the government a lot of fund. In
this report we have given a very brief review of profile of State Life Insurance Corporation of
Pakistan and have discussed the procedures and working methods of the financial department
of State Life Insurance Corporation. We have made it possible to write each and every thing
that I have learnt during the completion of this report
 Company Description
Introduction:
The State Life Insurance Corporation of Pakistan, commonly known as State
Life or SLIC, is the largest life insurance company of Pakistan. It maintains an agency network
of around 200,000 sales personnel and is one of the largest companies in Pakistan by assets.
Although the major function of SLIC is to carry out life insurance business, it is also involved in
other business activities such as investment of policyholders’ fund in government securities,
stock market and real estate.

History:
The life insurance business in Pakistan was nationalized in March 1975.
Prior to 1972, 36 life insurance companies were involved in the life insurance business. These
companies were later merged and placed under three Beema Units; named "A", "B" and "C".
Later, these Beema Units were merged on November 1, 1972 and State Life Insurance
Corporation of Pakistan came into existence. State Life Insurance Corporation of Pakistan is
headed by a Chairman and assisted by the Executive Directors appointed by Federal
Government. Up to July 2000 the Corporation was run by Board of Directors constituted under
Life Insurance (Nationalization) Order 1972. In July 2000, under Insurance Ordinance 2000, the
Federal Government reconstituted the Board of Directors of State Life which runs the affair of
this Corporation.

Chairman:
The State Life is headed by a Chairman, currently Shoaib Mir Memon. The
Chairman is assisted by four directors. The Chairman and directors of State Life are all
appointed by the Government of Pakistan.

Policies, Rules & Regulations:

State Life Insurance Run under the Ministry Of
commerce also that follow the rules regulation under that ministry as well as state life
insurance has their own board of directors that make the policies, rules of the organization.
Ministry Of Commerce has installed the rules and policies that are permanent for the
organization and they are unable to change Board of Directors Make the new rules policies
and regulation in to organization these can be change, as changing the top management of the
organization so they change the rules and their policies.

Business Partners:
  Unite Bank Limited-UBL
 First Woman Bank Limited
 Bank Alfalah Limited
 NIB Bank
 National Bank of Pakistan-NBP
 Silk Bank Limited
 Samba Bank Limited
 Summit Bank Limited

Subsidiaries:
State Life has the following subsidiaries:

 Alpha Insurance Company Limited

 State Life Properties Private Limited
 State life Properties Private Limited
 State Assets Management Company Limited (SAMCO)

Services:
State Life Insurance Sale Only Life Insurance Policies
 Individual Life
 Group Life Courage
 Takafull
 Health Insurance

Planning

Vision:
Our vision to provide in insurance services to far rural areas of Pakistan. To those who
cannot afford to secure the future of their children’s.

Mission:
 To remain the leading insurer in the country by extending the benefits of insurance
to all sections of society and meeting our commitments to our policy holders and the nation.

Quality Policy:
To ensure satisfaction of our valued policyholders in processing new business,
providing after sales service and optimizing return on Life Fund through a quality culture and
to maintain ourselves leading life insurer in Pakistan.

Goals:
Strategic goals:
Following are the main strategic goals of our organization
 To run life insurance business on sound line.
 To provide more efficient service to the policyholders.
 To maximize the return to the 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 area of operation of life insurance and making it available to as large a
section of the population as possible, extending it from the comparatively more affluent
sections of society to the common man in towns and villages.
 To use the policyholders fund in the wider interest of the community.

Financial Goals:
State Life insurance hold total 55% shares in insurance market against
their rivals their main financial goal is to remain a leader in the insurance business.

Long Term Plan:

Their long term plans are basically their insurance policies which are as
follows:
 Endowment insurance
 Whole Life Insurance
 Child Education and Marriage Insurance
 Jeevan Saathi Insurance
 Sada Bahar Insurance
 Organizing
Organogram:
Chairman

Executive Director

Divisional Head Zonal Head

Deputy GM Assistant GM Manager

Deputy Manager Assistant Manager

Executive Officer

Assistant Superintendent Superintendent

Executive Officer

Assistant Officer Officer

Record Naib Qasid

No of Employees:
SLIC have more than 90,000 employees.

Types of Employees:
There are two types of employees in SCIL
 Permanent Employees
 Temporary Employees

Permanent Employees:
Employees which are appointed by the Security and
Exchange Commission of Pakistan are permanent employees .Their salary is fix and they get
promotion according to service and grade. There are 4000+ permanent employees in the Sate
Life Insurance Corporation Pakistan as they working currently in deferent departments of the
organization.

Temporary Employees:
Those employees who work outside of the offices are
called Field Force or Sales Force. Their job is to sale policies and get the data about policy
holders. These employees are temporary employees of the organization, Most of these
Employees are not salary based they commission based employees. They get promotions on
the basis of their performance

Categories of Filed Force Employees:

There the Five Categories of
the Field Force Employees which are doing field work in different areas for the State life
insurance corporation that is defined following

Sales Representative:
Sales representative of Sate Life Insurance Corporation have
a job to sale policies to the customer they get sales target by the organization and they have to
fulfill those targets in a given time they get promotions on the basis of their target
achievements.
Sales Officer:
Sales officer works to ensure that the company has a strong presence and
is reaching the right client base they meet with the clients to make them satisfied about
policies they also work with the team of sales representative and assist them in selling policies.

Sales Managers:
Sales managers are responsible for setting goals for Sales Officers
and Sale Representative. Sales managers work with large profile customers or with customer
complaints, determine ways to streamline and improve the sales process.

Area Managers:
The area Manager is the higher body of Sales Representative Sales
Officer and Sales Manager both three departments work under are manager, there salary is
based on payroll.

Marketing Managers:
Job of marketing manager is to ease the selling process
they develop marketing strategies and co-ordinates marketing campaigns with sales activities.
Area Managers work under Marketing Manager

Policies and Criteria for Job:

Dynamic young men and women of
minimum 20 years of age holding National Identity Cards, having Matriculation certificate and
capable to accept the challenges, can be appointed as Sales Representatives. They have to
complete pre-determined performance standards. The candidates can approach the Zonal
Offices or the Area Offices/Agency Offices spread over the nooks and corner of the country for
selection.

Hiring and Selection of Employees:

There is the process for the Hiring and selecting of the
employees that is shortly explained following
 Preparation of need / requirement of staff strength
 Permission from ministry of commerce
  Advertisement in newspapers
 Test through national testing service
 Interview

After the completing that process employees get selected

Training of Employees:
Training of employees done according to their job title
State Life Insurance Corporation have different training programs for different job title some
of them are as follows.

Training Courses Offered for Marketing Executives:

State Life Insurance Corporation of Pakistan provides adequate training to its marketing
executives through the Field Manpower Development (FMD) Department. There are four
Regional Academies, one each in respective region, 26 FMD Centers, one in each zonal office
to impart training, seminars and refresher courses to different levels of our marketing force.
FMD department offers three courses exclusively for the marketing executives. These courses
have been adopted from LIMRA (Life Insurance Marketing and Research Association of USA).
They are:
Foundation Course
MOSC (Marketing Orientation Study Course)
MMS (Management Marketing Series)
Following types of seminars are regularly conducted in different zones as per requirement of
the zone. The topics are as under:
 Time Management
 How to build up team
 How to improve persistency
 How to improve Renewal Persistency
 Recruitment and to get result
 Policyholder Service
 Leadership + Motivation
 And many others

Foundation Course (FC):

The Foundation Course is basic requirement in Insurance Ordinance 2000 in Pakistan.
According to this Ordinance, every field workers should be fully trained about the insurance
products and should be able to assess needs of customers. According to the Ordinance, Agents
operating in Life Insurance shall be required to complete a Foundation Course of three months
duration. The Foundation course contains following phases:
 Classroom Training 10 days
 On Job Training 80 days (Practical Field training under the supervision of Area Manager
or Sector Head)
 Total No. of days 90 days
 Every agent must complete Foundation Course for registration in the State Life.
 Management Orientation Study Course (MOSC)
This course contains 17 units: Its duration now in 2006 is changed from 15 to 10 days.
Following topics are covered under this course:
 Planning and Management
 Recruiting
 Selection
 Training
 Supervision
This course together with FC is an essential requirement for promotion of Sales Representative
to Sales Officer.
Marketing Management Series (MMS)
This course comprises of 5 Modules, each module contains 5 units and total 25 units are
included in this course. The normal duration of this course now changed from 25 to15 days,
This course is conducted continuously for 15 days. Following Subjects are included in this
course:
 Recruiting for result
 Selection for Success
 Penetrating your Market
 Improving Performance
 Planning for Productivity
This course together with FC and MOSC is an essential requirement for promotion from Sales
Manager to Area Manager and above.

Structure of Organization
Basic Structure:
The basic structure of the Sate Life Insurance Corporation consists of Seven
Regional Offices, Thirty Three Zonal Offices, a few Sub-Zonal Offices, 190 Sector Offices, and a
network of 1102 Area Offices across the country for Individual Life Insurance; Four Zonal
Offices and 6 Sector Offices with 20 Sector Heads for Group & Pension are involved in the
Marketing of Life Insurance Plans policies and products offered by State Life and a Principal
Office. The Zonal Offices deal exclusively with Sales and Marketing. Underwriting of Life
Insurance Policies and the Policyholder's Services. Regional Offices, each headed by a Regional
Chief, supervise business activities of the Zones functioning under them. The Principal Office,
based at Karachi, is responsible for corporate activities such as investment, real estate,
actuarial, overseas operations, etc.

Head Office

7 Regional Offices

33 Zonal Offices

Sub-Zonal Offices

190 Sector Offices

1102 Area Offices

Functional Structure:
Since the State Life Insurance is a huge organization
their structure is very much functional structure their employees are specialized and have
similar role and goals.

Departmentalization:
State Life Insurance Corporation use both Functional and
Geographical Departmentalization. Their regional, zonal and sub-zonal offices are based on
functional departmentalization and Sector and Area Offices are based on Geographical
departmentalization

Departments of SLIC:
State Life Insurance Corporation have 15 main
Departments and all departments are connected to each other so if one department fails to
perform it will affect other department as well.
Let’s look at the all 17 Departments:

1. Policy Holder Services Department:

Policy Holder department is the is the most important department of State Life Insurance
Corporation this department is responsible for making new Policies and providing best
services to their Policy Holders.

2. Marketing Department
Marketing department is responsible of Marketing their services and Policies.

3. Bank Department
Bank Department is responsible for all type of Payment transaction happens in
organization whether its deposit operation, wire transfer and cash management all work
happens under this department.

4. Group and Pension Department

This Department is basically responsible for one of their insurance policy service.
 5. Health Insurance Department
This Department is responsible for their Health Insurance Policy Service
6. Real State Department
This department look after their real state asset or offices they are responsible for all type of
infrastructure and maintenance of their offices

7. Legal Affair Division Department

This department is responsible for all type of legal issues or lawsuit happens against the
organization
8. Personal and General Services (PNGS) Division Department
P&Gs department is human resource department and it does all those works which are
necessary to handle personnel of all departments of Group &
Pension. This department manages 8 sector offices they are responsible for the daily
attendance and record of employees.

9. Corporate Affairs Division Department

This department is responsible to build and protect the organization overall reputation
and image while proactively developing communication strategies to generate revenue.

10. Finance and Accounts Division Department

This department is responsible for all type of financial issues occur within or outside
of the department.

11. Investment Department

This department is responsible for investing money in new projects.
12. Actuary Department
This department calculate and predict any upcoming uncertain future events
13. Information Technology Department
This department is responsible is taking care of IT
Work such as Networking, Troubleshooting problem occur in computers and upgrading
software.
14. Internal Audit Department
This department is responsible for check and balance of financial work within
organization
 15. Medical Department
This department is responsible for granting medical help to their employees

Chain of Command:
State Life Insurance use the change of command their line of
authority start from upper to lower management.

Span of Control:
State Life Insurance Corporation has a span of 4 which starts
from the four Executive Directors.

Decentralization:
State Life Insurance Corporation is based on decentralization.
Most of the decisions of the organization is take by employees

Formalization:
State life insurance is highly formalized Organization they have their
strict rules and procedure and training programs.

Mechanic Structure:
State Life Insurance Corporation use Mechanical structure to
perform on their goals they have tight control on the employees to meet their goals and their
strategies are prepared by their top management

Overall Structure:
The overall structure of State Life Insurance Organization is
very strong they are very responsive to changing needs of environment for that they have
separate Actuary Department who Monitor the external environment and new government
policies. This environment is capable of predicting upcoming conflicts and problems on the
basis of their work.
 Leading
Initiating Structure:
State Life Insurance Corporation have initiating
structure in the whole organization their leadership are clear about their role and role of the
employees are set to reach the goals

Production Oriented:
Leadership of state Life insurance are Production
oriented. Since it’s an insurance company most of their employees are commission based if
they failed to reach their target they have to leave the organization

Leader–member relations:
Leadership of Sate Life Insurance
Corporation is mostly autocratic that’s why employ don’t have a good relationship with their
leaders

Task Structure:
Job or task of the employees are divided according to
their department and skills

Position Power:
Leader of every department have certain right to hire
the employees according to their need and leader have enough power to maintain a discipline
and can make a report on the base of their work and behavior to give him a promotion

Directive Leadership:
State Life Insurance Corporation have a
directive leadership they define the task to their employees and strictly monitor the task
according to their rules and regulations
Motivation:
State Life Insurance Corporation have number of training program to
motivate their employees for better outcome some of them are here:
 Time Management
 How to build up team
 How to improve persistency
 How to improve Renewal Persistency
 Recruitment and to get result
 Policyholder Service
 Leadership + Motivation
 And many others

Bonuses and Benefits:

State life Insurance Corporation give bonuses to
their employees two time in a year on Muslim events Eid-ul-Fitr and Eid-ul-Adha beside that
they provide free medical services in case of any emergency and medical issue to every
employee they have some state of the art hospital on their panel their panel hospital includes
 Liaquat National Hospital
 Ziauddin Hospital

Male Female Ratio:

In state life insurance there are mostly male workers if
we talk about the there are 90% person Male Employees and 10% person Female Employees
one of the main reason is that most number of employees in state life insurance are field
worker they have to work in male dominant areas

Environment or culture:
There are very friendly culture in the
offices between employees. Since their departments are based on Functional
Departmentalization employees have similar work to do which make them more co-operative
with each other
Religion and ethnicities:
Most of the employees are Muslim in
the organization but still they have number of non-Muslim as well

Autocratic:
Leadership of state life insurance corporation is Autocratic because
according to the interviewee most of their decisions are taken by their upper leadership and
they implement it in the organization through commanding

Controlling
Controlling Process:
All the departmental head are responsible
for controlling the goals every employees have to give the report on the task to their heads.
Head of the department have to make sure that everything is happening according to their
rules and policies

Employees Progress:
Progress of employees is monitor by their higher
body, at the end of the every manager have to submit Annual Confidential Report (ACR) of
every employee. Promotion of employees are based on that report so they have to perform
well.

Daily attendance:
All the employees of Group and pension call their attendance before
starting their duty. If any employee is not at time than he will call late attendance and three
late attendance will be considered a casual leave.

Record of employees:
There is complete record of employees who are at work or have
retired and all necessary data is maintained about every employee as date of appointment,
date of retirement, promotions, medical services and all other data.

Employees Behavior Controlling:

They have very
strict Policy against the bad behavior of the employees if any employee give poor performance
warning letter issued against him and if it happens against he or she will get suspended from
the organization

Financial Control:
To control the organization financially they have a
separate Audit department. Audit department annually audit the all offices and sector of the
department check if anything is missed and misplaced.

Informational Control:
The highly confidential and proprietary
information remains between the top management and any non-managerial employ don’t
have access to that type of information

Swot Analysis
It is an important tools to analysis the overall situation in which an organization is conducting
its affair. Each issue remains relevant and useful for corporate strategy formation

Strengths:
Good financial resources:
SLIC has adequate financial resource this is
strength of SLIC. Because it can invest in different projects and can earn more, financially they
have no problem.

Better advertising campaigns:

As SLIC is market leader, and big organization
so it can afford a better advertisement campaign through any kind of media.

Good human resources:

As SLIC is a large organization, and
there are large number of people who are working . So they have adequate human resource,
and they can meet any challenge relate to human resource.

Capable top management:

As they follow strict rule for promotion, so the top management of SLIC in a very much
competent experience. so their decision give benefit to the organization.

Competitive skills of employees:

Employee of SLIC are very much
competitive and very much skillful they know very will the corporation activities, which
increase the efficiency of an organization.

Good will:
As SLIC is ans old organization, so it has a goodwill among policyholders.
That’s
Why people easily trust the organization and want to invest the money in it

Government security:
As SLIC is Government organization, it has
complete government support to organization which also increase its, stability and Goodwill.

Market Share:
SLIC has dominated in life insurance market although there are also
other companies operating but SLIC has more than 60% market share.

Natural monopoly:
SLIC is so large Corporation and it is only institution of GOVT which is a source of revenue for
GOVT and it is also a profit making, and all other GOVT institutions are insured with SLIC. Such
as Railway, PIA and Police these institutions have thousands of employees. These things make
monopoly of SLIC in market.
 Weakness:
Long processing of claims:
There is complicated and a long process of claiming of payments. It is
causes of dissatisfaction in people And sometimes it take months to pay a claim.

Out dated IT system:

Such a big organization should develop its own IT system with complete security. But
unfortunately about all data in SLIC is maintained handily. There are some computer systems
which are so slow and old and not capable to do work. There is also no backup of computer
data and in any failure of computer system may loss all data.

Political recruitments:
SLIC is GOVT Corporation and working under Ministry of
Commerce. Ministers cannot hinder in managerial decisions but some hiring are done on
political pressure and ill competent people are handled which reduces proficiency of work.

Turnover of field force:

As field worker are commission based, so turn over in SLIC high
because those who fail to bring business, leave the organization.

Increasing rate of surrender:

Because of economic condition, when the saving of people lower they can’t continue their
policy. so they surrender the policy, and this is one of the important weakness of SLIC.

Economic conditions:
Economic condition of Pakistan is not so good, due to which people has less saving, so when
saving is less they can’t be able start a policy.

Less awareness of mass:

A large part of population is leaving in rural areas and people of that area is not aware about
life insurance.

Weak marketing efforts:

As SLIC is market leader, and there is no other close competitor, so they not give proper
attention to marketing activities.

Opportunities:
Growth of financial sector:
As financial sector of Pakistan is starting better which will make better the financial position of
people and will increase saving of people. So this is an opportunities for SLIC to increase their
business.

Diversification:
As SLIC is providing services in just only in life insurance, it can also start
general insurance, like the insurance of property etc.

Favorable government policies:

As SLIC is a government organization, so all policies of
government is in the favor of SLIC.

Innovation:
SLIC also bring so many innovations in their present product, like they decrease
the maturity duration of policy or can decrease sun assured of policy etc

Modern IT system:
SLIC is working on so large scale and it can afford a modern IT system
which is completely secure. And processing of operations can be increased by converting all
system to computerized record.

Threats:
New competitors:
With the passage of time so many organization are coming to insurance business, so there will
be tuff competition for SLIC to face in future.

Recession in economies:
As Pakistan economic condition is not so stable so recession in economy can effect its
performance by increasing the surrender rate of policy by policy holder.

Changing customer needs:

As customer’s needs are changing, like if they have saving they might use in some other
business in stated investing in SLIC.

Cyber crimes:
Very large losses could also occur from an attack on online systems, as unless
security increases proportionally, Without a doubt, computer viruses are a serious threat to all
forms of modern business activities. Targeted attacks could cause companies extreme losses
and the most severe scenarios (of extremely low probability) envision the destabilization of
entire business sectors.

Catastrophic events:
Pakistan is under severe catastrophic and in last few years GOVT
organizations and institutions are target of these attacks. It could not only cause damage to
SLIC but it can also increase claims ratio with these catastrophic attacks.

Recommendation
SLIC is market leader and it has so strong management structure and there is transparency of
business management but I will like to give some recommendations because it is requirement
of my report.
 Better training courses should be arranged for the up lifting and improving the quality
of work of employees.
 There is also a problem of work overload for the employees and it should be control
properly so that the employees are motivated. Responsibilities are also not equally
divided between employees.
 System and operations should be more defined and organized.
 SLIC management should give more incentives to the staff because they are the asset
of company. There are so many incentives for officers but staff is ignored that is why
staff members looked some de motivated.
 IT draw backs should be improved.
 Expenditures must be control, which are very high.
 SLIC is advertising only on Pakistan TV and Radio Pakistan but now there are
uncountable private channels where SLIC is not giving advertisement. It should
properly advertise and Communicate to public about the products provided by it, so
that more customers will be attracted.
 Islamic mode of insurance is emerging rapidly so SLIC should reorganize its strategies
and introduce some pure Islamic products or invest only in interest free business.
 Conclusion
It was splendid experience for us of first time visiting any organization
.Management of SLIC is true asset of Corporation and such a
competent and experienced people are working here who make a
Government institute corruption free and the market leader. SLIC is
providing life Security coverage to about 6.00 million person of the
country. Apart from this it provides self-finance jobs to thousands of
the countrymen, and mobilized the country economic and financial
resources, and also contributes a lot to Government in terms of
providing funds. We hope that the corporation will play its important
role in the development of National Economy. It was splendid
experience for me that make me familiar with business environment,
procedures, working methods and culture of State Life Insurance
Corporation. I have really gained a lot of knowledge during
preparation of this report.

Biblography
Management 14th edition by Robbins and Coulter

Sources
Statelife.com.pk

Thank You!