CONTENTS

CHAPTER TITLE PAGE #

Preface
Dedication
Acknowledgement
Executive Summary

1 History Of Insurance
Pakistan Insurance
State Life Insurance Pakistan
Mission &Quality Statement
2 Departments In SLICE
New Business Department
Budget And Accounts Department
P&GS Department
Computer Department
PHS Department
3 Individual Plans
Wholoe Life Assurance
Child Education And Marriage Paln
Child Protection Assurance
Jeevan Sathi Assurance
Muhafiz Plus Assurance:
Nigheban Plan
Sada Bahar Assurance
Shad Abad Plan
Sunehri Policy

4 INDIVIDUAL LIFE CLAIMS

5 FINANCIAL ANALYSIS
RATIO ANALYSIS
LIQUIDITY RATIO
PROFITABILITY RATIO
HORIZONTAL ANALYSIS
VERTICAL ANALYSIS

6 SWOT & PEST ANALYSIS

7 SUGGESTIONS ND RECCMMENDATIONS

1
 PREFACE

As an integral part of BBA studies, every student has to undergo an internship program in
a reputed institution to observe daily life business practices and problems in business life.
In order to fulfill this purpose I selected STATE LIFE INSURANCE CORPORATION
OF PAKISTAN being the only state owned Insurance Corporation and who owes its
progress to adherence to the age-old traditions of honesty, hard work, skill and
determination.

2
I
have tried my best to make this report comprehensive to provide information about the
strategic and functional areas of STATE LIFE INSURANCE CORPORATION OF
PAKISTAN.

DEDICATION

I dedicate this project to my beloved parents and honorable Teachers whose guidance and
supports always a source of determination for me.

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 ACKNOWLEDGMENT

I would like to pay all my Praises and humblest thanks to most Gracious, Merciful and
Almighty ALLAH who bestowed me with potential and ability to contribute some
material to the existing knowledge in the field of Business and made every thing
possible for me to complete my Internship

4
I
deem it as my utmost pleasure to avail this express the heartiest and deep sense of
obligation to my venerated supervisor Mr. Tahir Ahmad Khan, zonal head SLIC
Multan, and Mr.Ashraf Bhatti, Assistant Manager P&G services their skillful guidance
masterly advice and inspiring attitude made it very easy to understand about the
working of State life insurance.
I have an honor to express my deep sense of gratitude and profound indebtedness to
Syed Mahmood Hussain, Dy. General Manager B&A for his guidance, skillful
suggestion during internship and support in Financial Analysis.
I am grateful to all my teachers for their guidance and assistance thought study.
Special thanks and deep love are extended to my family and friends for their lovely
company and support.

Muhammad Farrukh Iqbal

Farrukhiqbal2005@yahoo.com
+923454739347

EXECUTIVE SUMMARY

Internship programs are the vital teaching techniques of Bahuddin Zakariya

University’s BBA program. The aim of such activities is to develop a
practical evaluation approach in students along with their studies, to get
practical exposure I selected State Life Insurance Corporation of Pakistan.

5
What ever I worked over there I tried to put that in this report.
Firstly I have given the introduction of sector (insurance sector) than its
history in Pakistan is written in this report. .I worked in six different
departments (NB, P&GS, Computer dep., PHS, B&A marketing dep) of
SLICE,I tried to write down all function and responsibilities of those
department. Than I done financial analysis of SLICE and write down
findings in this report.
I also keenly observed the strengths & weakness of SLICE and gave some
suggestion to remove the back draws.

CHAPTER NO 1

HOSTORY

6
HISTORY

Insurance began as a way of reducing the risk of traders, as early as 5000 BC in China and
4500 BC in Babylon. Life insurance dates only to ancient Rome; "burial clubs" covered
the cost of members' funeral expenses and helped survivors monetarily. Modern life
insurance started in late 17th century England, originally as insurance for traders:
merchants, ship owners and underwriters met to discuss deals at Lloyd's Coffee House,
predecessor to the famous Lloyd's of London.

The first insurance company in the United States was formed in Charleston, South Carolina
in 1732, but it provided only fire insurance. The sale of life insurance in the U.S. began in
the late 1760s. The Presbyterian Synods in Philadelphia and New York created the
Corporation for Relief of Poor and Distressed Widows and Children of Presbyterian
Ministers in 1759; Episcopalian priests organized a similar fund in 1769. Between 1787
and 1837 more than two dozen life insurance companies were started, but fewer than half
a dozen survived.

Prior to the American Civil War, many insurance companies in the United States insured
the lives of slaves for their owners. In response to bills passed in California in 2001 and in
Illinois in 2003, the companies have been required to search their records for such
policies. New York Life for example reported that Nautilus sold 485 slaveholder life

7
insurance policies during a two-year period in the 1840s; they added that their trustees
voted to end the sale of such policies 15 years before the Emancipation Proclamation.

LIFE INSURANCE

Life insurance or life assurance is a contract between the policy owner and the insurer, where
the insurer agrees to pay a sum of money upon the occurrence of the insured individual's or
individuals' death or other event, such as terminal illness or critical illness. In return, the
policy owner agrees to pay a stipulated amount called a premium at regular intervals or in
lump sums. There may be designs in some countries where bills and death expenses plus
catering for after funeral expenses should be included in Policy Premium. As with most
insurance policies, life insurance is a contract between the insurer and the policy owner
whereby a benefit is paid to the designated beneficiaries if an insured event occurs which is
covered by the policy.

THE PURPOSE OF LIFE INSURANCE:

Your need for life insurance will vary with your age and responsibilities. The amount of
insurance you buy should depend on the standard of living you wish to assure your
dependents. You should consider the amount of assets and sources of income available to
your dependents when you pass away. Social security benefits, available cash and other
sources of income and investments may not provide the standard of living you have in mind.
Life insurance helps bridge the gap between the financial needs of your dependents and the
amount available from other sources, is the amount to be provided by life insurance.

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INSURANCE BENEFITS:

Insurance Benefits encompass the facilities associated with buying of insurances. Insurance
is mainly an instrument used by consumers for hedging the future contingent risks related
with life, health and non-life general issues. Insurance benefits help the policy holder or
beneficiary in combating with the losses or hazards associated with him/her.

The policy holder buys the insurance to hedge against the future perceived losses by paying a
regular amount to he insurance company known as the Premium. Insurance companies
ensure financial reimbursement of the insured losses to the policy holders or his/her
beneficiary. This is the most coveted Insurance Benefits. But with time, more and more
insurance companies have cropped up and consequently the competition among them has
increased. Every company is trying to woo all the customers into its fold and in a way
offering more and more innovative Insurance Benefits to the consumers.

9
PAKISTAN – INSURANCE

Pakistan's life insurance sector, nationalized in 1972, operated under the aegis of the State
Life Insurance Corp. and Postal Life Insurance until 1992, when the government opened it to
private sector participation. Foreign companies are no longer barred from the life insurance
business, but they are restricted to minority ownership. Private companies function in no life
insurance areas, but the government insurance business is controlled by the National
Insurance Corp. One of the state's first steps was to standardize and reduce premium rates
and to encourage coverage among a wider segment of the population. In 2001, there was US
$$168 million of life insurance written in Pakistan.

10
INTRODUCTION OF SLIC

The insurance industry in Pakistan comprises 57 general insurers, five life insurers, the
state-owned Pakistan Insurance Corporation (PIC) and National Insurance Corporation
(NIC).When Pakistan gained independence 63 years ago it inherited a total of five
indigenous insurance companies and 77 foreign companies which enjoyed the bulk of
the business, a situation which is being reversed at present. While general insurance
was left untouched, the life insurance business was nationalized in 1972 and the State
Life Insurance Corporation (SLIC) was established. SLIC enjoyed complete monopoly

11
of the life business till 1990 when the life insurance business was reopened to the local
private sector local insurers and to private foreign insurers in 1994. At present four life
insurers, two local and two foreign, are operating in the country besides SLIC. Sources
informed PAGE that less than 2 per cent of the population in the country buys the life
insurance. The life insurance industry in Pakistan comprises State Life Insurance
Corporation in the public sector and four companies in the private sector: local EFU
and Metropolitan and foreign Commercial Union (CU) and American Life Insurance
Company (Alico).

SLIC enjoys an enviable 97 per cent share of the life market in the country, According
to SLIC statistics Individual life first year premium increased from Rs 1.197 billion in
1994 to Rs 2.2026 billion in 1995 but declined to Rs 1.7 billion in 1996. Group
premium increased from Rs 1.11 billion in 1994 to Rs 1.17 billion in 1995 and to Rs
1.24 billion in 1996. Renewal premium was Rs 3.3 billion, Rs 3.9 billion in 1995 and
Rs 4.1 billion in 1996.SLIC ‘s income, including the investment income rose to Rs 13
billion in 1996 compared to Rs 12.2 billion in 1995 and Rs 10 billion in 1994. With an
authorized capital of Rs 200 million and a paid up capital of Rs 100 million, SLIC’s
total individual life and group life business in force (sum insured plus bonuses) rose to
Rs 420 billion in 1996 from Rs 380 billion in 1973.

Besides a wide network of branches in Pakistan is also operating in UAE, Kuwait,

Saudi Arabia and UK (catering to renewal only).Life insurance being long term
business helps in capital formation and the performance of SLIC during last 25 years

show that it has made a tangible progress by accelerating the growth of savings through
insurance. But much remains to be done to increase the life insurance business in
Pakistan not only in cities but also in towns where the bulk of the population still
resides. Insurance sources told PAGE that apart from a general lack of awareness and
economic conditions the lack of infrastructure such as roads, utilities, etc., makes it
costly for the insurance companies to sell policies in the rural areas.

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The insurance industry should not only sell but also provide guidance to the people to
show that it cares. Performance of the Insurance Industry has been spectacular since
1947. In 1947 the number of Pakistani companies was five and now it is 55; and
foreign insurers in 1947 were 77 and now these are five. Premium wise Pakistan
produced Rs. 19.70 million in non-life business during 1949 and in 1996 the premia
was Rs. 7.264 billion. (Out of Rs. 7. 264 billion the share of foreign companies is
11.25%). This growth has been achieved by the private sector despite nationalization of
life insurance business in 1972, fall of East Pakistan in 1971, conversion of National
Co-insurance Scheme (NCIS), a pool of Pakistani companies, into National Insurance
Corporation in 1976, and nationalization of shipping sector, banks, ghee mills,
automobile industry and petroleum marketing companies. The loss of premia suffered
by private sector insurers on account of the above measures amounted to Rs. 350
million. The insurance industry did not lose heart but continued its efforts. It shows the
resilience of this sector as well as the professional competence and managerial skill of
the experts who are heading Pakistani insurers. It demonstrates that the insurance
industry has attained maturity. It is keeping the pace with the pace of international
insurers. Pakistan in spite of all its shortcomings is forging ahead, especially
economically. Most of the people of Pakistan have lost faith in the country, but I forsee
a great development in the near future. The reasons are privatization, deregulation and
liberalization policy of the present Government.

There are four factors that are decelerating the fast pace of the growth of insurance
industry. First is the withdrawal of tax exemption in 1979 by the government on
exceptional loss reserves. It was a great blow and it has affected the strength of
insurers. These reserves were invested through stock exchanges thereby contributing to

capital formation and also increasing solvency and retention of insurers. It should be
exempted from the tax net.

The second snag is the discriminative policy of taxation. Income on dividends, Khas
Deposits, National Saving Certificates etc is taxed on corporate basis, whereas in other
industries it is not. This discrimination affects the profitability of insurers.

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The third hurdle is the foreign exchange regulation. Insurers, at present, have to obtain
permission from State Bank for reinsurance remittances to overseas reinsures, when the
movement of foreign currency in our country at present is free and open. There is no
restriction in bringing or taking out of foreign currency in our country. This restriction
entails a lot of delay and thus, foreign exchange fluctuation loss is sustained by
insurers. It should be exempted.

The last but not the least problem is the taxation of provisions made in balance sheets
of insurers respecting general reserves, or catastrophic reserves or claims reserves or
tax reserves. It should be exempted from tax at

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OBJECTIVES

 To run life insurance business on sound line.

 To provide more efficient service to the policyholders.
 To maximum 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 he wider interest of the community.

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MISSION STATEMENT

To remain the leading insurer in the country by extending the benefits if 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.

16
CHAPTER NO 2

DEPARTMENTS OF STATE LIFE

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State Life Insurance Corporation (SLIC) has divided its whole setup into
twelve departments. The organization setup is same in Zonal Offices,
Regional Offices and Principles Office. All the Regional and Zonal
departments are directed from the Principle Office. The twelve Departments
are currently performing services in SLIC. There are two Departments
which are working only in Principle Office at Karachi. The function of each
Department that are common in all zonal and Regional Offices are given
below:

1. New Business Department

2. Policy Holder Service
3. Budget and Accounts Department
4. Personnel and General Services Department
5. Agency Department
6. Internal Audit Department
7. Computer Department
8. Field Manpower Development Department
9. Group Insurance and Pension Department
10. Commission Department

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NEW BUSINESS DEPARTMENT

New business (NB) is considered the soul of insurance companies, profit

ability and survival
of the business depends on the NB.

The working of NB department is as follows:

• SR SO. SM and Area Managers are the field staffs, who get the new business from
the market.
• Whenever a new contract is made a proposal form, medical or non-medical
application form is required.
• Proposal number is allotted to each applicant for future reference
and computer
working.
• Decline and deferred cases are checked for which centralized data of entire country is
available through Principal Office Karachi.
• Then proposal forms are send to the under writers.
The form is perused and accepted,
rejected or deferred by the
under writer.
• Chief medical officer of the state life assist the under writers
deciding
in medical
fitness.

SECTIONS IN NEW BUSINESS DEPARTMENT

PROPOSAL NUMBER

In order to fulfill the recognition of the Insurance Policy, NBD allocates a number to
each Insurance Policy for future references. NBD also verifies whether the client is a new
customer and a past customer.

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UNDERWRITTING

Underwriting is the process through which the underwriter assesses the risk associated
with the Insurance proposal. Underwriter verifies the personal information provided in
the proposal form. If he feels that client should have a medical checkup than SLIC has its
own panel of doctors to provide medical assistance.

PREMIUM CALCULATION

After underwriting, the premium of sum assured is calculated in accordance with the rate
book provided by the SLIC.

POLICY ISSUE SECTION

After premium calculation the insurance and revenue stamps are embossed on the policy
bond and the policy document is sent to Client. One copy of Policy document is sent to
Policyholder Service Department for record purposes.

New Business Department considers the risk associated with the proposal and estimates
the premium for the client through a formal agreement between SLIC and the client.

BUDGET AND ACCOUNT DEPARTMENT

This department deals in

• Cash collection

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 • Cash disbursement

• Salary preparation

• Budget peroration

• Agent commission

• Interest

The detail working of some of the important section

Collection section

It receives all the cash and cheques related to the premium collection.
Different account
numbers are used for different policies and other heads.

CASH DISBURSEMENT

TYPES O PAYMENT

• General payment

• Claims payment

• Surrender payment

PROCEDURE FOR PAYMENTS

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For each cash disbursement first the voucher is prepared and signed by authorized
officer, for the person to whom the paymentmade.
is this voucher isaudited in case of
having the amount in excess of RS 10000 Theses vouchers are punched (feeding) in the
computer. Voucher lists are prepared. Errors and omission are checked

After these the cash is maintained .cheques are prepared and these cheques are sent to
concerned department. Bank statement Is prepared by the authorized bank on daily
basis. These bank statements are added to computer. The data is than sent to principal
office. Different ledgers are prepared in PO and than sent to Multan zone

Following lists are prepared by this section

• Date wise total lists of cheques cashed

• List of cheques issued

• List of unmatched cheques of bank and cash book

Certain loan facilities for officer and staff members which are as follows

• 2 months pay in advance

• Convince or RS 55,000

• Loan from provident fund ca n be drawn equal to twelve basic s salaries. The
loan is refundable without any interest. However staff member having age more
than 50 years can get on non refundable loan

• Loan from provident fund can be drawn equal

to twelve basicssalaries. The loan is
refundable without any interest However, staff
member having age more than 50 years can
get on non refundableloan.

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P A Y R O L L S E C T IO N

In B&A department salary of the employees is calculated. Different allowances are offered to
the employees loan facilities are available for
the employees. Tax is deducted from salary. A
provision of recoveries of the loan is made.

B U D G E T P R E P A R A T IO N

Budget is prepared annually. Proposed budget is sent to PO. The funds of different heads of
proposed budget are transferred to zonal office

Multan.wholly or partially. It is assumed that each year First Year (FYP) is increased by
25%. According to this base the commission of the agents are calculated and budgeted.
Following are the main types budget
• Income budget
• Claim budget
• Commission budget
• Admin expenses budget

Admin & claim budget is estimated by considering previous year actual expense.
Zonal & regional office has separate budgets. If the funds transferred from PO
Karachi are less than the proposed budget, additional funds are acquired from PO
whenever required. The budgetregister is maintained in the department for
employee/party/expense is debited and cash is credited. No additional expense is
made when budget is short.

Commission section
In B & A department, the commission is calculated by the new business department
is sent to commission section to calculate the commission of agents. It has four
copies, one for commission section and three for agents (SR, SO, SM)

PROCEDURE FOR COMMISSION PAYMENT

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Following are three methods used by SLIC for paymentcommission
of to agents:

• Payment cheques

• Authority card

• Payment by post

In first method, the payment is directly made to the agent by cheques. In second method,
the payment is made to other person authorized by agent by signing the "authority card" in
the third method the commission is paid by post on his postal address on his direction.

Three copies of first year premium receipt (FPR) are prepared out one which one copy is used
for payment of commission to SR and second
used for paym ent
to SOand third Copy is used for
Com mission SM

The commission rates are as given below:

First Year Premium Second Year Premium Renewals

SR 35 % 10% 5%
SO 15% 5% 2%
SM 08% 1% 0.5%
For r the reconciliation purpose, the variation list is received from computer section which
is manually checked and corrected according to record.

Imprest

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 circularsarrive from PO to Multan zone mentioning the different type of
privileges on different FYP targets. These privileges are free petrol, telephone,
electricity, clerk wage, stationary and other facilities etc

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25
PERSONAL & GENERAL SERVICES DEPARTMENT (P&GS)
Mr. Ashraf Bhutti is the incharge of P&GS. The office & general matters are dealt in P&GS
Department. This department has the sole responsibility and authority of the disciplinary action
of the employees. Selection, recruitment, termination of the employees is the main functions of
the P&GS Department. This department also deals in medical facility to the office employees,
leaves and similar other general services. The stationary used in different department is
maintained in this department. The daily correspondence is dispatched in this department.
Followings are the main sections of this department:

PERSONNEL SECTION

All the employee matters such as appointment, promotion, demotion, transfer and
allowances are dealt by personnel section. Annual Confidential Reports – ACR the
employees are prepared, under the supervision of this section, by the departmental
heads.

For the appointment of the staff, an advertisement is initiated in the Newspaper. Zonal
Head is competent authority for this appointment. This appointment also depends on
the business of the Zonal Office. The appointment of officers is done by Principal
office (PO) Karachi or Regional Office. Selection Committee constituted by Zonal
Head conducts test and interview.

For promotion of the employees, there ACR’s are necessary and minimum three years
are required to remain in one cadre. Each year the employees are promoted by the
criteria and instructions set by PO Karachi. PO or Regional Office does promotion of
officers.

In Multan Zone, there are 362 office employees, 9 Sectors Head and 43 Area Manager
(AM).

MESICALSECTION

All the hospitalization expenses are beard by SLIC provided that these are incurred in
approved hospital (i.e. In Multan the approved hospitals are Fatima, Medicare, and
Govt. Hospitals). The expenses of medicine are reimbursed. The reimbursement of
medicine is not allowed to staff (Having grade 1 to 8) but they are given Rs. 600 p.a. in
shape of salary as medical allowance.

LEAVE SECTION

Following are the main two types of leaves:

1. Casual Leave

2. Medical Leave

20 days casual leaves are allowed to all employees in a year. The medial leave or
application leave is allowed for 48 days in a year. Unused leaves are accumulated and
after two years these leaves in excess of 180 days can be encashed. In case of death all
leaves, not utilized, can be encashed.

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 his own choice at the expense of
SLIC. A good location is selected by the AM. After selection of place, Zonal Head is
informed about the location, by application written by AM. This application is
transferred to P&GS Department for the analysis of location of the office. This location
is annualized by Zonal Rent Committee (ZRC). A lease agreement is made with the
landlord after analyzing the approved map for the location and 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.

STATIONARY SECTION

This section maintains the record of stationary such as paper, pencil, envelops, printed
letters, forms, 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.

CAPITAL SECTION

This section is responsible for purchase, sale and maintenance of Furniture & Fixture,
Equipment etc. A Zonal Procurement Committee (ZCP) is constituted for the purchase
of assets. The assets are purchased from the suitable supplier after critically analyzing
the quotation offered by different venders.

Each year assets are depreciated @ 10% p.a. The entry for the purchased assets is made
in the Register for Fixed Assets. Each year the closing balance is intimated to PO
Karachi.

AGENCY DEPARTMENT

Service provided by the SLIC are intangible 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 intangible products (Insurance
Plants). In order to maintain the record of the field force agency department was
established. The main function of this department includes recruitment, promotion, and
termination of the field force, allied and medical facility for field force. This
department is also responsible for issuance and renewal of licenses 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 qualification is required metric

Age at entry must not be less than 18 years.

Annual Quota for SR is Rs. 10000

Application for the issuance of license is necessary and it is renewed after each 3 years.

An application Form, along with license fee Rs.50, attested photocopies of documents
and Nomination Form is submitted to the 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, upon fulfillment of certain terms and conditions and on achievement

of business targets, to SO. Similarly SO is promoted to SM and SM to AM.

TERMINATION & DEMOTION

Any agent of SLIC, who behave negatively, violates the rules & regulation or indulge
fraud or mal-practice, can be terminated by the Zonal Head. Any agent who fails to
meet the annual quota of FYP is demoted to immediate lower rank of the field force.

COMPUTER DEPARTMENT

Computer Department are responsible for maintenance of hardware and software.

System Specification
The System running at Multan Zone is RISC 6000 where RISC stand for Reduces
Instruction Set of Computer.

Operating System AIX Version 3 where AIX stand for Advance Instruction Execution.
This system is purchased from IBM. Oracal 7 Language is used.

They are using the Hard Disk Capacity 900 G.B. Backup taken at every week (on
Friday). They sent monthly data to P.O. in a floppy in the form of a file having
extension of DMP.

Net Working

Technology used is the mixture of star and Hierarchical Net work. There is a
distribution box which us used to connect Terminals and Printers. This multiplexar
has 16 ports and one terminal or printer can be attach to one port. Multiplexar has two
slots Input and Output Slots. Input slot main computer i-e CPU is connected and the
output slot, the multiplexar is attached so in this way terminals and printer are Net
Work and are placed in different department. 200 Terminals can be connected with this
system.

Computerize System

• New Business Department.

• Policy Holder Services.
• Voucher System.
• Agency Channel verify.
• Payroll.
• Maturity.
• Policy Inquiry System.

POLICY HOLDER SERVICE DEPARTMENT

The Policy Holder Department deals with the services provided by the
corporation to his Policyholders. The Department is divided into following
cells to provide better facilities to the Policyholder.

SECTIONS

• LOAN
• SURRENDER
• MATURITY
• DEATH CLAIM
• REVIVAL
• SERVIVAL
• ALTERATION

LOAN SECTION
This section given a loan to policy holders upto 80% of surrender value.
if written request from policy holder then upto 90% of surrender value.
compound interest are charged on loan payment a @ 13 p.a.

DOCUMENTS FOR LOAN APPLICATION.

• Loan application.
• NIC copy.
• Policy bond
• Last receipt of premium.
• Schedule form / stamp paper.
• Bank account are attested from bank manager.
• All the above documents are attested from gazetted officer.

SURRENDER SECTION

This section performs a function of closing the policy if a policy holder wants. First of
all we asked the reason for surrender the policy and then motivate the policy holder.

PROCEDURE

Application.
NIC copy.
Policy bond.
• Bank account are attested from bank manager.
 • Discharged voucher.
• Issuing a receiving receipt.
• Policy holder documents that are received are attached with
policy holder file.
• Collection sheet & surrender value sheet are attached with
file.
• Post-audit
• Cheque preparation.
• Final payment.

MATURITY SECTION

This section provides a services to the policy holder after maturing the
policy. Policy are matured after one year of last payment . At maturity
date net payable amount are paid to the policy holder. Reminder are sent to
policy holder after 15 days of maturing the policy. At maturity the
following documents are required from the policy holder.

• Policy bond.
• NIC attested copy.
• Payment voucher.
• Pre- audit.
• Preparation cheque.
• Final payment.

DEATH CLAIM
Claim of policy holder are paid after the death of policy holder to the
nominee.
Process of death claim are as under:

• Application from nominee.

• Death certificates of Union Council.
• NIC Copy (both policy holder & nominee).
• Claim form.
• Claim papers.
1- Medical certificates.
2- Identity certificates
3- Employee certificates.
• Reserves for claim
• Investigation.
• Voucher preparation.
• Post audit.
• Cheque preparation.
• Cheque delivery.

SERVIVAL BENIFITS SECTION

Servival benefit are allowed only to 05 table / term 15,18,21.This policy is called three
payment plan. The policy holder has the right to get 25% of sum assured at the end of
1/3 term, 25% at 2/3 of the term and 50 % at the maturity date these installments are
calls servival benefits.

REVIVAL SECTION

Revival section provides a function of renew a policy which premim are

not paid for one or more year after due premium.
There are two type of revival.

• Ordinary revival.
• Special revival.

ORDINARY REVIVAL.

If a policy holder fails to pay a premium within 30 days of the second year premium,
the policy is laps.

SPECIAL REVIVAL

If a policy holder does not paid a premium of more than 2 years.

REDUCTION OF LATE FEES

Rs.1---2000 = 90 days waves + 50% of remaining amount.

2001----4000 = 90 days waves + Rs.1000 are also waves in

remaining amount.
4001---- above = 90 days waves + 25%waves of remaining amount.
ALTERATION SECTION

Alteration section provides a services to the policy holder for alteration in policy bonds.
for example, changing in the name, policy table, policy term , option , NIC card no. or
address are changed. Then application for alteration are sent to alteration section.

MARKETING DEPARTMENT

Management Hierarchy Of Marketing Department.

The head of marketing department is TAHIR AHAMD KHAN . The prime responsibility of
this department is to do and control the different activities in order the capture the
potential customer. This department controls the activities of the channel members.

BASIC PURPOSE OF MARKETING DEPARTMENT

The main purpose of the marketing is to create awareness in the potential customers. By
doing advertisement activity and other promotional activities we can enhance awareness
in our customer.

ADVERTISING

Advertising means, any form of presentation and promotion of ideas,

goods or services by an identified sponsor on behalf of the organization
or by organization itself.

IMPORTANCE OF ADVERTISING

• The many forms of advertising contribute uniquely to the overall

promotion mix. Advertising can reach masses of geographically
dispersed buyers at a low cost per exposure;
 • It allows the company to dramatize its products through the artful
use of visuals, print, sound, and color. On the one hand,
advertising can be used to build up a low term image for a
product. On the other hand it can trigger sales of the organization;

• It enables the seller to repeat a message many times, and it lets

the buyers to compare the messages of various competitors.
ADVERTISING IN THE SLIC

In SLIC, two types of advertising campaigns are launched:

• One is basically used for improving and enhancing the image of
organization;

Other is used for the promotion of policies and Plan of SLIC

Different types of media are used for the above mentioned
advertising campaigns which are as follows:
PRINT MEDIA
Print Media includes the advertising launched in the Newspaper and
Magazines. Pakistan Times, The Nawa-I-Waqat, The Khabrain , The
Nation and The Jang provide this service. Ads are also published in
magazines such as Pakistan & Gulf Economist.
National level newspapers get ads of bigger size. These ads are of
quarter paging or 108 centimeters. Local Newspapers get ads of smaller
size. These ads are given through advertising agency.
ELECTRONIC MEDIA
SLIC releases advertising in electronic media such as PTV and Radio.
The main objectives of this advertising are to create emotional feelings
and personal relationship of the families. The most popular ad “Aey
Khuda Meray Abu Salamat Rehenh” is released in PTV and Radio.
OUTDOOR MEDIA
Outdoor Media includes Unipole Hoarding, Billboards, Neon Signs and
Televisions. Now the advertising through television is abolished due to
road accidents.
The objective of this advertising is to create long term relationship with
customer and create image of the corporation in the eyes of clients.
PERSONAL SELLING
SLIC has a well-trained field force, which goes a long way in promoting
the corporate image of SLIC on one hand and product on the other hand.
OTHERS
Other media includes the private publication of SLIC such as pamphlets,
Dairies, Calendar & Brochures and Eid Cards that are distributed to
clients by Zonal Offices with the intention to create good image and
relationship.

ADVERTISING AGENCIES WORKING FOR SLIC

The advertising agencies working for SLIC are as follows:

• Time & Vision Advertising
• United Advertising
• Bond Adverting

• Oscar Advertising Agency

• Maxim Advertising Agency
Advertising agencies working for cooperation are playing a vital role in
the promotional campaign of State Life. They help the corporation in
allocating its Promotional Budget among different media according to
the needs of campaign. Advertising agencies are also help corporation in
getting for corporation’s ads on TV, Radio and Print Media on the
commission basis.
CHAPTER 3

INDIVIDUAL LIFE PLANS:

WHOLE LIFE ASSURANCE:

It is a unique combination of protection and savings at a very economical premium.

Death at any time before age 85 years terminates payment of premiums and the sum
insured and attached bonuses become payable. In the event the insured survives to the
policy anniversary at age 85 years, the policy matures and the sum insured plus bonuses
become payable. Under this plan the rates of bonuses are usually much higher than the
other plans and they help in increasing not only protection but also the investment
element of the policy substantially.

This plan is best suited for youngsters who have at initial stages of their careers and
cannot afford to pay high premiums. Individuals who anticipate requirement of a lump
sum in far future can also opt this plan.

ANTICIPATED ENDOWMENT ASSURANCE:

This is a modified form of endowment assurance and is also called ‘Three Payment
Plan’. Besides fulfilling the long-term financial needs, it also helps in meeting the
short-term financial exigencies. As the name suggests, the plan offers three payments
throughout term of the policy. The plan offers survival benefits equal to 25% of sum
insured on completion of 1/3rd and 2/3rd term of the policy. If the policyholder does
not withdraw the survival benefits, a very attractive special reversionary bonus is
available. On completion of term of the policy, the remaining 50% sum insured plus
accrued bonuses shall be payable. If the life insured expires during term of the policy,
sum insured, accrued bonuses, unclaimed survival benefits and special reversionary
bonuses are payable. The plan is suitable for the individuals who have long-term
financial needs but also anticipate requirement of money relatively earlier. Three
Payment Plan helps fulfilling these short-term financial needs without terminating the
actual contract.

ANTICIPATED ENDOWMENT ASSURANCE:

It’s a safest and surest method of guaranteed cash provision either at a specified time or
at death (Allah forbid). Under these policies, the sum insured plus bonuses are payable
at the end of the specified number of years or at death of the life insured if earlier.
Premiums are payable for the specified number of years or till death, if earlier. The
benefits under the plan can be further increased by attaching supplementary covers. The
plan serves the requirements of a family in various shapes by way of financial help at
retirement, education of children or provision of capital for business.

CHILD EDUCATION AND MARRIAGE ASSURANCE:

Child Education & Marriage Assurance is a plan for the protection of

child’s future. It provides a lump sum benefit for the child at the
completion of the policy term. On completion of term of the policy, full
sum insured together with the accrued bonuses become payable to the
policyholder.

If the policyholder dies (Allah forbid) before completion of the term, a

family income benefit of Rs 240 per 1000 sum insured per annum is paid to
the child until the completion of policy term. Further, future premiums
under the policy are waived and policy remains in force with full sum insured and
continues to participate in State Life’s surplus and receive bonuses. Upon the
completion of policy term, the child gets two options of either getting the proceeds in a
lump sum or in five equal installments.

Child Education & Marriage Plan is suited for the parents who are conscious about the
future of their children. The term of the plan is such that the lump sum benefit becomes
payable when the child attains a predetermined age of 18, 21 or 25 years. These ages
may be selected considering the occasion at which children generally need financial
assistance for higher education, marriage, or setting up business.

CHILD PROTECTION ASSURANCE:

This is a joint life assurance and covers the lives of child and either of the parents. If
the policyholder and the child both survive full term of the policy, sum insured and
accrued bonuses become payable. If the policyholder dies before completion of term of
the policy the payment of premiums ceases and the child is paid an income of Rs 100/-
per thousand sum insured per annum till the completion of the policy term. On
completion of policy term, sum insured inclusive of bonuses accrued till the death of
the policyholder is paid to the child. If the child dies (Allah forbid) before maturity of
the policy and during lifetime of the policyholder, the death claim payable to the
policyholder depends on the age at death of the child.

JEEVAN SATHI ASSURANCE:

This is a joint life plan and covers lives of two partners say husband and
wife simultaneously. Premiums are payable till the end of the specified
term or till death of either of the insured persons, if earlier. The plan
contains extensive benefits; an overview of which appears as under:

On the death of the first life, the sum insured will be paid to the survivor.
Further premiums under the policy will be waived, but the insurance
protection of the second life will continue. Also, the policy will continue
to participate in profits of the Corporation. On death of the second life,
again the sum insured will be paid together with the attaching bonuses. In this event the
policy will terminate.

If the second life survives the term of the policy, he or she will be paid sum insured
together with the attached bonuses, even though the sum insured has been paid once, on
the death of the first life. If both the lives survive the term of the policy, the sum
insured will be paid to them jointly, only once, together with the attached bonuses.
Different supplementary covers are also available for increasing coverage under the
policy. Click here for supplementary covers.
MUHAFIZ PLUS ASSURANCE:

Muhafiz Plus provides a substantial sum of money on maturity or earlier

death (Allah forbid) of the life insured. On maturity, the policyholder
will receive sum insured plus bonuses attached with the policy.However
if the life insured dies before completi on of term of the policy, basic
sum insured plus attached bonuses will be paid to the dependants
immediately. In case of death due to accident, the double of the sum
insured is paid. In addition, the dependents will also be paid an income
of Rs 240 per thousand sum insured per annum for a fixed period of 15
years. The first payment will fall due on the policy anniversary immediately after the
death of the life insured.

NIGHEBAN PLAN:

This plan provides term insurance cover for a period ranging from 5
to 10 years. As the name suggests, this plan is meant to provide
protection during the term of the policy only i.e. sum insured is
payable on death if it occurs during the term of insurance while the
policy is in force. The plan does not carry any survival benefits,
maturity benefits, surrender values, loan values etc. The policies will
be without profits. The plan is available in two versions namely, with
single premium and with annual premiums. Attaching certain
supplementary covers can widen the coverage under the plan.
OPTIONAL MATURITY ENDOWMENT:

It is an endowment assurance with a built in option to mature early. The plan is

available for individuals aged 20 to 45 years. The policyholder has following options
regarding maturity of this plan.

After the policy has been in force for 20 years or more, the policyholder gets an option
to mature the policy for a proportionately reduced sum insured.

After the policy has been in force for 20 years or more, the policyholder, depending on
his or her needs, can mature the policy in parts.

Let the policy mature at originally selected term. In this case the policyholder gets an
additional bonus.

SADABAHAR PLAN:

Sadabahar is an anticipated endowmen t type with-profit plan that

provides lump sum benefit at certain stages during the premium-
paying term or on earlier death. In addition, this plan has a built-in
Accidental Death Benefit (ADB) rider so that the policyholder gets an
additional sum assured in case of death due to an accident. This plan is
a safe instrument for cash provision at the time of need. With this plan,
the policyholder can secure greater protection and continued prosperity for the family
at an affordable cost. Admissible Ages and Terms this plan is available to all members
of the general public, aged from 20 to 60 years nearest birthday. Both males and
females may purchase this plan. Terms offered under this plan are 12, 15, 18, 21, 24, 27
and 30 years.
Survival Benefits

On completion of one-third of the policy term, 20% of basic sum assured can be taken
by the policyholder. Another 20% of the sum assured can be taken on completion of
two-third of the policy term and the remaining 60% of basic sum assured plus accrued
bonuses (if any) shall be payable at the end of the policy term in the event of survival
of the assured.

If the option to withdraw an installment of 20% sum assured is not exercised on the due
date or within 6 months after the due date, a special bonus will automatically be added
to the policy at the end of 6 months. In this event:

On death of the assured while the policy is in force, the special bonus will be payable in
addition to

(1) Basic Sum Assured

(2) Other Reversionary Bonuses accrued on the policy and

(3) the amount of any installment left with State Life.

On the maturity date, the special bonus will be payable together with all the
installments of the sum assured remaining with State Life, in addition to regular
reversionary bonuses accrued on the policy.

So long as the policy remains in force, the policyholder may surrender the unclaimed
installment of sum assured together with the related special bonus. The aggregate cash
surrender value of the two shall not be less than the amount of the said unclaimed
installment.

The reversionary bonuses as per usual practice will continue to be allotted each year on
the basic sum assured (if in force) as and when Actuarial Surplus is declared. However,
the unclaimed installments of the sum assured and related special bonus will not
participate in State Life’s Actuarial Surplus.

Death Benefits:

The full basic sum insured plus accrued bonuses are payable on death of insured any
time while the policy is in force. In addition, if death occurs as a result of an accident,
additional amount equal to one basic sum assured, subject to maximum limit, will be
paid. The usual maximum on the ADB of Rs. 4 million will apply and premium will be
calculated accordingly.

Bonuses:

This policy will participate in State Life’s surplus. Rates of bonus applicable will be
25% higher than those on anticipated endowment plan.

SHAD ABAD ASSURANCE:

Shad Abad Plan is an extended form of endowment assurance. The

benefits under the policy increase manifold in the event of death of
the life insured. On completion of term of policy, sum insured plus
bonuses attached to the policy are payable. However, on death
during the policy term, the death benefit consists of double of sum
insured with accrued bonuses. Incase of death due to accident, the
death benefit consists of four times the sum insured plus bonuses.
This plan meets the requirements of those who appreciate the basic
savings purpose of endowment assurance but also like some
additional cover to protect loved ones in case they die, Allah
forbid, before maturity.

SUNEHRI POLICY:
Sunehri Policy is an innovative life insurance product. It is flexible, secure and meets
the challenges of inflation quite economically. Under a special feature of this plan,
from third policy year onwards, sum insured under the policy and premium will
increase by 6% per annum without providing any evidence of insurability. From the
third policy year onward, the policyholder is provided with a statement showing the
build up of cash value of the policy and sum insured for the year. The policy also
participates in the surplus of State Life and currently the rate of bonus is Rs 105 per
thousand per annum of the adjusted opening cash value.

Death Benefit:

If the life insured dies during first two years of policy issue, then the initial basic sum
insured will be payable. If the life insured expires in third or later policy years, the
death benefit payable will be equal to sum insured applicable to the policy year of death
plus adjusted opening cash value.

Maturity Benefit:

Policy matures on policy anniversary nearest to age 70 years of the life insured. The
maturity benefit equals to cash value of the policy at age 70.
CHAPTER 4

INDIVIDUAL LIFE CLAIM

Procedure for Maturity Claim

It is a matter of great pleasure that your policy has matured. It is a time to fulfill the
goals that you had set years back. For collecting maturity benefits, please send a written
request along with following documents to your servicing State Life zonal office

1. Original policy document

2. Copy of National Identity Card
3. Maturity discharge voucher duly verified by your bank
4. If your signature has changed over the years, please send us your three
specimen signatures of old and new styles

Procedure for Death Claim

State Life insurance policies provide wide range of benefits in case of death of the
persons covered against them. If your loved one covered under any of State Life has
expired, you should lodge a death claim with us. All you have to do is to send a written
intimation to the zonal office of State Life servicing the policy against which you are
lodging a death claim.

PROCEDURE FOR OTHER CLAIM

Survival Benefit Claim:

If your Anticipated Endowment Assurance policy has completed 1/3rd or 2/3rd term of
the policy, you can withdraw a sum equal to 25% of the sum insured of your policy.

For withdrawal of Survival Benefit, please send a written request along with following
documents to your servicing State Life zonal office:

i. Original policy document

ii. Copy of National Identity Card
iii. Survival Benefit discharge voucher duly verified by your bank
 iv. If your signature has changed over the years, please send us your three
specimen signatures of old and new styles

Injury Claim:

If your State Life insurance policy contains an Accidental Death & Indemnity Benefit
(AIB) supplementary cover, and you have sustained an injury as specified in the
contract, you can apply to us for an injury claim within 20 days of sustaining the
accident. For lodging your injury claim, please send a written intimation of the accident
mentioning therein the date of accident to your servicing State Life zonal office

Procedure for Loan against Insurance Policy:

Policy No:

Policyholder’s Name:

Date of Birth:

NIC No:

Address:

Email Address:

Tel: (Res): (Off): (Cell):

Loan Required (As %age of net surrender value of your policy):

___ 80% ___ 70% ___ 65% ___ Other

Procedure for Volunteer Policy Surrender

:
Policy No:

Policyholder’s Name:

Date of Birth:

NIC No:

Address:

Email Address:

Tel: (Res): (Off): (Cell):

Action Required: Surrender

Group and Pension Claim

Procedure for Death Claim:

Procedure / requirement for the settlement of death claims

i. Death intimation, on death of any government employee, the department /

employer sends the written death intimation to the In charge Claims concerned
G&P zone along with the death certificate.

ii. On receiving the death intimation, the department / employer would sent the
claim forms ‘C’ & ‘ D’ by the claim department of the Group & Pension Zone.
 iii. The Department / employer is required to fill in the claim forms ‘C’ & ‘D’,
properly sign and stamp them and send them back to the concerned G&P zone,
along with the following requirements.

i. Death certificate, issued by Local Municipal body, Cantonment bodies, Union

Councils, Services hospital, Government hospitals, Semi Government hospitals,
Railway hospitals and Trust hospitals (any one of the above). In case of tribal
areas, the death certificate issued by political agents, Commissioner, Assistant
Commissioner, Magistrate Class-I are also acceptable.

ii. NIC of the deceased and the claimants (attested photocopies).

iii. Pension book in original for post retirement death (the same would be
returned back after verification).

iv. Attestation: All the photocopies must be attested by the concerned Gazetted
officer.

iv. The provision of all above requirements would ensure the quick settlement of
the claims.

v. Deficiency of any one of the above would result in the delay in the claim
settlement.

Commercial Groups:

Procedure / requirement for the settlement of Death/Disability Claims

i. Death intimation: The policyholder/employer is required to send the written

death intimation, to the In charge Claims of concerned Group & Pension zone.

ii. On receipt of intimation, after necessary checking, the necessary claim forms
would be sent to the policyholder/employer by the Claims department of the
Group & Pension zone.
iii. The policy holder/employer is required to fill in the claim forms, properly sign
and stamp them and send them back to the G&P zone along with the following
requirements.

For Death claims:

i. Death certificate, issued by the local bodies, cantonment board, services

hospitals, government hospitals, semi government hospitals and railway
hospital. (Any one of above)
ii.

a. For Age proof:

iii. School/college certificate showing date of birth
iv. National Identity card
v. Valid passport
vi. Discharge certificate (in respect of ex-defense forces Personnel)
vii. Certificate of age by the policyholder organization
viii. Birth certificate issued by local body/cantonment board
(Any one of the above)

iii. Last attending physician’s statement.

iv. Post Mortem report and FIR/police investigation report in case of Accidental
death benefit.

B. For disability claims

I. Employee’s statement.

ii. Employer’s statement.

 iii. Attending Surgeon’s statements.

(Claim forms A, B, and C, respectively).

iv. X-rays and medical investigation reports etc, if any.

(All the photo copies must be attested by the concerned Gazetted Officer).

iv. The provision of all above requirements would ensure the quick settlement of
the claims.
v. Deficiency of any one of the above would result in the delay in the claim
settlement.

CHAPTER NO 5
FINANCIAL ANALYSIS
HORIZONTAL ANALYSIS
1) BALANCE SHEET OF SLIC
LIABILITIES & OWNER’S EQUITIES 2008 2007 2006 2005 2004
Share Capital and Reserves
Authorized share capital 50 0 0 0 0
Issued, Subscribed and Paid-up Shares
capital 46.66667 20 20 20 0
Accumulated Surplus -47.0657 26.8231 55.5503 51.72448 0
Net shareholder’s Equity 28.38173 21.33102 26.93501 26.18868 0
Balance Of Statutory Fund Including
Policy Holder’s Liabilities 105.8426 81.80641 60.02554 11.30473 0
Deferred Liabilities
Staff retirement benefits 1363.357 1247.243 1254.827 15.74951 0
Creditors and accruals
138.080
Outstanding claims 9 99.10492 72.3503 9.020875 0
Premium received in advance 611.4846 516.3021 411.9466 5.168904 0
Amount due to others insurer 218.2299 129.7406 143.9866 26.12724 0
209.957
Amount due to agents 4 119.0238 93.79025 -23.2395 0
269.520
Accrued expenses 3 173.9624 102.0177 28.73734 0
Income Tax Payable -100 -8.17742 -62.44 -100 0
196.780
Inter fund balance 8 363.8114 162.2941 -96.4168 0
18.4983
Others 4 -43.4775 -40.7949 -31.4699 0
159.454
1 112.4039 80.25949 -2.36123 0
Others liabilities -100 -100 -100 0 0
109.908
Total Liabilities 4 84.5008 62.16152 10.75883 0
Total liabilities and Equity 109.086 83.86354 61.80615 10.91449 0

(ASSETS PORTION)
Cash and bank deposits
Cash and others -52.5084 -66.7504 -60.9086 -15.9488 0
92.6193
Current and others 4 -48.9681 19.13514 17.60677 0
Deposits maturing within 12 months 419.4071 266.3783 335.6437 66.29177 0
Fixed deposits maturing after 12 months 79.08288 23.63152 -1.88036 -10.5675 0
264.956
2 135.2916 187.7734 38.99388 0
Loans secured against life insurance
policies 153.5348 112.3802 71.44092 8.835894 0
Loans secured against others assets
42.2326
To employee 2 42.56103 41.31515 -6.13052 0
To agent -42.2871 -41.7277 -43.587 -23.3443 0
13.7179
Others 5 -21.4957 -49.5299 32.13675 0
29.8475 29.72321 28.02431 -8.05082 0
7
Unsecured loans
113.804
To employees 4 111.7844 106.1541 -11.9654 0
67.7575
To agents 9 61.30764 40.76635 -21.9387 0
Others
102.427
6 99.31314 89.99873 16.64638 0
Investments
93.3910
Government securities 5 78.96664 51.11245 10.57931 0
Others fixed income securities -39.7118 -66.925 -67.4404 -9.13959 0
201.286
Listed equities 9 166.0236 150.7825 16.41283 0
519.654
Unlisted equities 1 -22.5639 -22.7285 -13.2849 0
Holding in subsidiary companies 0 0 0 0 0
Less: provision for diminution in value -12.6719 -24.7743 -24.5764 -17.0329 0
101.918
8 83.14125 57.38209 10.56067 0
Investment property
14.8491
Cost 9 9.139894 6.99261 0.752499 0
Less: provision for impairment in value -6.65635 -6.19195 -5.88235 -2.63158 0
Less: accumulated depreciation 73.09534 62.49654 52.41697 13.68772 0
-2.82526 -7.05198 -6.79214 -3.17297 0
Others assets
Premium due but unpaid 347.3359 321.2075 214.9668 11.00388 0
Amount due from others insurer 292.4861 41.60787 108.9626 -83.2458 0
Agent balances -36.1963 -36.1963 -34.3558 -1.22699 0
Investment income due but outstanding 24.58117 13.38542 4.366863 -13.4503 0
Investment income accrued 2714.639 2293.848 1989.321 -60.9865 0
Taxation -97.5183 -100 -100 3.483621 0
4.15778
Prepayments 9 2.022984 4.450564 -1.80727 0
196.784
Inter-fund balance 8 363.8177 162.2977 -96.4168 0
Sundry receivables -80.2896 -61.7234 -79.1023 -46.9725 0
Others -91.8593 -93.0644 -93.3167 -13.6019 0
68.4128
9 58.3409 23.60692 -5.10066 0
Fixed assets-tangibles
Furniture, fixture, office equipment
Computer and vehicles 46.95191 36.38195 29.85962 20.34659 0
Less: accumulated dep. 36.00222 38.09953 32.86283 6.880404 0
123.231 24.41671 8.938147 114.1568 0
 3
Total Assets 109.086 83.86354 61.80615 10.91449 0

2) PROFIT AND LOSS ACCOUNT STATEMENT

Investment income not attributable 2008 2007 2006 2005 2004
to statutory
funds
Return on government
securities -34.335802 -30.739763 -27.740534 -51.714513 0
Interest income on loans and
Advances to employees -1.5068591 -2.3313668 -20.093823 -32.148696 0
Interest income on bank
deposits
Gain on sale of investment
Net investment
income -3.929141 -14.486764 -18.261428 162.458 0
Expenses not attributable to statutory funds 46.36159 27.231808 2.4756189 -11.702926 0
Surplus appropriated to shareholders fund 94.788045 42.025084 26.395299 -29.497377 0
Profit before
Tax 59.779997 21.922591 10.568305 38.940233 0
Tax expense 53.839842 12.787168 -73.286224 47.686249 0
Profit after Tax 62.966468 26.823096 55.550298 34.248618 0

Earnings per share - basic and diluted 33.336201 3.7643511 55.550298 34.248618 0

VERTICAL ANALYSIS
1) BALANCE SHEET OF SLIC

LIABILITIES & OWNER’S EQUITIES 2008 2007 2006 2005 2004

Share Capital and Reserves
Authorized share capital 0.7767287 0.5888537 0.6691262 0.9761459 1.0826873
Issued, Subscribed and Paid-up Shares capital 0.569601 0.5299683 0.6022135 0.8785313 0.8120155
Accumulated Surplus 0.0498225 0.1357426 0.1891861 0.2692035 0.1967947
Net shareholder’s Equity 0.6194235 0.6657109 0.7913996 1.1477348 1.0088101
Balance Of Statutory Fund Including
Policy Holder’s Liabilities 91.891731 92.295342 92.312492 93.668058 93.339659
Deferred Liabilities
Staff retirement benefits 0.5787499 0.605921 0.6923957 5.5597484 0.0826924
Creditors and accruals
Outstanding claims 4.0105122 3.8140526 3.7516071 0.1325313 3.5220889
Premium received in advance 1.2831159 1.2639309 1.1930399 0.0181905 0.3770729
Amount due to others insurer 0.0373503 0.0306634 0.037004 0.0030182 0.0245402
Amount due to agents 0.6048914 0.4860669 0.4886943 0.2823902 0.4080378
Accrued expenses 0.3919466 0.3304523 0.2768904 0.2574126 0.2217755
Income Tax Payable 0 0.0533201 0.0247838 0 0.106767
Inter fund balance 0.1123269 0.1996267 0.1282822 0.0025565 0.0791358
Others 0.4699524 0.254913 0.3034106 0.5123419 0.829214
6.9100958 6.433026 6.2037122 4.9021042 5.5686321
Others liabilities 0 0 0 0.0005769 0.0006399
Total Liabilities 99.380576 99.334289 99.2086 98.852265 98.99119
Total liabilities and Equity 100 100 100 100 100

(ASSETS PORTION)
Cash and bank deposits
Cash and others 0.0576467 0.0458958 0.0613154 0.1923261 0.2537949
Current and others 1.2733001 0.3836205 1.0176552 1.4655474 1.3821521
Deposits maturing within 12 months 7.423312 5.95455 8.0454653 4.4801983 2.9882353
Fixed deposits maturing after 12 months 0.6578799 0.5164771 0.4657774 0.6193333 0.7680995
9.4121387 6.9005435 9.5902133 6.7574052 5.3922818
Loans secured against life insurance policies 6.8704293 6.5446998 6.0033096 5.5597484 5.665931
Loans secured against others assets
To employee 0.1065263 0.1214193 0.1367654 0.1325313 0.1565966
To agent 0.007265 0.0083417 0.0091764 0.0181905 0.0263201
Others 0.0013779 0.0010817 0.0007902 0.0030182 0.0025335
0.1151692 0.1308427 0.146732 0.1537401 0.1854503
Unsecured loans
To employees 0.0458746 0.0516749 0.0571581 0.0356079 0.0448622
To agents 0.0118115 0.0129153 0.0128071 0.0103608 0.0147213
Others
0.0576861 0.0645902 0.0699652 0.0626627 0.0595835
Investments
Government securities 65.342383 68.763824 65.976425 70.431855 70.645345
Others fixed income securities 0.6915319 0.4314284 0.4826019 1.9646772 2.3983072
Listed equities 11.570033 11.617263 12.444614 8.4273654 8.0293291
Unlisted equities 0.8752272 0.1243783 0.1410331 0.2308888 0.2953224
Holding in subsidiary companies 0.0325977 0.0370695 0.0421228 0.0614503 0.0681573
Less: provision for diminution in value -0.1014641 -0.0993926 -0.1132389 -0.1817193 -0.2429312
 78.410309 80.87457 78.973558 80.934517 81.19353
Investment property
Cost 1.9447277 2.1015694 2.341071 3.2160543 3.5404286
Less: provision for impairment in value -0.0003122 -0.0003568 -0.0004068 -0.000614 -0.0006994
Less: accumulated depreciation -0.6823717 -0.7284656 -0.7764239 -0.8448621 -0.8242531
1.2620438 1.372747 1.5642403 2.3705782 2.7154761
Others assets
Premium due but unpaid 2.3768742 2.5450587 2.1625549 1.1118526 1.1109573
Amount due from others insurer 0.0270752 0.0111087 0.0186271 0.0021788 0.0144236
Agent balances 0.0001077 0.0001225 0.0001432 0.0003143 0.000353
Investment income due but outstanding 0.1551433 0.160571 0.1679473 0.2031809 0.2603787
Investment income accrued 0.9109795 0.881073 0.8738179 0.0238033 0.0676723
Taxation 0.0258749 0 0 2.0339767 2.1800309
Prepayments 0.14277 0.1590276 0.185006 0.2537238 0.286596
Inter-fund balance 0.1123269 0.1996267 0.1282822 0.0025565 0.0791347
Sundry receivables 0.0481758 0.1063888 0.0660026 0.2443264 0.5110436
Others 0.0084405 0.0081774 0.0089542 0.1688674 0.2167854
3.8077679 4.0711544 3.6113355 4.0447807 4.7273754
Fixed assets-tangibles
Furniture, fixture, office equipment
Computer and vehicles 0.3380209 0.3567423 0.3859868 0.5218417 0.4809427
Less: accumulated dep. -0.2735649 -0.31589 -0.3453407 -0.4052743 -0.420571
0.0644561 0.0408523 0.0406461 0.1165674 0.0603717
Total Assets 100 100 100 100 100

2) PROFIT AND LOSS ACCOUNT STATEMENT

Investment income not attributable to statutory funds 2008 2007 2006 2005 2004

Return on government securities 18.980406 25.725317 21.882604 16.942672 47.105878

Interest income on loans and
Advances to employees 4.6780052 5.9608711 3.9761474 3.9120225 7.740214
Interest income on bank deposits 8.6740757 5.2949853 2.9617735 2.9772516 0
Gain on sale of investment 0
Net investment income
Expenses not attributable to statutory funds -0.658641 -0.7357279 -0.4831362 -0.4823434 -0.7333645
Surplus appropriated to shareholders fund 118.96488 111.46061 80.875092 52.269719 99.530163
Profit before Tax 150.63872 147.70606 109.21248 159.01228 153.64289
Tax expense
Profit after Tax 100 100 100 100 100

Earnings per share - basic and diluted 0.0090909 20.956364 31.415111 27.113 20.196111
RATIO ANALYSIS

CATAGORIES of Ratio Analysis:

 Liquidity ratios
 Activity ratios
 Debt ratios
 Profitability ratios

LIQUIDITY RATIOS:

LIQUIDITY:

The liquidity of a firm is measured by its ability to satisfy its short-term obligations as they come
due. Liquidity refers to the solvency of the firm’s overall financial position---the ease with which
it pays its bills. Due to low or declining liquidity firm moves toward financial distress and
bankruptcy.
Liquidity Measures----
Current ratio
CURRENT RATIO:
The current ratio, one of the most commonly cited financial ratios, measure the firm’s ability to
meet its short-term obligations. It is expressed as follows:

Current assets
Current ratio =
Current liability

Years 2008 2007 2006 2005 2004

Current ratio 11.68 12.34 12.91 17.24 16.52

Findings:

From the above ratios it is clear that the firm’s investment in current assets has increased In
2004 and 2005 it is in better position to pay its obligations as they come due. In others years
the firm is also having a potential to pay its liability efficiently but in these years it is decreased
It is good liquidity and is most wisely used to make the analysis for short-term financial
positions or liquidity of the firm. The standard for this ratio is 2:1 it is calculated by the current
assets by total of the current liabilities
This ratio is below the standard. The management should take steps to improve the short- term
financial position of the firm.

DEBT RATIOS:

The debt position of a firm indicates the amount of other people’s money being used to
generate profits. In general, the financial analyst is most concerned with long term debts,
because these commit the firm to a stream of payment s over the long run.

DEBT RATIO:

The debt ratio measures the proportion of total assets financed by the firm’s creditors. The
higher this ratio the greater the amount of other people money being used to generate profit.
The ratio is calculated by following formula

Total liabilities
Debt ratio =
Total assets

Years 2008 2007 2006 2005 2004

Debt ratios 99.4 99.33 99.2 98.85 98.99

Findings:

The ratio indicates the more than half of the assets financed by the debt. This ratio is
MAXIMUM in 2008. Debt ratio indicates the greater the risk and more financial leverage it has.
It also shows that firm has paid some portion of the debt during the year 2008.

PROFITABILITY RATIOS:

There are many measures of profitability. As a group, these measures enable the analyst to
evaluate the firm’s profits with respect to a given level of sales, a certain level of assets, or the
owners’ investment.
There are four types of profitabalility ratio:
⇒ Profitability ratio
⇒ Return on total assets (ROA)

NET PROFIT MARGIN:

The net profit margin measures the percentage of each sales dollar remaining after all cost and
expenses, including interest, taxes, and preferred stock dividends, have been deducted. The
higher the firm’s net profit margin the better will be the performance. It can be calculated as
follow

Total revenues
Profitability ratio =
No. of shares holders outstanding

Year 2008 2007 2006 2005 2004

Net Profit 26.92 25.6 31.4 32.53 24.23

Findings:

Net profit margin of the firm is 26.92% that is greater than the previous year. It is satisfactory
but less than 2006 and 2005 The lower the net profit margin the bad will be the company’s
position.

RETURN ON TOTAL ASSETS:

Return on total assets also called return on investment. It measures the overall effectiveness of
management in generating profits with its available assets. The higher the Return on total
assets better will be the performance.
 Total Revenue
Return on total assets =
Total assets

Year 2008 2007 2006 2005 2004

ROA 0.15% 0.14% 0.19% 0.24% 0.19%

Findings:

The return on investment of the firm is 0.15% in 2008. It is greater than the previous year. It
shows that firm generates Rs.15 for each Rs.100 of the investment.

RETURN ON EQUITY

Total Revenue
Return on Equity =
Total Asset

Year 2008 2007 2006 2005 2004

ROE 24.8% 24.4% 23.9% 20.75% 19.5%

CHAPTER 6
SWOT ANALYSIS

SWOT is the abbreviation of strengths, weaknesses, opportunities and threats. Strength of

the organization can be measured from the activities and resources that give it a
competitive edge over competitors. Weaknesses reflect areas where the organization
lacks better performance. Threats are the environmental conditions that can effect the
performance of the organization. Opportunities reflect the areas that can be exploited by
the organization in order to be more competitive.

In light of the SWOT analysis, management also reevaluates its current mission and
objectives. Are they realistic? Do they need modification? As we where we want to be
right now?

STRENGTHS
The following facts reflect the strengths of the State Life Insurance

• INFRASTRUCTURE
State Life Insurance Corporation is one of the oldest institutions of the country with a
huge setup spread all over the country. The Corporation has four regions and twenty-
six zones that provide basic facilities to the Corporation to penetrate deeply in the
insurance market.

• AUTHORISED CAPITAL
State Life Insurance Corporation has got the highest paid up capital in the insurance
sector. This fact makes the Corporation the richest Insurance Corporation of the
country.

• MARKET SHARE
State Life Insurance Corporation has a 60% of the life insurance market share that
enhance the goodwill of the Corporation.

• GOVERNMNET SECURITY
State Life Insurance Corporation main strength is the security provided by the
Government to the policyholders. It makes the Corporation more reliable and self-
efficient for policyholders.

• EXPERIENCE
State Life Insurance Corporation has got an experience of almost 27 years in the life
insurance industry that make it the more experienced Insurer in the country.

• ORGANIZATION CULTURE
 State Life Insurance Corporation’s culture reflects devotion, motivation and
cooperation that acts as an asset for the Corporation.

• SALES FORCE
State Life Insurance Corporation has the biggest sales force in the Life Insurance
industry. It helps the organization to push its policies down to the customers.

• RATE OF RETURN
State Life Insurance Corporation gives highest rate of return. It also provides bonuses
to its policyholder i.e. Golden Jubilee Bonuses.

• GOODWILL
State Life Insurance Corporation is one the oldest Insurance Corporation in the
country with a history to support its corporate image. The goodwill created by the
Corporation acts as a barrier for the other to follow in the Insurance industry.

WEAKNESSES
All the areas that need some improvement are the weaknesses of the Corporations.

• CENTRALIZED DECISION MAKING

Decision-making plays important role to grasp golden opportunities. Whenever
timely decision are to be taken the taken by the Principle Office Karachi. It makes it a
lengthy and time-consuming process.

• INCOMPETENT SALES FORCE

State Life Insurance Corporation has got the biggest sales force but it is not
competent enough to cope with the challenges of the new concepts emerging in
selling. A weak training program for sales representatives and sales officers is not
enough to impart professional selling skills in them.

• SELECTION & RECRUITMENT

 Sales representatives are the building blocks of the organization, involved in
selling activity. State Life Insurance selection and recruitment procedures need to
be scrutinized.

• UNDERWRITING
The under-writing process at initial level is based solely on judgmental methods.
It should be based on practical methods.

• FEEDBACK
The Corporation doesn’t have any effective and efficient feedback channels to
disseminate sales force suggestions to upper management.

PEST ANALYSIS

POLITICAL CONDITIONS:
The political conditions are not very stable in the country, but this does not much effect
n the policies of SLIC. There are no restrictions or barriers on the growth of this
industry. So the political conditions don’t influence the growth of SLIC
ECONOMICAL CONDITIONS:
The economical conditions are not very favorable and the economy is facing problems,
but it is directly influencing buying power of customer. If the country is out of its
current problems, it will further boost up growth of this industry, as people will feel
more secure economically and it will further increase the attractiveness of the market.
When people will have more money they will buy more policies of life insurance
SOCIAL CONDITIONS:
The social patterns are changing in the country, as the world is becoming a global
village, and mutually share and accept patterns. People are becoming more attractive
towards life insurance. There are some religious hurdles in the growth of this sector
they are because of so-called religious leader but with the changing time thinking of
people is changing so they are attracting towards life insurance to have a secure
financial future
TECHNOLOGICAL CONDITIONS
Technology changes have little effect on SLIC.SLIC changes its way of advertising and
other policies with change in technology

APPLICATION OF CLASS ROOM LEARING

Here I have to discuss what I have learnt in 6 semesters in class at what extent that learning is
applicable in practical work. Following are the key points which shows application of the
knowledge in organization which I have learnt in the class:
My teachers guided us how to behave with other persons in a professional way that counts a lot
in my internship.
Moreover presentations taken by my teachers build my communication skills.
Computer skills especially MS EXCEL 2007 was really have a great importance in financial
institutions as well as in my organization. I have full grip on MS office so I made my
assignments given by my organizations very effectively and efficiently.
Then MS Word 2007 helped me very much in drafting and composing business letters sent by
my organization to its clients.
One thing that I noted that more than 70% of class room learning have no concern with
practical work in the organizations.
Reason is that 99% work is done on customized software which is very far from theoretical
point of view.
WHAT I HAVE LEARNT IN SLIC OF PAKISTAN

Following things I have learnt from SLIC where I carried out my internship for eight weeks:
Dealing with people in official way
Be calm and cool while dealing with clients
Outward clearing functions.
Selling policies
How to attend a business meeting
Team working
Beside the above I internally felt that I have groomed my abilities and I am feeling
My soft skills better than as before internship
IF I WERE MANAGER AT SLIC OF PAKISTAN

If I were manage at State Life Insurance Company of Pakistan I shall take following actions:
I shall try my level best to recover the past mistakes such the weaknesses of the organization.
I shall agree to promote the job rotation and other activities which are helpful in making the
employees of the organization the best employees in the organization
Some type of blender did by the employees of the organization that is not good for the image of
the organization I shall save such employees from the deterioration the image of organization.
I shall arrange a system to understand and share the problems of my employees because a
happy and tension free employee is the asset of an organization.
I shall expand the number of branches to all the major cities of Pakistan.
I shall raise voice to make decisions at local level by keeping in view the local traditions and
credentials.
I shall maintain such a system that will help employees and customers to maintain self respect
of each other.
There is no proper feed back from employees of the organization to their customer I shall
improve this feed back immediate.
CHAPTER NO 7

SUGGESTIONS & RECOMMENDATIONS

SUGGESTIONS & RECOMMENDATIONS

Suggestions are the keys to success, proper working and

prosperity of the corporation. During our internship-training
period we conducted some interviews from the policyholders
and has taken their suggestions.

RECOMMENDATION RESULTED FROM THE

INTERVIEWS OF POLICYHOLDERS

• In PHS department different section should be properly

separated, so that it will be easy for customer to reach
their concerned section.

• There should be proper sitting arrangement. Particularly

in PHS department no of chairs should be increased.

• There should be a “General Information Cell” on the

ground floor, because when most of the policyholder are
illiterate and can’t understand the map given at ground
floor.

• The “State life Insurance corporation” should hire the

services of a Doctor, which will daily come in state life
and deals with the medicals of the new customers.

• Sales Rap should properly guide to the policyholder the

best policy for him.
 • In some departments policyholders are not kindly being
served. So this thing should be removed, because if they
don’t behave well with the policyholders then they may
lose their existing and potential customers.

Some Other Recommendations

 There should be a complaint cell in the building of state life

insurance corporation. This will enhance the credibility of the
company. This will lead them towards customer satisfaction.

 There should be “Job Rotation” for the employees working in

the state life either in the same department or in some other
departments.

 All the working of SLIC should be fully computerized. All the

zonal Offices should be interconnected.

 State life should change it’s TV commercial “Aey Khuda

Meray Abu Salamat Rehenh”. Because I have interviewed the
people and found that this sound releases a negative effect on
listeners about the concept of life insurance.

 State Life Insurance Corporation should arrange some

documentary program on TV order to create awareness in the
potential customers.

 There should be an educational program for field members as

they promote from SR TO SO, SO TO SM and so on. Because
the people on the higher post should be at least graduate.

 Behavioral training should be given to field force and they

should be motivated not to deceive the innocent policyholder.
 There is a need of more and extensive training of office
workers.

 The culture of the SLIC should be developed and steps should

be taken to make it strong after critically analyzing the culture
of private institution. To some extent decision-making should
be decentralized for the development of insurance plans and
training courses.

 Flexible pay system should be introduced in the corporation to

motivate the workers to do more work.

 Quick service should be provided to policyholders in case of

underwriting.

 Loan processing against policy, surrender and Survival benefits

of policy.

 Two-way feedback is compulsory between corporation and

employees (office & field).

 Proper concentration should be given to the inputs of the field

force. All the requirements and rules & regulations should be
critically met before selection and recruitment of field force.

 Field force and office workers should be strictly asked to wear

the proper uniform developed by SLIC while they are on the
job.

 The employees should be rotated from one job setting to

anther. So that in case of emergency there should not be a
working problem.

 Suggestion from bottom of the organization should be given

appropriate response.
Suggestion for Internship Program

 As the FMD department is dealing and guiding the internees therefore

it is the prime responsibility of FMD to provide “ORIENTATION” to the
new internees, about the “Introduction and History of SLIC”. The
orientation was not delivered to us by FMD and caused problems for
us. So I suggest that the first day of internship should about
“Introduction and History” SLIC.

 The schedule of tenure in different department should be revised,

because I experienced that some departments require more time to
understand their work and some require less. Actually in some
departments there is more work for internees to do and in some
department is less. I suggest that the tenure should be increased in,

 PHS
 Audit
 New Business
And the tenure should be decreased in,
 P&GS.
 Computer Department.

 When an internee completes the internship, the FMD department

should give him a questionnaire to fill. This questionnaire may include
their opinions about staff behavior, setup of zonal office, areas where
improvements are required, and some new ideas in order to increase
the learning during internship.

 The timing for internees was from 8.00 AM TO 4.30 PM. This timing
should be decreased from 9.00 AM TO 1.30 PM.
There are three reasons behind this,
 1) I was coming in the concerned department at 8.00 AM, at that time
the whole staff of that department was yet reached on their. The
work in all departments’ starts at 9.00.

2) The “tool for the measurement the level of learning” should be

“quality” not “quantity”

3) As SLIC uses centralized approach and the PO Karachi has settled

a standard time from 8.00 AM to 1.30 PM for internees, therefore
same criteria should be there for internees doing there internship in
zonal office.
 There should be a suitable stipend for the internees.
There are three reasons for this,

1) As SLIC uses centralized approach and PO Karachi awarded

Rs. 4000 for each internee, there for zonal office should follow the
same practice.
2) This provides appreciation to an internee against his hardworking.
3) As Govt. of Pakistan has announced Rs. 3000 for each internee as
stipend, now from the next year it will be the responsibility of the
organization to offer some stipend
ABBREVIATIONS USED IN THE REPORT

ABR. USED FOR ABR. USED FOR

Board Of Directors AGM Asstt. General Manager
BOD
ADP Agent Development ADB Accidental Death
Program Benefit.
DA Daily Allowance AM Area Manager/Asstt. Manager.
DCS Daily Collection Sheet ANF Auto Non-Forfeiture
Option.
DM Deputy Manager. B&A Budget & Accounts
FYP First year Premium DGM Deputy General Manager
GB Gaga Byte FIB Family Income Benefit.
GM General Manager FMD Field Manpower Development

JV Journal Voucher LIMRA Life Insurance Marketing

and Research association
MOP Management Orientation NDFC National Development
Program Finance Corporation
NB New Business P&GS Personnel and General Services.

NOC No Objection Certificate PHS Policy Holder Services

OR Original Receipts/Ordinary Revival PTD Partial Total Disability
PICIC Pakistan Industrial Credit and RO Regional Office
investment corporation
PO Principal Office SB Survival Benefits
PO Provisional Office SCAM Study Course in Agency
Management
SA Sum Assured SM Sales Manager
SLIC State Life Insurance Corporation SR Sales Representatives
SO Sales Officers SR Special Revival
SV Surrender Value TIR Tern Insurance Rider
SWP Special Waiver of UPS Uninterrupted Power
 Premium Supply
TA Traveling Allowance WP Waiver of premium
NIC National Identity Card EFU
Eastern Federal Union
CU Commercial Union ALICO American Life Insurance Company.
BTC Basic Training Course G&P Group and Pension

Bibliography