New Jubilee Internship Report

NEW JUBILEE INSURANCE CO. LTD.

DEDICATIONS: THIS REPORT, A RESULT OF MY DAY AND NIGHT EFFORTS, IS DEDICATED WHOLLY TO MY PARENTS AND TEACHERS.

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NEW JUBILEE INSURANCE CO. LTD.

PEFACE A student’s life is nothing but a continuous struggle to gain depth and expertise in his field of study. It is a plunge into the vast ocean of hidden treasures, which are revealed by turning the pages of books. This process is further supported by practical exposure in the concerned field in the form of an internship program. An internship program aims at grooming the best executives of the future and exposes them to the real processes in the field. Therefore the department has organized a comprehensive training program to carve a gem out of their potential. I opted to select “New Jubilee Insurance Company” for gaining the experience of internship and my experience during the period of two months was extremely beneficial. I gained an insight into first hand knowledge and got awareness of their management and working. This internship report depicts the acquired knowledge in accordance with the procedure learnt and observed. In this report is discussed the vision and mission of the insurance company as a service provider together with a very comprehensive history of the emergence and its management. A brief description of the products and services offered by the company for the customers is followed.

The main focus throughout however has

remained on the functioning. The later section discusses the experience gained by me and finally the report contains the ratio analysis and the SWOT analysis of the organization together with the recommendations and suggestions for further improvement followed by the concluding remarks. In short, this report has been an endeavor to acquaint the readers with procedures in a descriptive manner.

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NEW JUBILEE INSURANCE CO. LTD.

ACKNOWLEDGEMENT The following report could never have been materialized without the Blessing of Allah Almighty, without the kind patronage of my Loving Parents who always pray for me, the help of my teachers and key persons at NJI who never hesitated to provide important information to me. I take the pleasure of expressing my deep gratitude and whole hearted thanks to all my respected teachers who have given me the opportunity to explore and gain a deep understanding of wide field of insurance and risk management. I was able to gain deep intellectual depth and was exposed to the fine technicalities and the various dimensions that the field has. All this was possible due to the extended and valuable support of my respected teachers who had been very cooperative and supportive throughout the life the session.

Their techniques, instructions and committed guidance

always served as a torched light of me and helped me overcome the academic problems I had. I especially thank for his great concern and cooperation for his students.

His

farsighted policies and decisions have always aimed at upraising the quality of his students in the practical field with the objective of providing awareness of practical expertise and to acquaint them with the real management process. Thus acknowledging his efforts and tremendous contributions towards the excellence of my academic career I find it my bounded duty to express my regards to him. Finally I express my high indebtedness to the zonal head Mr. Muhammad Ikram and the staff for granting me permission to gain practical experience in this prestigious organization. The staff had been extremely cooperative and supportive and it was only due to their valuable suggestions and directions that I was able to successfully complete this practical course of action.

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NEW JUBILEE INSURANCE CO. LTD.

ABOUT NJI

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NEW JUBILEE INSURANCE CO. LTD.

COMPANY PROFILE Established in 1953, NJI is one of the most reputable and brightest name in the insurance sector. Sustained growth over half a century has secured NJI a place among the “Big Three” Pakistani insurance in terms of gross direct premium and financial base. NJI is listed on the Karachi & Lahore Stock Exchanges. Major shareholders include Aga Khan Fund for Economics Development and Hashoo Group. NJI, with its Head Office in Karachi, has an extensive and dynamic branch network in all major cities and towns of Pakistan that guarantees prompt services at the customer’s doorstep. The company prides itself in its longstanding reinsurance arrangements and relationship with international renowned reinsurers such as Swiss Re, Munich Re, Lloyds, Hannover Re and Mitsui Smitomo Re. The company is also supported by internationally acclaimed reinsurance brokers including AON Group, Willis, Marsh and UIB. In 2003, NJI became the first Pakistani insurance company to acquire a foreign company when it took over the Pakistan operations of Commercial General Union. Together with AKFED, NJI also acquired majority control of CU Life Assurance Company of Pakistan Ltd. A NJI, diversity is maintained through underwriting all classes of general insurance including fire, marine, motor, engineering, health and general accidents. NJI not only offers wide risk coverage, but also provides related risk management services delivered by highly qualified and experienced risk managers.

NJI has developed unique and innovative

insurance solutions to meet the growing consumer financing trends of economy. From auto financing to personal loans, mortgage to plastic carts and trade finance to capital investment finance, NJI has the customized solutions to secure entire operations. Product range and transactions of all financial. As pioneers in Group Health Insurance, NJI continues to develop new, flexible and customized plans to suit the diverse need of our many blue chip Pakistani companies and multinational clients. With a broad spectrum of services available, NJI’s client-base comprises prominent national and multinational corporations operating in Pharmaceutical, Chemical, Textile,

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NEW JUBILEE INSURANCE CO. LTD. Cement, Services (Hospital & Hotels), Oil & Energy, Manufacturing, FMCG, Engineering, Banking and Financial sectors. NJI’s business philosophy can be summed up as Customer Protection, Customer Satisfaction and Customer Trust. effectively.

This is acquired largely be ability to handle claims

The customer focus and pro-active management approach in all areas of

business, allow NJI to underwrite and handle claims in an expeditious and efficient manner. The true test of soundness of insurance converge is the duration of client relationships. This is proven by the fact that many clients have been with us for over 40 years. Clients are satisfied knowing that NJI is their best security. “NJI is the only company among the top insurers to secure and sustain as Insurer Financial Strength Rating of “AA” both by PACRA and JCR-VIS.”

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NEW JUBILEE INSURANCE CO. LTD.

MISSION To provide our policyholders the highest degree of financial security, prompt and fair settlement of their insured losses, professional and friendly services of all times. To provide our employees a fair reward for their services, good working conditions, stable employment’ and the opportunity for training, self development, long term professional growth and prosperity with the company. To earn a steady and satisfactory return for the shareholders on the company’s capital and to strive for the growth and prosperity of the company. To be a good corporate citizen and contribute to the uplift and welfare of the community we live in.

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VISSION To be acknowledged as the strongest and best insurance company of Pakistan and to enjoy the highest level of trust and confidence.

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NEW JUBILEE INSURANCE CO. LTD.

BOARD COMMITTEES AUDIT COMMITTEE Akbar Ali Pesnani – Chairman Akbar Ali Hashwani Mahmood Faruque John Joseph Metcalf Masood Hussain – Secretay

HUMAN RESOURCES AND REMENURATION COMMITTEE Towfiq H. Chinory – Chairman Masson Noorani Sadruddin Hashwani John Joseph Metcalf Tahir Ahmad – Member and Secretary

FINANCE AND PLANNING COMMITTEE Masood Norani – Chairman Towfiq H. Chinory Tahir Ahmad John Joseph Metacalf Atiq A. Mahmudi – Secretary

BUSINESS DEVELOPMENT COMMITTEE Akbar Ali Hashwani – Chairman Towfiq H. Chinoy Mahmood Faruque Tahir Ahmad Akbar D. Vazir – Secretary

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NEW JUBILEE INSURANCE CO. LTD. Mirza Ali Mahmood

MANAGEMENT COMMITTEES UNDERWRITING COMMITTEE Tahir Ahmd Chairman Akbar D. Vazir M. Vaqaruddin – Member & Secretary Muhammad Ikram

CLAIMS COMMITTEE Tahir Ahmed – Chairman Akber D. Vazir Muhammad Safdar Brendan D’ Lima – Member & Secretary

RE- INSURANCE / CO-INSURANCE COMMITTEE Tahir Ahmed – Chairman Akber D. Vazir Mirza Ali Mahmood Brendan D’ Lima – Member & Secretary

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NEW JUBILEE INSURANCE CO. LTD.

COMPANY INFORMATION COMPANY SECRETARY Atiq A. Mamudi AUDITORS Taseer Hadi Khalid & Company Chartered Accountants LEGAL ADVISORS Liaquat Merchant Associates MEDICAL ADVISORS Dr. Tajuddin A. Manji BANKERS Standard Chartered Bank Habib Bank Ltd Soneri Bank United Bank Ltd SHARE REGISTRAR THK Associates (Pvt.) Ltd. RATING COMPANY The Pakistan Credit Rating Agency (Private) Limited (PARCRA) JCR – VIS Credit Rating Company Limited. HEAD OFFICE / REGISTERED OFFICE 2nd Foor, Jubilee Insurance House, I.I. Chundrigar Road, Karachi, Pakistan. Tell: 22416022 – 26 Fax: 2416728, 2438738

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NEW JUBILEE INSURANCE CO. LTD. EXECUTIVES President & Managing Director Tahir Ahmed, BE, MBA, ACII, Chartered Insurer Executive Directors Abdul Rahim, ACII Atiq Ahmad Mahmudi, B.Com, LLB, FCA Joint Executive Vice Presidents Mohammad Ikram, BA, LLB Brendan Thomas D’ Lima, B.Com Muhammad Afzal Ud Din , B.Com Azfar Arshad, BE (Mech), MBA M Uzair Mirza, BE (Elec) MBA Syed Sohail Ahmad, MBAD Muhammad Safdar MBA, ACII Syed Ather Abbas, MBA Senior Vice Presidents Mehboob Pervez, BA Zahoor A Shahen, MBA M Nadeem Irshad, B.Sc Syed Noman Kadri, M.Sc Ilyas Muhammad Nawaid Jamal, ACA Karim Merchant, BE (Mech), ACII Syed Abid Waseem, B.Com, Adv PGD Zulfiqar Ali, Abdullah MBA Kamran Arif, B.Com Chaudhary Sardar Ali, B.A. Syed Imran Rabbani, M.A.

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NEW JUBILEE INSURANCE CO. LTD.

CORPORATE BUSINESS AND DEPARTMENTAL STAGES

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NEW JUBILEE INSURANCE CO. LTD.

WHAT IS INSURANCE? A promise of compensation of specific future losses in exchange for a periodic payment. Insurance is designed to protect the financial well-being of an individual, company or other entity in the case of upexpected loss. Some forms of insurance are required by law, while other are optional. Agreeing to the terms of an insurance policy creates contract between the insured and the insurer. In exchange for payments from the insured (called premiums), the insurer agrees to pay the policy holder a sum of money upon the occurrence of a specific event. In most cases, the policy holder pays part of the loss (called the deductible) and the insurer pays the rest.

Insurance is a system by which a risk is transferred by a person, business, or organization to an insurance company, which reimburses the insured for covered losses and provides for sharing the costs of losses among all insured. Risk, transfer, and sharing are vital elements of insurance.

Insurance people are no longer in the business of forming fire bridges to put out fires at members’ homes, as they did centuries ago. But the idea of combining resources to protect against loss is still basic to the insurance business.

Insurance companies are new financial institutions. They sell insurance policies to protect people against financial hardship caused by accidental losses.

The insurance

company is an insurer. A person, business, or organization that is covered, or ‘insured’ by a an insurance policy is referred to as an insured. The purchase an insurance policy and become an insured, an insurance buyer pays a fee, call an insurance premium, to the insurance company. To keep the insurance policy in effect, the insured pays more premiums at periodic intervals.

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NEW JUBILEE INSURANCE CO. LTD.

The insurance company pools these premiums to form a fund from which those insured who suffer lossess – unfortunate victims of fire, vehicle accidents, earthquakes, and so on can be reimbursed. Each insured pays a relatively small amount (the premium) into the pool. These relatively small premiums, added together, develop a sizeable fund from which payments are made to compensate the insured who have losses. In this way, for responsible cost, each insured can be sure that a loss will not cause undue financial hardship.

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NEW JUBILEE INSURANCE CO. LTD.

FUNCTIONS OF INSURANCE  Risk Transfer Mechanism  Creation of Common Pool  Collection of Equitable Premiums  Financial compensation for losses

BENEFITS OF INSURANCE  Peace of Mind  Loss Control  Social Benefits  Investments of Funds  Invisible Earnings  Assist Business  Assist Credit  Assist Families

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NEW JUBILEE INSURANCE CO. LTD.

TYPES OF INSURANCE Different Insurance Companies offer many types of insurance policies according to the market demand and according to the compay’s financial situation as well. So here some of the most known insurance policies are discussed as follows: Non – Life or General Insurance  Life Insurance

GENERAL INSURANCE Non-Life insurance is also called property and casualty insurance, property and liability insurance or general insurance. In purchasing non life insurance, the customer is buying financial protection against a specific insurable event, such as industrial injury. Policies are typically short term (one year) indemnity (i.e. the customer will be compensated in an agreed manner) contracts. Normally, there is no investment element or expectation of financial return. Non life insurance is further classified along personal and commercial lines. •

Fire insurance

•

Marine insurance

•

Automobile insurance

•

Miscellaneous insurance

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NEW JUBILEE INSURANCE CO. LTD.

PRINCIPALS OF INSURANCE Insurance based on the following principles:

UTMOST GOOD FAITH •

“A positive duty voluntarily to disclose, accurately and fully, all facts material to the risk being proposed, whether requested or not.”

•

Ordinary contracts are subject to the doctrine of ‘Caveat emptor’ (let the buyer beware) but insurance policies are subject to ‘Uberrima fields’ (Utmost good faith), which requires both the parties, insured and insurers to exercise utmost good faith and make full and complete disclosure of all material facts.

•

Important feature of insurance contact in that all material facts concerning subject matter of insurance are known by only one of the parties that is proper. The duty of full disclosure mainly rests on the proposer. They may be a few instances of breach of duty of full disclosure by insurers, such as: o Accepting an insurance which they know is not enforceable at law or which they are not registered to underwrite. o Making untrue statements during the negotiation with the prosposer

MATERIAL FACT: Every circumstances is material which would influence the judgement of a prudant insurer in fixing the premium or determining whether, he will take the risk. FACT, WHICH MUST BE DISCLOSED: •

Full facts relating to the description of the subject matter of insurance.

•

Facts which show that the particular risk represent a greater exposure than would be expected from its nature or class.

•

External facts which make the risk greater than normally expected.

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NEW JUBILEE INSURANCE CO. LTD. •

Declinature or special imposed on previous proposals by other insurers.

•

Existence of other insurance policies.

FACT WHICH NEED NOT BE DISCLOSED:  Facts of law  Facts of common knowledge  Facts which lessen the risk  Facts which could reasonable be discovered  Facts which a survey should have revealed  Fact covered by policy condition

INSURABLE INTEREST “The legal right to insure arising out of a financial relationship recongnized at law between the insured and the subject matter of insurance.

ESSENTIALS OF INSURABLE INTEREST: 

There must be some property, life, interest and potential liability;



Which must be the subject matter of insurance



Relationship between the insured and subject matter of insurance must be recognized at law.



The insured must stand in are pationship with the subject matter of insurance whereby he benefits from its safety, well being or freedom liability and prejudiced by its damage or existence of liability.

WHEN INSURABLE INTEREST MUST EXIST: 

For life insurance at the time of inspection



For marine Cargo at the time of loss



For other insurances at the time of inception and at the time of loss

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NEW JUBILEE INSURANCE CO. LTD.

PROXIMATE CAUSE “Proximate cause means the active, efficient cause that sets in motion a chain of events which bring a result, without intervention of any force started and working actively from a new source.”  If the insured seeks to claim from his insurer for a loss, he must show that the loss was caused as a result of a peril covered by the policy. There must be a direct relationship of cause and effect, of which the cause must be proximate in efficiency though not necessary in point of time. This takes into account that a particular effect may be the result of a chain of causes in which each cause is a natural result of the preceding cause, but the chain of causation may be broken by intervention of a new and independent cause.  It is the dominant cause, not necessarily, the first cause not the last cause. In case there are several causes operating, the proximate one will be the dominant, more forceful one operating to bring about the result.  One method of coming to a decision is to begin with the first event in the chain and imagine what is logically likely to happen next. If the answer leads to the second even and so on until final event, then the fist event is the proximate cause of loss.

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NEW JUBILEE INSURANCE CO. LTD.

INDEMNITY “To place the insured in the same financial position after a loss as he enjoyed immediately before the loss.  Doctrine of indemnity is of central importance to the operation of insurance. Insurance policies are contracts of indemnity except life and Personal Accident Insurances where it is not possible to measure loss of life, limb and permanent disablement in terms of money.  There are at least four methods, the insurer may use to provide indemnity, when a valid claim arise. The wording of the policy usually gives the insurer the right to choose which method to adopt.

CASH PAYMENT: This is the method adopted in most of the cases. A cheque for the amount of loss, payable under the policy is issued to the insured.

REPAIRS: Under this method insurer provides all the expenses regarding the repairs of the insured subject or get the subject repaired from his authorized repairer.

REPLACEMENT: Generally speaking replacement method does not appeal to insurers and seldom used to provide indemnity.

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NEW JUBILEE INSURANCE CO. LTD.

REINSTATEMENT: If refers to property insurance, where an insurer undertaking to restore or rebuild a building or a piece of machinery damaged by peril insured. This option is rarely exercised because of potential problem. Firstly, the insurer must restore the property substantially to the same condition, failing which he will be liable in damages. Secondly, unless there is express condition in the policy, the insurer cannot limit his expenditure to the sum insured. He is bound once he has elected to reinstate, to do so irrespective of the cost.

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NEW JUBILEE INSURANCE CO. LTD.

SUBROGATION “It is the right of the insurer who has granted an indemnity to receive, after payment of a loss, the advantage of every right of the insured, arising previously or in the future, including rights in contract or in tort, which may diminish the insured’s loss.”  The doctrine of Subrogation has been adopted solely for the purpose of preventing the insured from recovering more than a true indemnity, and it does not arise from any of the terms of a policy of insurance.  Subrogation rights apply only where there is legal liability and do not apply in respect of a gift of a charitable nature which is clearly expressed to benefit the insured exclusively.

Thus, if the insurers make an ex gratia payments they

are thereby deprived of any subrogation rights to which they would otherwise have been entitled.  Rights to subrogation may accrue to the insurers as a result of tort or of contract or of the provisions of a stature. o Tort: In the case of a fidelity guarantee, the insurers are entitled to claim against the defaulter re-imbursement of the amount which they have paid. o Contract: If goods are lost or destroyed in the hands of a bailee, such s a carrier, the insurers may sue the bailee upon the contract of bailment. o Statue: Where property is damaged in a riot, the property owner, by virtue of the Riot (Damages) Act 1886 is entitled to compensation out of the police rate for the district.

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NEW JUBILEE INSURANCE CO. LTD.

CONTRIBUTION “Where the insured has more than one policy under which claim for a particular loss, there is, in the absence of a specific condition, nothing to prevent him the sum insured under the policy he chooses is adequate to cover his loss.”  An insured may effect more than one policy to cover the same property or interest, he can not recover in total more than a full indemnity.  The right contribution arises only when all the policies concerned: o Cover the same peril, o Cover the same subject matter and o Are effected by or on behalf of the same insured.  Property and pecuniary insurances generally, but not invariably, contain an express contribution condition. 

If at the time of any destruction of or damage to any property hereby insured there be any other insurance defected by or on behalf of the insured covering any of the property destroyed or damaged, the liability of the company hereunder shall be limited to its rate able proportion of such loss or damage.

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NEW JUBILEE INSURANCE CO. LTD.

INSURANCE SECTOR IN PAKISTAN At the time of independence, the country had 5 domestic and 77 foreign insurance companies.

There companies were regulated under the insurance Act of 1938.

The

government in 1948 established the Department of Insurance within the domain of Ministry of Commerce to supervise the affairs of insurance industry and to safeguard the interests of the insured. The Act was amended in 1958 for the fist time keeping in view the requirements of domestic market and to have effective control over the insurance premium rates. Since then, various amendments have been made in the Act. The Department of Insurance further created the Controller of Insurance for the supervising insurance business in the country.

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NEW JUBILEE INSURANCE CO. LTD.

LISTED INSURANCE SECTER IN PAKISTAN Local non life insurance companies

44

Foreign Non life insurance companies

02

State owned non life insurance companies

01

Takaful non life companies

03

Takaful family companies

01

State owned Reinsurance companies

01

Local life insurance companies

02

State owned life insurance companies

01

Foreign life insurance companies

02

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NEW JUBILEE INSURANCE CO. LTD.

ORGANIZATION STRUCTURE

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NEW JUBILEE INSURANCE CO. LTD.

ORGANOGRAM

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NEW JUBILEE INSURANCE CO. LTD.

COMPANY AWARDS

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NEW JUBILEE INSURANCE CO. LTD.

Al Hamdo Lillah NJI is the only top Pakistani insurer with the distinction of being assigned an “AA” insurer financial strength rating by both PACRA and JCR – VIS

The fact that two independent rating companies have once again rated us as as “AA” reaffirms NJI’s Financial strength which has been steadily built over half a country.

We thank our clients for the confidence they have placed in us and shall endeavor to always provide them the highest level of security and service.

(A message from NJI)

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NEW JUBILEE INSURANCE CO. LTD.

PROPERTY INSURANCE

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NEW JUBILEE INSURANCE CO. LTD. Who can Insurer? All large industrial groups like Cement plants, Polyester Plants, Refinery, Sugar, Textile, Pharmaceutical, Biscuit manufacturers, Paint factories, Automobile assembly plants, Chemicals manufactories, Cigarettes manufacturer, Diary products, Engineering based Glass factories, plastic goods manufacturers, poultry farms and others. Also emerging S.M. Es, Shops, Warehouses, Schools, Hospitals, Residential houses, distributors etc.

OVER AVAILABLE AGAINST:  Fire & Allied Perils  Burglary  Explosion  Riot & Strike Damage  Malicious Damage  Storm & Flood  Earthquake  Impact Damage  Aircraft Damage  Spontaneous combustion  Business Interruption following fire & allied perils  Terrorism

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NEW JUBILEE INSURANCE CO. LTD.

OTHER INSURANCES In addition to the above, company offers Business Interruption insurance following any damage due to perils stated above. Our team will also be happy to design covers according to the need of clients. DISCOUNT Discounted rates in industrial risk protected by sprinklers, fire hydrants & buckets, we offer special discounts.

MARINE INSURANCE WHO CAN INSURE: Importers & Exporters also industrials units importing raw material /or packaging material, plant machinery and equipment for modernization and expension. COVER AVAILABLE AGAINST: Loss or damage to the cargo during transit, from the place of origin till final destination. Also cover dispatch of finished goods from the insured factory to any where in Pakistan and vise-versa. •

Marine Cargo Import

•

Marine Cargo Export

•

Marine Cargo inland transit

•

Marine Umbrella liability

•

Marine Advance loss of profit

•

Seller’s contingency policy

•

Marine Hull

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NEW JUBILEE INSURANCE CO. LTD. OTHER INSURANCES? We will be pleased to answer your queries regarding Marine Hull (Ocean Vessels or vessels for break up), Barges, Travelers, Tugs, Pleasure Boats etc. •

Pleasure Craft Policy

•

Sports Craft policy

SPECILA DISCOUNTED RATES AVAILABLE: For cargoes dispatches in countries from destination, company offer special discounted rates. SPECIFIED COVER: Company also design tailor made insurance covers for import of plant and machinery by offering Marine – cum Erection which not only cover the machinery being imported but also cover the plant and its machinery during erection.

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NEW JUBILEE INSURANCE CO. LTD.

MOTOR INSURANCE Who can insure: Large corporate groups having fleet of vehicles, leasing companies, banks offering auto loan schemes as well as individuals.

COVER AVAILABLE AGAINST: •

Private Car Comprehensive

•

Commercial Vehicle Comprehensive

•

Motorcycle Comprehensive

•

Motor Third Party Liability

•

Trade Plate Policy In addition, for those wishing to have only restricted cover company also offer insurance covering 3rd party liability cover only.

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NEW JUBILEE INSURANCE CO. LTD.

BOND COVER AVAILABLE AGAINST: •

Bid Bond

•

Mobilization Advance Bond

•

Performance Bond

•

Maintenance Bond

•

Customs Bond

•

Excise Bond

•

Supply Bond

•

Retention Money Bond

•

Utility Bond

ENGINEERING INSURANCE Who can insure: All industrial risk having plant, machinery and specialized equipment, contractors and sub-contractors. COVER AVAILABLE AGAINST: •

Contractor’s All Risk

•

Erection all risk

•

Comprehensive project insurance

•

Advance loss of profit following CAR/EAR

•

Comprehensive machinery insurance

•

Machinery breakdown (MBD)

•

Boiler & Pressure Vessel

•

Business interruption following MBD

•

Contractor’s Plant & Equipment

•

Computer & Electronic Equipment

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NEW JUBILEE INSURANCE CO. LTD. •

Deterioration of Stock following MBD

To cover civil works. The policy offers wide coverage to property whilst under construction. The policy is issued either in favour of principal or contractor and it can also be jointly in favour of both parties. The policy is also extended to cover liability to third parties.

ERECTION ALL RISKS: The costly plant and machinery are insured on wider terms, they are being erected at site. The policy is also extended to cover testing and maintenance period. Here again, the policy can be issued jointly in favour of principal and contractor. The policy is also extended to cover liability to third parties.

CONTRACTORS PLANT & EQUIPMENTS: The contractors while working on project normally takes with them on site heavy plant & equipment. We offer wide comprehensive cover to issue the same. MACHINERY BREAKDOWN: Plant & Machinery installed in industrial units are susceptible to damage. Company provide wider coverage. GROUP HAELTH INSURANCE NJI is the pioneer and market leader in health insurance in Pakistan, which provides flexible plans designed to meet the vital, but often underestimated, health needs of corporate client. We provide high levels of protection against the financial consequences of basic

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NEW JUBILEE INSURANCE CO. LTD. hospitalization needs through our Hospitalization Benefits, which is our cover. In addition, we specialize in customizing additional optional benefits such as: COMPREHENSIVE DREAD DISEASE EXPENSES BENEFITS: To benefit offers additional coverage against the expenses of certain dread disease which cause heavy in-patient expenses. Such diseases may include heart attack, stroke, kidney failure, cancer, AIDS, major organ transplant, etc. COMPREHENSIVE HOSPITALIZATION EXPENSES BENEFITS: This benefit also offers additional coverage for hospitalization expenses for all eligible conditions under the policy. This benefit is very useful for expensive medical treatment for the conditions covered under Comprehensive Dread Disease as well as knee or hip replacement surgery. MATERNITY EXPENSE BENEFIT: Maternity expense benefits pays for medical expenses related to pregnancy and child birth. All expenses directly or indirectly related to pregnancy, i.e. parental and postnatal complications, cesarean sections etc. are paid as per entitlement of limit. Circumcision of baby boys is also included in the annual maternity limit. OUT PATIENT EXPENSE BENEFIT: This section of the policy covers expense arising from sickness and injuries which do not require hospitalization. Doctor’s fees, laboratory tests, costs of medicines and incidental supplies, X-rays and examinations i.e. ECGs, ETTs, EEGs, etc are covered.

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NEW JUBILEE INSURANCE CO. LTD. Company have a network of panel hospitals countrywide, with credit facilities for our clients. The benefits of such an arrangements are: •

No prior approval that provides out clients with the peace of mind, when carrying our health cards / letters.

•

No claims to be filled

•

No administrative issues such as claim correspondence and documentation, etc.

•

No cash flow problems.

In addition company have full time and knowledge medical doctors available round the clock to provide guidance for the best possible medical care.

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NEW JUBILEE INSURANCE CO. LTD.

MISCELLANEOUS INSURANCE CASH INSURANCE: The cash policy is designed to covers •

Cash in Safe

•

Cash in Transit

•

Cash in Counter

FIDELITY GUARANTEE INSURANCE This policy covers misappropriation or embezzlement committed by a permanent employee of the organization during the course o his employment. HOUSEHOLDER’S COMPREHENSIVE: This policy is designed to provide cover to building of a bungalow or an apartment. It covers the entire furniture, fixture, electronic items, carpets, etc. NEON SIGN: The advertisement neon sign are comprehensively covered against fire, damage and other perils.

PLATE GLASS” The expensive plate glass is covered on the comprehensive basis against accidental damage and many other perils.

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OTHERS: •

Workman Comprehension

•

General Public Liablity

•

Product Liability

•

Employer’s Residual Liability

•

Golfer’s Policy

•

Aviation Insurance

•

Travel Insurance

•

Baggage Insurance

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NEW JUBILEE INSURANCE CO. LTD.

SPECIALIZED INSURANCE: COVER AVAILABLE AGAINST: •

Banker’s Blanket Bond

•

Computer Crime

•

Plastic Card

•

Safe Deposit Box

•

Foreign Currency Exchange Policy

•

Comprehensive Security Guard Co. Policy

•

Kidnap & Ransom

•

Professional Indemnity Policy

•

Director’s & Officer’s Liability

•

Residential Value Insurance

•

Energy Risk Policy

•

Protection & Indemnity Insurance

•

Prize Money Insurance

•

Event Cancellation Insurance

•

Network Operator’s Policy

•

Submarine Cable Policy

•

Off Shore Construction Project Policy

•

Control of Well Policy

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NEW JUBILEE INSURANCE CO. LTD.

BRANCH NETWORK SOUTHERN ZONE CORPORATIVE DIVISION Shahab Khan, Senior Vice President 2nd Floor, Jubilee Insurance House, 1.1 Chundrigar Road, P.O. Box 4795, Karachi – 74000. UAN: 111-654-11 Tel: (9221) 2416022-26 Fax: (9221)2416728, 2438738 COMMERCIAL UNIT – I Mohammad Safdar, Senior Vice President 3rd Floor, Jubilee Insurance House, 1.1 Chundrigar Road, P.O. Box 4795, Karachi – 74000. BUSINESS & FINANCE CENTRE Syed Sohail Ahmed, Senior Vice President Room No. 503, 5th Floor, Business & Finance Centre, 1.1. Chundrigar Road, Karachi - 74000 Tel (9221) 2422215 – 16 Fax: (9221) 2471716 JODIA BAZAR Muhammad Amin Haroon, Assistant Vice President Room Nos. 105 – 107 1st Floor ismail Trade Centre, Rambharti Street, Jodia Bazar Karachi, Tel: (9221) 2422215 – 16 Fax: )9221) 2420451 SHAHRAH – E – FAISAL Shehnaz Qasim, Joint Senior Vice President Room No. 405, 4th Floor, Progressive Square, Block 6, P.E.c. H.S., Shahrah-e-faisal ,

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NEW JUBILEE INSURANCE CO. LTD. Karachi – 7500. Tel: (9221) 4524147, 4391172 Fax: (9221) 2241731

SADDAR Syed Tanzeem-Ul-Hassan, Vice President 1st Floor, POF Complex, 252-A, Sarwar Shaheed Road, Near Press Club, Karachi, Tel: (9221) 2422927, 2416022-24 Fax: (9221) 2423627 NEW UNIT BRANCH Syed Noman Qadri, Senior Vice President Jubilee Insurance House, 1.1 Chandrigar Road, Karachi 74000 Tel: (9221) 2422927, 2416022-24 Fax: (9221) 2423627 HYDERABAD Syed Wiqar Hyder Taqvi, Assistant Vice President Sardar Manzil, Risala Road, Saddar, Hyderabad – 71000 Tel: (92222) 781982 Fax) (92222) 729624 SUKKAR Syed Jaffer Raza, Regional Manager C-470/A-3, Queens Road, P.O. Box 118, Sukkur – 65200 Tel: (9271) 5623851 Fax: (9271) 729624 MULTAN ZONE MAIN BRANCH Chaudhary Sardar Ali, Joint Senior Vice President 1st Floor, Al-Razzaq Plaza, Abdali Road, P.O. Box 57 Multan – 60000 Tel: (9261) 4549594, 4549874 Fax: (9261) 4588965

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NEW JUBILEE INSURANCE CO. LTD. BAHAWAL PUR Sanaullah Chaudhary, Vice President 1st Floor, Shah Din Plaza P.O. Box 113, Stadium Road, Farid Gate, Bahawalpur Tel: (9262) 2877568 Fax: (9262) 2877868 BAHALW NAGAR Rai Zahoor Ali Khan, Senior Manager Khan Baba Road, Bahawal Nagar RAHIM YAR KHAN Bashir Ahmed Khan, Assistant Vice President Upper Story, First Women Bank Ltd., Shahi Road, P.O. Box 243, Rahim Yar Khan. Tel: (9268) 5874442 Fax: (9268) 5872243 LAHORE ZONE Muhammad Ikram, Joint Executive Vice President Main Branch (Sales UNIT I) 2nd Floor 1 Capt. Anwar Ul Haq Shaheed Road, P.O. Box 68, Lahore – 54000 UAN: 111-654-111 Tel: (9242) 6283661-3 Fax: (9242) 6283660 SALES UNIT III Haji Muhammad Ramzan, Joint Senior Vice President 2nd Floor 1 Capt. Anwar – Ul Haq Shaheed Road, P.O. Box 368, Lahore – 54000 Tel: (9242) 6283664 – 8 Fax: (9242) 6283669 MALL MANSION SALES UNIT IV Zahoor Ahmed Shaheen Senior Vice President 6- Maill Mansion, Shahrah-e-Quaid-e-Azam, Lahore Tel: (9242) 7211300-4 Fax: (9242) 7211305

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NEW JUBILEE INSURANCE CO. LTD. COMMERCIAL UNIT – II Ilyas Mohammad, Joint Senior Vice President Ist Floor, 1 Capt. Anwar Ul Haq Shaheed Road P.O. Box 368, Lahore – 54000 Tel: (9242) 6283664 – 8 Fax: (9242) 6365067 BANK SQUARE BRANCH Muhammad Ashraf Tahir, Joint Senior Vice President 3rd Floor, H.M. House Plot No. 7 Bank Square, Lahore Tel: (9242) 7312325 Fax: (9242) 73112389 FAISALABAD Syed Hamid Hussain Zaidi, Vice President P-68, Allama Iqbal Road, Faisalabad. Tel: (9241) 2643020, 2640782 Fax: (9241) 2638780 SIALKOT Rizwan Ul Haq, Branch Manager Office No. 1, 2 8:3, 1st Floor, Kashmir Centre, Court Road, Sialkot Tel: (9252) 4274631-2 Fax: (9252) 4274630 ISLAMABAD ZONE ISLAMABAD Ejaz Mehmood, Assistant Vice President 1st Floor, Kashmir Plaza, Jinnah Avenue, Blue Area, Islamabad UAN: 11-654-111 Tel: (9251) 2270365-7 Fax: (9251) 2275317 REGIONAL OFFICE PESHAWAR Iqbal A Rohilla, Assistant Vice President Office No. 7, 2nd Floor, Block A, Cantt. Plaza Super Market, Fakhar-eAlam Road, Peshawar Cantt. Tel: (9291) 5273459 Fax: (9291) 5274698

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WORKING OF VARIOUS DEPARTMENTS

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RATING & UNDERWRITING DEPARTMENT

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RATING AND UNDERWRITING The accurate rating of risk can make the difference between profit and loss for an insurer. Setting too low a rate for a particular type of motor insurance risk will result in a loss for each policy written and particularly with the advent of computer quotation systems, such ‘bargains’ will be unearthed, thus leading to a flood of similar non-profit-making business. Conversely, a higher rate than is warranted will lead to potentially profitable business going to a cheaper competitor. The process whereby the market place will seed out and exploit weaknesses in rating structures is known as “selection” and can destroy an account. Rating is based upon experience. Firstly, there is the experience of the market as a whole and secondly, and perhaps more importantly, the experience of the particular insurer. In order to maximize the accuracy and therefore, the benefits of the latter it is essential that data is held electronically in a format that will allow sophisticated analysis. This facilitates the use of statistics to the rating of motor insurance risk and as a result, insurer have been more willing to employ actuaries either in the underwriting department or, at the very least, have an actuary who can provide input in the risk assessment process. The underwriting department issues the policies after careful evaluation of associated risks which comes for coverage; it is the duty of the Underwiting Department to examine the risk and take all precautionary steps for evaluation before issuing policies / cover notes which the company’s management has determined. The top level management has established overall underwriting plans and strategies, and the underwriting department is responsible to follow and develop specific guidelines to

52 DEPARTMENT OF MANAGEMENT SCIENCE

NEW JUBILEE INSURANCE CO. LTD. cope with the policy and strategy formed and implemented by the top level management of the company. With board strategy and specific directives aligned, the department executes the risk selection and risk pricing process. The department also keeps in mind all of the underwriting elements before designing and pricing an insurance cover note.

OBJECTIVES OF UNDERWRITING DEPARTMENT 

To evaluate and reduce the risk, specifically in respect of expected claims.



To provide maximum protection and better services to our clients.



To provide complete information and guidelines about the insurance to our clients when ever required.



To ensure optimization of cost.



To develop a sound relationship with all other functioning departments of the company.

MAIN FUNCIONS OF UNDER WRITING DEPARTMENT The responsibility of the Underwriting Department is to examine, accept or reject the business containing on day to day work.



First of all when any client who wants insurance policy to protect his stokes or any property, the staff of the Underwriting Department is involved in this matter to feel the hazards which are associated with the risks come for insured. There are two main hazards physical and moral hazard that the underwriting department keeps in mind when issuing any property. In physical hazards, it is important to remember that the structural condition for the insured property. If a severe moral hazard exist, then no rate is adequate to compensate for such hazards. Decisions of the under writing department are of two types which are as follows: o Decision on applying an insured’s existing policy for a specific request for coverage. o Decision on new risk coverage.

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NEW JUBILEE INSURANCE CO. LTD.



Once the Underwriting Department has decided that a risk is acceptable, it finally undertakes solid steps to evaluate all risks.



Then it examines the authenticity of cover notes issued by marketers. It carefully examines the interest rates written on the cover notes according to the tariff rates provided by the Insurance Association of Pakistan. Then identify risks associated in each cover note and then classify as hazards or non-hazards. It also ensures all warranties and clauses included in the cover note / policy. After this its responsibility is to examine the parties involved in insurance (preferences is given to those cover notes and policies where banks or financial institutions are involved.



Finally after the completion of the assessment of risks, rating procedure and warranties, the authorized insurance policies documents are issued to the particular clients.

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CLAIMS DEPARTMENT

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PRINCIPALES OF CLAIMS HANDLING It is when the policyholder needs to make a claim that he value of the cover and the claims service is put to the test. It is, therefore, no surprise that the claims department has been describing as the shop window of an insurance company. Whilst motor insurance, particularly private motor, is old largely by price, nonetheless and does effect a policyholder’s decision as to whether they renew with their current insurance following submission of a claim. The claims department must balance the necessity to provide a high degree of service with the requirement to be satisfied that the claims presented are valid. Once their validity is proven, then the next stage is to quantify accurately each claim. The role of the claims department is to:



Indemnity the policyholder in accordance with cover purchased.



Ensure that only valid claims are paid.



Provide a fast, fair, and efficient claims service.



Deal with third party claims whilst protecting the policy holder’s interests and



Protect the fund of premiums against overpayments, fraud and expenses incurred due to inefficient claims handling processes.

CLAIM PROCESS Claim process varies according to the: -

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NEW JUBILEE INSURANCE CO. LTD. 

Class of business



The type of cover



The amount of the claim



Whether it is a personal or commercial risk insured

CLAIM REVIEW This involves the analysis of the claim by the insurer in the light of such things as: 

The appropriateness of the amount claimed



The personal form e.g., whether the claim contradicts earlier statements



The exact terms of the policy, which are often, open the interpretation.



Legal requirements.



Market practice



Corporate claims philosophy

RESPONSE TO CLAIMANT The initial response from the insurer to the insured may be only an acknowledgment or a request for further information. Depending upon this further information the insurer must then convey their claim decision which can be one of three choices.



Payment: i.e. acceptance of the claim in broad terms.



Negotiation: i.e. The offer of a lower amount than that claimed or an offer to enter into negotiation with the insured with no amount initially named. In this situation liability is accepted by the insurer and the quantum of the claim is the only point in dispute, or



Rejection: i.e. liability is not accepted by the insurer, the full reasons for the decision should be stated.

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NEW JUBILEE INSURANCE CO. LTD.

REINSURANCE DEPARTMENT

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ACCOUNTS DEPARTMENT

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INTRODUCTION The accounts department has significance importance for every type of organization whether that is trading or non-trading, manufacturing or providing services, etc. The management NJI Company Limited has divided its accounts department in two separate sections; each section is interrelated with each other, in order to facilitate day to day functions of the department effectively and efficiently.

OBJECTIONS OF ACCOUNTS DEPARTMENT The objectives are as follows: 

Preparation and keeping record of all financial transactions of the company.



Preparation of financial statements (quarterly, half yearly and annual accounts).



Accomplishment of process of statutory audit.



Compliance with the requirements of the ordinance, 1984.



Compliance with the requirements / directives of Securities and Exchange Commission of Pakistan (or insurance department) applicable to the company.



Compliance with the requirements of taxation law applicable to the company.



Compliance with the requirements of central excise duty law applicable to the company.



Compliance with the requirements of the federal insurance fee laws applicable to the company.



Compliance and adaptation of the requirements of international accounting standards.

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NEW JUBILEE INSURANCE CO. LTD. 

To ensure that prosper system of internal control is carried out.



Provision of information to management for planning and decision masking.



Arrangement of finance for the company whenever required.

DUTIES OF ACCOUNTS DEPARTMENT Some of the important functions of the accounts section are described as follows:PREPARATION OF VOUCHERS In account department under the supervision of concerned officers, I came to know different type of vouchers being prepared and their process of preparation. Vouchers are written evidence of any business transaction. The different type of vouchers being prepared by the accounts department of NJI Company Limited is as under. 

Cash payment vouchers.



Cash receipt vouchers



Bank payment vouchers



Bank receipt vouchers



Journal vouchers or adjustment vouchers



Premium vouchers



Adjustment / journal voucher

LEDGER POSTING Computer operator put log no and make posting in computer. Accounts of NJI Co. Limited are computerized and ledgers are prepared in computer. After the preparation and coding of voucher it is sent to computer operator for posting. A daily print out of all entries

61 DEPARTMENT OF MANAGEMENT SCIENCE

NEW JUBILEE INSURANCE CO. LTD. is checked to prove the accuracy. After checking the accuracy the master file is update and posting is made to respective account ledger by the computer. OTHER FUNCTIONS. Accounts department also handled the payments of the staff salary, traveling allowance and loans to staff, medical allowance, provident fund and other such kind of payments. Bank reconciliation statement is prepared periodically in order to find out reasons for disagreement between the bank passbook and the cashbook. Reasons due to which there occurred discrepancies are as: uncollected or un credited cheques. Un-presented cheques deposits in transit, amount received by bank or company’s behalf, amount paid by bank on company’s behalf, error of transaction of figures, cheque deposited into bank but not entered cashbook.

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INTERNATIONAL AUDIT & EVALUATION DEPARTMENT

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WHAT IS AUDIT? The concept of auditing is closely related with the concept of accountability, it is a practice by which some subject of interest is examined by independent and professionally qualified persons and a report is presented. Auditing is generally considered to be associated with accounting and financial records only but these days the scope of auditing has broadened and it covers nearly all the areas of business activity like financial statements, management efficiency, quality of systems, evaluation of performance and many others. In this book, however, we shall deal only with the audit of financial statements. International Auditing Guidelines used to define Audit as: “An audit is the independent examination of financial statement or related ‘information of an entity, whether profit oriented or not and irrespective of its size, or legal form when such an examination is conducted with a view to express an opinion thereon.”

OBJECTIVES OF AN AUDIT  PRIMARY OBJECTIVES: •

Fairness of Statements: The purpose of auditing is to determine the fairness of statements.

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NEW JUBILEE INSURANCE CO. LTD. •

Prescribed Laws: There are various laws that given the working of many businesses such as companies ordinance 1984 is for the working of companies.

•

Accounting Policies: There is a need to follow the accounting policies for preparing accounting records.

•

Expression of Opinion: An audit enables the auditor to express an independent opinion on the financial statements.

FINANCIAL ANALYSIS

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FOR THE PURPOSE OF ANALYSIS, FOLLOWING FINANCIAL STATEMENTS HAVE BEEN USED: BALANCE SHEET Balance sheet shows the financial position of company on a particular time. We have used the balance sheet of last two years starting from 2005 to 2006.

PROFIT & LOSS ACCOUNT Profit and loss account describes the total income and expenses incurred to obtain that income. We have used profit and loss account of Adamjee Insurance Company Limited of last five years starting from 2005 to 2006. CONSOLIDATED INSURANCE REVENUE ACCOUNT. Consolidated Insurance Revenue account is a account in which all the direct Insurance business of New Jubilee Insurance Company Limited is stated. The final balance of all revenue accounts like fire insurance, marine insurance, motor insurance and miscellaneous insurance accounts are shown.

66 DEPARTMENT OF MANAGEMENT SCIENCE

NEW JUBILEE INSURANCE CO. LTD. Before the Insurance Ordinance 2005, all insurance companies can prepare Consolidated Insurance Revenue Account under the Insurance Act 1938. But in the new ordinance all the related balances of insurance accounts are directly shown in Profit and loss account. The financial statements for the period-analyzed are as follow:

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PROFITABILITY RATIO 1. A sudden high increment in profit as compared to premium accumulation shows the company’s strength. It is because of low expenses ratio while having larger pool of premium than previous years. But in coming two years respective decline indicate low premiums and high taxes. 2. Second profitability ratio is correspondingly shows the same trend. In first proceeding year it jumps to high figure but afterwards declines due to low investment amounts and premium pool while incurring high expenses.

RETURN TO SHARE HOLDERS: 1. Company’s profit after tax is not giving a satisfactory note at the end. It again had come to the same point from were it has started. It all depends on your investment profit folio and opportunities available in market at that time. 2. As usual a tremendous increase is there in first proceeding year but anyhow company is still stable in this regard as compared to other relating factors. 3. In first year price earning ratio has decreased in contrary to other indicators but in following terms it gives a good figure. This thing shows the company’s strategy of investment appraisals and keen view of market strength. 4. In spite of all shortcomings and flaws in different market and business aspects, company has maintained its cash divided to the same extent. It will surely intensify the company’s image about corporate client sovereignty. LIQUDITY RATIOS: 1. Due to low premium pool company still has enough liquid assets to meet the current and future liabilities of its stock holders and other people. 2. Bad figures of profit and loss account are decreasing the opportunities of new paid up capital. So level of paid up capital is decreasing as compared to last years. 3. Decreasing paid up capital is an alarming situation for the company. So it has to increase equity to sustain its presence in the market. 70 DEPARTMENT OF MANAGEMENT SCIENCE

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HORIZONTAL ANALYSIS OF PROFIT & LOSS ACCOUNT Description Increase in net premium revenue Increase in net claims Increase in expenses Increase in commission Increase in investment income Increase in rental income Increase return on bank deposit Increase other income Increase general & Admin expenses Increase share of profit of associate Increase profit before taxation Proposed dividend Revenue for issue of bonus shares Transfer to general revenue

2005-06 62.08 60.13 37.12 222.56 41.65 27.67 266.93 444.74 34.08 54.65 52.47 14.99 53.34 428.57

2004-05 43.34 41.14 17.37 303.45 220.86 5.10 104.04 34.59 2.61 44.52 125.90 14.99 53.34 428.57

INTERPRETATION 

There is a significant increase in the amount of premium in each class

of business which shows the best marketing practice and the good reputation of the business. The increase in the net premium revenue is 62.08% which is a very remarkable sign.



Increase in net claim is 0.60% which shows the best risk management

practices and the better under writing practices adopted by the company. Increase in the percentage of claim is much lower than the premium rate increase which leads to more profits.



Expenses automatically increase with the increase of the business on

this care but good management controls as proportion to the premium amount.



As the business increase the amount of commission will also increase.

The commission rate of the company is relatively high which is offered to the agents.

71 DEPARTMENT OF MANAGEMENT SCIENCE

NEW JUBILEE INSURANCE CO. LTD. With the increase in the amount of the premium, if commission expenses increase it is positive sign.



Increase in the investment income shows the expansion of the

investment portfolio & also the better opportunities availed, as there is increase in the amount of investment the income on the investment wills also income.



The amount of the current and other accounts is less than preceding

year. But current maturing deposits are more and therefore the return on them is significantly high than previous year: which is a source for indirect income.

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EXECUTIVE SUMMARY I have undergone an internship program as a part of my study schedule. It was a six week internship program. It was a great opportunity for me to work with such a prestigious organization which will definitely aid me in developing professional skills and the right attitude towards achieving my goals. I worked for six weeks at New Jubilee Insurance Company Limited zonal office Lahore, as in internee. I was placed in different departments of NJI Co. Ltd. And studied the whole organization, but I got a chance to do some practical work in the Risk Management Department, Underwriting Department, Claim Department and Accounts Department. This helps me a lot in preparing the internship report and the analysis of the Company and remarked about the company on the basis of my studies and analysis of the financial statements and overall review of the company. Even though six weeks training is a very short period to learn about any organization but I gain a lot of knowledge due to cooperative staff. My working hours in New Jubilee Insurance Company Limited were, from 8: 00 am to 5:00 pm with one hour lunch break. When I went to NJI Co. Ltd. at 28, June, 2010, the receptionist sent me to Admin Manager, Mr. Zakir Ahmad who asked me some questions, then took me to Mr. Arif Bashir (JEVP). I presented him the internship letter granted by the college. After asking some questions he appointed Mr. Zakir Ahmad as my supervisor. Mr. Zakir Ahmad gave me introduction about the company’s business and told me its main functions. In the mean while Mr. Zakir Ahmad assigned me a task to visit different departments. I started visiting different departments from the very next day and met with all employees and observed their working. Then I was allocated in the following departments.

77 DEPARTMENT OF MANAGEMENT SCIENCE

NEW JUBILEE INSURANCE CO. LTD. RISK MANAGEMENT DEPARTMENT I spent 4 days in Risk Management Department and there I was assigned by • •

Mr. Imran Mr. Usama

(Asst. Manager) (Asst. Manager)

Both these persons were very cooperative and assisted me all the time willingly. They provide me the preliminary information about the risk and methods to inspect a risk properly and told me how the risk management process is employed. What type of recommendations is made according to the subject matter and type of loss exposure. Personally no any industrial tour for inspection of the risk was made by me because no opportunity was provided to me. I just studied the inspection and risk assessment reports prepared by my trainers. What type of general information is required by the risk manager, the questionnaire is given in the Risk Management chapter show the clear picture the that.

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UNDERWRITING DEPARTMENT This was the second department, which was allocated to me. In this department I spent two weeks and was assisted by • • • •

Mr. Arif Bashir Mr. Ehsan Mr. Muhammad Asim M. Jameel

(VP) (Asst. Marine Section) (Asst. Motor Section) (Asst. Fire Section)

All the persons were very cooperative and polite to me and never hesitated to provide me any type of information inquired by me. They gave me the information about insurance policies that company is offering and how these were prepared. In this department my main duties were as follows: •

Prepared cover notes

•

Prepared the insurance policy schedules

•

Sorting of the cover notes, policy schedules and their file keeping.

•

Premium calculations

•

Respective duties / tax levied

•

Endorsement making

•

Marine certificate generation on open policy

•

Allocation sheet and declaration clause

•

Tariff rates and clauses

•

Client card

I spent two weeks in this department but I felt that this was very short time to lean underwriting as rapid innovations in the products and the changing requirements of the clients. This job was very interesting and I gained variety of work experience and knowledge from my seniors.

79 DEPARTMENT OF MANAGEMENT SCIENCE

NEW JUBILEE INSURANCE CO. LTD. After working in undertaking department I was placed in claim department here I worked under the supervision of •

Mr. Asim Ali Khan

(VP)

They were so kind to me and told me some of the important functions and operations of the department and also told me the procedure of claims of each insurance policy that NJI Co. Ltd. is offering to its clients. My main duties in this department were as follows: •

Typed the official letters

•

Filling of claims documents

•

Rarely, got a chance to go with the internal survey team.

•

Techniques to receive the Claim

•

Inspection of claim form

•

Method of appointed of the loss adjuster and survey

•

Inspection of survey report

•

Enter the data electronically

•

Arranging the document files

•

Read the policy working condition and warranties and clauses

In claim department I worked for one week and got a wonderful practical knowledge & experience.

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ACCOUNTS DEPARTMENT • • •

I spent two weeks in Accounts Department and assigned by Mr. Tariq Mahmood (AVP) Mr. Arif Saleem (Asst. Manager) Mr. Javed Ahmad (Asst. Manager)

During my internship in this department I learned about the major functions of keeping records associated with accounting for services. Mr. Tariq Mahmood (AVP Accouts) was very cooperative person. He told me about annual report, balance sheet, income statement and told me that the accounting department was responsible to collect data and prepare financial statements. With his help I was able to do financial analysis of NJI Co. Ltd. That was important to know the company’s exact financial position. My main job in this department was as follows: •

Prepared vouchers and recorded them in the computer.

•

Sorting of vouchers.

•

Filling of vouchers.

•

Prepared the bank reconciliation statement

•

Typed the official letter

•

Posting in general ledger

•

Fixed assets system o Depreciation calculation

•

Filling the tax returns

•

Calculation of leave encashment

•

Calculation of commission

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Preparation of the bank deposit slips

•

Payroll / Salary Advice

OBSERVATIONS  NJI Co. Ltd. has strong financial standings. It is the honor for NJI Co. Ltd. that PACRA and JCR – VIS the leading rating agencies of Pakistan has given NJI Co. Ltd. a long term rating of “AA” which is the one of the best for any insurance company in Pakistan.  NJI Co. Ltd. has developed strong internship with its customers by understanding their needs and treating them with respects, dignity and importance. The deriving force behind its commitments and services is its focus on customers, incurring that it not only meets, but also exceeds their expectations and this is why that NJI Co. Ltd. is making progress by leaps and bounds.  The profits of NJI Co. Ltd. have grown considerably and also its market price per share during the last few years and this trend is expected to continue in future.  Company’s claim and expense ratios have also dropped significantly during the last years due to better underwriting practices.  Company has developed the good contacts with the foreign reinsurance companies of good rating.  Company has brushier or forms for the clients to understand the different services that company is providing. 82 DEPARTMENT OF MANAGEMENT SCIENCE

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 Company is targeting not only on financial institutions but also individual customers.  Company still not able to become the market leader, since after its establishment in 1953.  The agents of the company are not providing complete information to the customers according to the tariff.  The higher net profitability shows the company’s efficiency in controlling its general and administrative expenses.  The other major reason behind the higher level of net profitability is the large amount of investment income received on the investment that company has made in various organizations including government.  The flaw exists in the asset efficiency of the company. NJI is not efficient is utilizing its asset in proper way to generate sufficient amount of net premiums.  In branch job rotation is uncommon. Normally employees are not rotated through all departments during their job tenure which may cause boredom among employees.  The employees of the branch are not motivated to a great extent. After taking into consideration all above factors how the employees can be motivated?

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SUGGESTIONS AND RECOMMENDATIONS NEW JUBLEE INSURANCE is one of the leading Insurance companies in Pakistan. After spending a 6 week of internship it is true to say that the NEW JUBLEE INSURANCE is well-managed, well organized company. The management has complete control over its working staff. All the departments in the company are well designed. And the Human resource is quite efficient, which is the major cause of success of the company in the market. But in spite of all the factors; there are certain areas on which the company needs to give more concentration. On the basis of their market place, SWOT Analysis the following recommendations are suggested:  Employees are less, should hire more people to lessen the over burden of workload.  Salary should be revised.  Technical training must be conducted periodically.  They should hire more educated sales force to enhance the customer supplier relationship.  The management of New Jubilee Insurance Company should pay concentration to the insurance expenses and commission which are the major causes of low profitability. Although company is efficient in controlling its general expenses but it is very effective.

Because it accounts for a few percentage of premiums volume and

insurance expenses is the major portion of the income statement after net claims.  More and more branches should be opened, particularly in the rural areas.  More and more focus should be given to enhance public image and goodwill through superior customer services and interaction.

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 The management of the company is highly centralized. In order to increase the performance of the employees they should be actively participated in the decisions making of the company.  The prices of the products of the company are so high which are just in the range of the limited Market Niche. So in order to increase the local sales the company must go for the low pricing strategies for its product.  For better productivity, the higher management must conduct proper seminars, workshops for all the employees so that they can have up-to date knowledge and they would be able to increase their skills.  The company should have all sorts of policies in well defined, clear cut written form so as to be more specific and compare the performance with established goals. This is very crucial in the modern competitive insurance scenario so as to remove all deficiencies.  Today is the age of marketing. The more strong will be the marketing of a concern, the more will be the business. So NJI should heavily emphasize on its marketing policies. In this way, bank can also establish its creditability in the eyes of public and can tell them about its offering. Advertisement should run on TV, and in newspapers.  Monetary incentive should be given to employees to enhance their motivation level. Such type of incentive increase their work efficiency which would be beneficial for the bank in future. I hope if all above mentioned areas will be taken care off them it will change things a lot and will open new ways of prosperity and profitability for company.

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LEARNINGS AS AN INTERNEE During the internship at the NEW JUBILEE INSURANCE LIMITED, I had learnt a lot which other wise I would have not been able to experience it. Here at NEW JUBILEE INSURANCE LIMITED, I really understand the sayings like “Seeing is believing (learning wise)” and “The real world working is different from which we study in books.” I had also done other internships at different level of my education and every time I had been able to learn some thing new, so here at NEW JUBILEE INSURANCE LIMITED, I also came face to face with new atmosphere and new working style, from which I learned many things. Some of them are:  How to manage the section and its working  What is the working of the private sector  How to control the employees with both hot and cold temper  How to manage the time  How to get work done from the employees within the prescribed time  How to face the problems and get the solution to it.  How to satisfy or solve the query brought by the employees or the higher officials.

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CONCLUSION At present there is no such organization in the world that is free from problems and challenges. Every concern has to strive and struggle a lot to be more profitable and to get a more competitive edge. Improvement and advancement is crucial with every step and with the every minute passing. Especially insurance sector internationally and in Pakistan is facing huge challenges and simultaneously getting huge opportunities to avail.

The

competition is great in this regard. Only those insurance companies will succeeded which will strive for best. But NJI Limited is making as much struggle and effort to be profitable. Its relative ranking in the world in its country of origin and in Pakistan reveals the facts that where it is standing. It is facing a lot of problems. Some problems are due to changing political and economic structure but many problems are due to negligence and inefficiency of management. Some of these problems are very minor but these are the areas which make a difference in this competitive scenario. All these problems have been pointed out later accompanied by related suggestions. All these matters should be seriously taken care off. It will be so then it can be hoped that in future the relative ranking, its policies, financial position and all other areas of NJI will improve and in future the picture will be quite different. There are some minor problems also these are the things which definitely make a difference. Today, the foreign companies and local companies in Pakistan are introducing new ideas, they providing their employees with extended facilities in order to keep their morale high and to full motivate them. But these are the things which are lacking in NJI Zonal Office. I think that if these problems will be solved, them employees will be more 87 DEPARTMENT OF MANAGEMENT SCIENCE

NEW JUBILEE INSURANCE CO. LTD. motivated, more efficient and more productive. Not only the employees but the general public will also be attracted and profitability will definitely improve.

SWOT ANALYSIS

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STRENGTHS: 

The joining of experienced people, advance management, advance set up and

facilities gave NJI Co.Ltd an edge over its competitors. 

Enjoying economies of scale.



Good will in the market.



Strong financial positon.



Long standing clients.



Experienced owners



Organization gives opportunity to this employees for career path.



Have strong distribution channel in Pakistan.



Variety of Products.

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WEAKNESS  Majority of people are not well aware about NJI Co. Ltd.’s product, so it needs extensive advertisement  Employees discriminate customers on the basis of their status.  Improper human recourse management  Less Incentives to Lower level employees  The furniture available at the branch is not sufficient to occupy a larger number of people at a time in the branch.  Limited area covered (only major cities are insured)  Lack of infrastructure  No segmentation of market.  NJI is slow to adjust the claim  Less advertisement

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OPPORTUNITIES  Used Latest IT Technology  Hire insurance experts from other countries  Explore unidentified market segments  Agriculture and live stock market.

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THREATS  Change in government policies  The competition has become sever by the entrance of new companies.  The decrease in the purchasing power of people in the current economic situation affecting the business activity speed.  Facing tough competition in market.  New business practices rules and regulations by SECP / Government sectors  High risk in insurance business  Many new insurance companies are entering into the market which are backed by strong banks that can create problems for NJI.  Govt. allowed foreign insurance companies to start business in Pakistan that can also affect the whole procedure.

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