The survey is about the public presentation analysis of insurance sector of Pakistan. Financial safety is non stable in todays universe. It does non count how large net incomes we have for a month or how immense nest egg we have there are frequently state of affairss beyond our outlooks or control. We can non do us safe wholly. This is why we need to take all the safety measures to procure our fiscal province and our lives every bit good. And to make this the best manner is to hold insurance. Insurance can be the best safe step for the fiscal losingss and the loss of life. Even if anybody has immense nest eggs secure in a safe topographic point there can ever be some type of calamity that can draw out all of the nest eggs. In such sort of state of affairss insurance can merely be the security step that makes anybody safe and secure. When a contract is made with an insurance company that contract is called insurance policy. Insurance is fundamentally a transportation of hazard for reassigning the hazard on the company in return insurance company must pay some agreed sum called the premium. A company may cover all the loss or some portion of it depending upon the policy.

Insurances policies or contracts purchased when anybody experience that it is non possible to bear the loss wholly. For illustration sudden wellness status like any accident, bosom onslaught, or anything else that may do a serious loss of life or lasting loss or hurt. In the same manner fiscal accident may go on like house burn, larceny, auto accident, or belongings stolen or any concern liability. These things are so expensive that anybody can non pay all these losingss or some of them from ain pocket or nest eggs. In these sorts of state of affairss insurance helps a batch a individual pays a little sum of money for the promise that a loss will retrieve if any accident happens. Insurance is nil but an understanding between an insurance company and a individual to pay an sum for compensation in form of happening a loss of insured belongings or life. The sum can change from a 1000 to 1000000s depending upon the insurance policy and premium agreed.

Importance of Insurance Sector

Insurance sector is really of import sector in any economic system. Because persons and companies keep puting in new thoughts in new concerns and in new ways of making concerns. For making that persons and companies have to take a batch of hazards and to avoid that peril or loss of investing or other of import resources companies and persons go for insurances to protect their investings or transportation of hazards.

In Pakistan insurance industry is 7th largest industry of the whole economic system. Pakistan is a big state holding a population near about 200 million of which bulk are Muslims. As a spiritual belief many people avoid insurance to better their life criterions. About 65 % of the population lives in rural countries and 60 % to 70 % people live below poorness line and their net incomes are less than 2 $ a twenty-four hours as a consequence less income to pass a less educated people as a consequence insurance industry in our state could non turn good as comparison to other states in the universe.

Economic Impact

Insurance industry in Pakistan known as inadequate and in efficient less advanced merchandises of insurance and monopoly of individual province ain insurance company name as province life insurance company of Pakistan. In 2001 province life insurance captured 80 % of the entire insurance market of Pakistan. And in 2005 the portion was 74 % of the entire market. Though the portion of province ain company has go down in last few old ages and the portion of private companies has increase a batch. But still insurance sector in Pakistan could non turn as compared to the international criterions. The major ground of non turning the insurance industry in Pakistan is that the people are more spiritual and avoid insurances and companies do non offer advanced insurance merchandises.

Further insurance is divided in to two parts one is life insurance and the other is general insurance. In general insurance all other insurances include other than life insurance. Now five insurances companies are covering in life insurance concern of which four are private owned companies and one is province owned company. Out of those four private companies two are local life insurance companies and remain two are runing as foreign insurance companies.

Performance and Growth

Till 2005 the entire sum received from policy holders in form of premium 62 % of entire premium is of general insurance and staying is of life insurance. Life insurance requires more capital.

( SECP, 2007 ) .

About life insurance life insurance is divided into two major parts single life insurance and group life insurance. Individual life insurances have large portion in life insurance concern which is 79 % of entire life insurances. And 20 % portion of group life insurances both group and single life insurances have a 99 % portion of entire life insurances. The other reaming 1 % of entire life insurance is of pension programs, wellness insurances, and kids instruction programs etc.

( SBP Report, 2005 )

If we see historically major life insurance concern is owned by province owned company which is province life insurance company. State life insurance corporation or ( SLIC ) of Pakistan is the lone authorities owned corporation that was made by unifying 41 insurance companies in procedure of nationalisation in early 1970 ( SBP, 2005 ) . From that clip province life insurance corporation became the leader insurance company in the state and holding a 76 % portion of life insurance concern.

( SBP Report, 2005 )

Through the portion of province life insurance corporation has decreased as compared with yesteryear but still province life insurance corporation has the major part of the life insurances. But compare to international markets Pakistani market do non turn that much compared with other states. There is pressing demand for authorities to take stairss to aware the people of Pakistan that insurance is good for them so that the market may turn rapidly and more investing semen in Pakistan which is finally good for local economic system and people of Pakistan.

( Annual studies of life insurance companies 2001-2005 )

The above image shows the overall public presentation of the insurance concern in Pakistan done in the old ages of 2001 to 2005. The mean growing in net incomes were about 14 % which a really fine-looking growing in a underdeveloped state. And the mean ROA means return on assets is.4 % which is a good consequence. Return on assets shows one rupee of plus generated the per centum of net income.

Now about general insurances national insurance is the lone province owned company that deals in the general insurance concern in the state. Where as many private companies trades in the concern of general insurance. There are five major classs of general insurance motor insurance, fire insurance, Marine insurance, wellness insurance, and last one called assorted insurance.

Motor insurance holding the largest portion of 48 % of entire general insurance concern. The ground behind this immense portion is increasing figure or autos on the route. Marine insurance holding a portion of 21 % of entire general insurance concern. It is linked with the international exports and imports of services and merchandises. Fire insurance is holding a portion of 18 % of sum of general insurance concern and it is linked with the growing of industrial and building concern. Health insurance is holding a 6 % portion of sum of general insurance concern. And assorted insurance holding a staying portion of 7 % which includes air power insurance, hard currency insurance and travel related insurances.

( Insurance association of Pakistan, 2006 )

General insurances concern is mostly dominant by private companies, Government owned company holding a portion of 14 % of sum of general insurance concern. Whereas a immense portion is owned by the private sector companies which is 82 % of the concern of general insurances. And staying 4 % portion owned by foreign companies.

In the past few old ages Government owned companies have lost their portion in the concern of general insurances.

( Insurance Association of Pakistan, 2006 ) .

The general insurance concern has shown an outstanding public presentation in footings of net incomes. The mean addition in net incomes over the five old ages was 52 % per annum. And if talked about the return on assets it besides showed a great consequence. The overall return on assets for over a five twelvemonth period was 8 % , which is a singular result.

( Annual Reports of General Insurance Companies, 2001-2005 )

Now about the overall public presentation of insurance companies, before this subdivision the single public presentation of life and general insurances concern was shown. In this subdivision comparing of both life and general insurance would be shown which would demo the overall image of insurance industry of Pakistan. The map below shows the growing of premium, net net income growing and assets growing for life and general insurance concern as good.

The map below gives a comparing between general and life insurance premium for the five twelvemonth period. The overall mean growing in life insurance concern has been 28 % per annum. The mean rate of turning of the general insurance concern has been 22 % per annum. Which means life insurance concern is turning greater than general insurance concern.

( Annual Reports of Insurance Companies, 2001-2005 )

The below map will demo the growing in net incomes of life and general insurance concern over five twelvemonth period. The mean turning rate for the life insurance concern has been 14 % every twelvemonth. And the mean turning rate for the general insurance has been 52 % a twelvemonth. It clearly shows that the net incomes of general insurance concern have grown much faster than the life insurance concern.

( Annual Reports of Insurance Companies, 2001-2005 )

History of the Selected Companies

Jubilee Life Insurance

Jubilee life insurance claims to convey planetary accomplishments to Pakistan. For more than 15 old ages Jubilee life insurance making concern in Pakistan and claims to supply a better life, and the life of security and safety. Jubilee life insurance established in Pakistan in June 1995 as a public company, under the company & A ; acirc ; ˆ™s regulation 1984. Jubilee life insurance starts its operations on June 1996. Jubilee life insurance companies portions are listed on stock exchange with paid up capital of 627 million R. Jubilee life insurance proud to be holding taking industries board of managers, and holding the ability and experience to give Jubilee life insurance a better hereafter for the people of Pakistan.

Jubilee life insurance is under the Aga khan fund for economic development Switzerland. It is the pecuniary growing wing of Aga khan development web. It is a group of private bureaus development looking for betterment of life conditions in selected countries of under developed states. The association of Jubilee life insurance with Aga khan development web licenses to pull its worldwide cognition and financess to give our clients in Pakistan with the finest insurance option already at that place in the state. Jubilee life insurance clients can be experiencing safe in information that our procedure are secured by a globally accepted organisation with world-wide surplus. With popular assignments around Africa and Asia, Aga khan fund for economic development is one of the universe taking private turning organisations active in the whole industry.

EFU