farrukh iqbal

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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 SLICENew 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 RATIOHORIZONTAL ANALYSIS

VERTICAL ANALYSIS

6 SWOT & PEST ANALYSIS

7 SUGGESTIONS ND RECCMMENDATIONS

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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.

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PREFACE


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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.

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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DEDICATION


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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

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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

[email protected]

+923454739347

EXECUTIVE SUMMARY

Internship programs are the vital teaching techniques of Bahuddin Zakariya

Universitys 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.

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mailto:[email protected]:[email protected]


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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

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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

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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. Insuranceis 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/herbeneficiary. 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.

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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.

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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

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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, SLICs

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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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.

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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, profitability 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-medicalapplication form is required.

Proposal number is allotted to each applicant for future referenceand 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 theunder writer. Chief medical officer of the state life assist the under writers indeciding 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 payment ismade. 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 equalto twelve basicssalaries. The loan is

refundable without any interest However, staffmember 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 I O N

In B&A department salary of the employees is calculated. Different allowances are offered to

the employees loan facilities are available forthe 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 I O 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 budget register 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 payment ofcommission 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 usedfor payment of commission to SR and secondused for paymentto SOand third Co py is used for

Comm ission SM

The commission rates are as given below:

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 (areamanagers). 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

First Year Premium Second Year Premium Renewals

SR 35 % 10% 5%

SO 15% 5% 2%

SM 08% 1% 0.5%

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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 ACRs 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


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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


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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 isallotted 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


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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.


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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


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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.


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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 topolicy 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


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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.


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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;


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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;

I t enables the sel ler to repeat a message many t imes , and i t 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 bas ical ly 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-Wa qat, The Khabrain , The

Nati on and The Jang provide this servi ce. 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 advert is ing 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


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Other media includes the private publication of SLIC such as pamphlets ,

Dairies, Calendar & Brochures and Eid Cards that are distributed to

cl ients by Zonal Offices with the in tention 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 corporat ion in

al locating i ts Promotional Budget among different media according to

the needs of campaign. Advertising agencies are also help corporation in

gett ing for corp orat ion s ads on TV, Radio and Prin t Medi a on the

commission basis.


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CHAPTER 3

INDIVIDUAL LIFE PLANS:


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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 andcannot 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-termfinancial 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:

Its 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


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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

childs 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 premiumsunder the policy are waived and policy remains in force with full sum insured and

continues to participate in State Lifes 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:


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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.


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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 incomeof 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.


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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.


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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,


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the unclaimed installments of the sum assured and related special bonus will not

participate in State Lifes 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 Lifes 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:


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CHAPTER 4

INDIVIDUAL LIFE CLAIM


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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
http://www.statelife.com.pk/html/network_individual_offices.htmhttp://www.statelife.com.pk/html/network_individual_offices.htmhttp://www.statelife.com.pk/html/network_individual_offices.htmhttp://www.statelife.com.pk/html/network_individual_offices.htm


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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:

Policyholders 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:
http://www.statelife.com.pk/html/p_other_claims.htmhttp://www.statelife.com.pk/html/p_other_claims.htmhttp://www.statelife.com.pk/html/p_other_claims.htm


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Policy No:

Policyholders 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.


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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.


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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 physicians statement.

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

death benefit.

B. For disability claims

I. Employees statement.

ii. Employers statement.


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iii. Attending Surgeons 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


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FINANCIAL ANALYSIS


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HORIZONTAL ANALYSIS

1) BALANCE SHEET OF SLIC

LIABILITIES & OWNERS EQUITIES 2008 2007 2006 2005 2004

Share Capital and ReservesAuthorized share capital 50 0 0 0 0Issued, Subscribed and Paid-up Shares

capital 46.66667 20 20 20 0Accumulated Surplus -47.0657 26.8231 55.5503 51.72448 0Net shareholders Equity 28.38173 21.33102 26.93501 26.18868 0Balance Of Statutory Fund IncludingPolicy Holders Liabilities 105.8426 81.80641 60.02554 11.30473 0Deferred LiabilitiesStaff retirement benefits 1363.357 1247.243 1254.827 15.74951 0Creditors and accruals

Outstanding claims

138.080

9 99.10492 72.3503 9.020875 0Premium received in advance 611.4846 516.3021 411.9466 5.168904 0Amount due to others insurer 218.2299 129.7406 143.9866 26.12724 0

Amount due to agents

209.957

4 119.0238 93.79025 -23.2395 0

Accrued expenses

269.520

3 173.9624 102.0177 28.73734 0Income Tax Payable -100 -8.17742 -62.44 -100 0

Inter fund balance

196.780

8 363.8114 162.2941 -96.4168 0

Others

18.4983

4 -43.4775 -40.7949 -31.4699 0159.454

1 112.4039 80.25949 -2.36123 0Others liabilities -100 -100 -100 0 0

Total Liabilities

109.908

4 84.5008 62.16152 10.75883 0Total 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

Current and others

92.6193

4 -48.9681 19.13514 17.60677 0Deposits maturing within 12 months 419.4071 266.3783 335.6437 66.29177 0Fixed deposits maturing after 12 months 79.08288 23.63152 -1.88036 -10.5675 0

264.956

2 135.2916 187.7734 38.99388 0Loans secured against life insurance

policies 153.5348 112.3802 71.44092 8.835894 0Loans secured against others assets

To employee

42.2326

2 42.56103 41.31515 -6.13052 0


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To agent -42.2871 -41.7277 -43.587 -23.3443 0

Others

13.7179

5 -21.4957 -49.5299 32.13675 029.8475

7

29.72321 28.02431 -8.05082 0

Unsecured loans

To employees

113.804

4 111.7844 106.1541 -11.9654 0

To agents

67.7575

9 61.30764 40.76635 -21.9387 0Others

102.427

6 99.31314 89.99873 16.64638 0Investments

Government securities

93.3910

5 78.96664 51.11245 10.57931 0Others fixed income securities -39.7118 -66.925 -67.4404 -9.13959 0

Listed equities

201.286

9 166.0236 150.7825 16.41283 0

Unlisted equities

519.654

1 -22.5639 -22.7285 -13.2849 0Holding in subsidiary companies 0 0 0 0 0Less: provision for diminution in value -12.6719 -24.7743 -24.5764 -17.0329 0

101.918

8 83.14125 57.38209 10.56067 0Investment property

Cost14.84919 9.139894 6.99261 0.752499 0

Less: provision for impairment in value -6.65635 -6.19195 -5.88235 -2.63158 0Less: accumulated depreciation 73.09534 62.49654 52.41697 13.68772 0

-2.82526 -7.05198 -6.79214 -3.17297 0Others assetsPremium due but unpaid 347.3359 321.2075 214.9668 11.00388 0Amount due from others insurer 292.4861 41.60787 108.9626 -83.2458 0Agent balances -36.1963 -36.1963 -34.3558 -1.22699 0Investment income due but outstanding 24.58117 13.38542 4.366863 -13.4503 0Investment income accrued 2714.639 2293.848 1989.321 -60.9865 0Taxation -97.5183 -100 -100 3.483621 0

Prepayments

4.15778

9 2.022984 4.450564 -1.80727 0

Inter-fund balance

196.784

8 363.8177 162.2977 -96.4168 0Sundry receivables -80.2896 -61.7234 -79.1023 -46.9725 0Others -91.8593 -93.0644 -93.3167 -13.6019 0

68.4128

9 58.3409 23.60692 -5.10066 0Fixed assets-tangiblesFurniture, fixture, office equipment

Computer and vehicles 46.95191 36.38195 29.85962 20.34659 0Less: accumulated dep. 36.00222 38.09953 32.86283 6.880404 0

123.231 24.41671 8.938147 114.1568 0


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3Total 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

fundsReturn 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 bankdeposits

Gain on sale of investmentNet 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 0Profit 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 & OWNERS 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


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Net shareholders Equity 0.6194235 0.6657109 0.7913996 1.1477348 1.0088101

Balance Of Statutory Fund Including

Policy Holders 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


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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 attr ibutable 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


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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 firms 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 firms 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 firms investment in current assets has increased In


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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 currentassets 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 peoples 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 firms 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 firms profits with respect to a given level of sales, a certain level of assets, or the


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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 firms 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 2004Net 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 companys

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.


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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 2004ROE 24.8% 24.4% 23.9% 20.75% 19.5%

CHAPTER 6


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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 bythe 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


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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


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State Life Insurance Corporations 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


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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 doesnt 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 dont 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.


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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.


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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


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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.


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CHAPTER NO 7

SUGGESTIONS & RECOMMENDATIONS


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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 i t wil l be easy for customer to reach

their concerned section.

There should be proper sit t ing 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

i l l i terate and cant 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 l ife

and deals with the medicals of the new customers.

Sales Rap should properly guide to the policyholder the

best policy for him.


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There is a need of more and extensive training of office

workers.

The culture of the SLIC should be developed and steps shouldbe taken to make it s trong 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 & regulat ions 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 organizat ion should be given

appropriate response.


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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,


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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

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