askari general Insurance Co.

Ltd

PART-1
Information About Insurance.

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Insurance
Insurance is a system by which a risk is transferred by a person, business, or organization to an insurance
company, which reimburses the insured for covered losses and provides for sharing the costs of losses among all insured.
Risk, transfer, and sharing are vital elements of insurance.
Insurance people are no longer in the business of forming fire brigades to put out fires at members homes, as they did
centuries ago. But the idea of combining resources to protect against loss is still basic to the insurance business.
Insurance companies are now financial institution. They sell insurance policies to protect people against financial
hardship caused by accidental losses. The insurance company is an insurer. A person, business, or organization that is
covered, or insured, by an insurance policy is referred to as an insured.
To purchase an insurance policy and became an insured, an insurance buyer pays a insurance fee, called an insurance
premium, to the insurance company. To keep the insurance policy in effect, the insured pays more premiums at periodic
intervals.
The insurance company pools these premiums to form a fund from which those insured who suffer losses- unfortunate
victims of fires, vehicle accidents, earthquakes, and so on can be reimbursed. Each insured pays a relatively small
amount into the poll. These relatively small premiums, added together, develop a sizable fund from which payments are
made to compensate the insured who have losses. In this way, for a reasonable cost, each insured can be sure that a loss
will not cause undue financial hardship.

RISK

TRANSFER

SHARING

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Types of Insurance
There are two types of insurance
1) Life insurance
2) Non life insurance

Life insurance
Loss of a family member is a catastrophe which glooms a familys life. But even more tragic is the death of a sole bread
earner for the family, who then has to go through the pain of losing their loved one, as well as the financial loss putting
their survival in jeopardy. This financial hardship due to a sudden death of a family member or a disability resulting to a
loss of job or inability to work can be avoided to a great extent by taking up a life insurance policy. A Life insurance or
disability insurance covers such losses and pays a family, compensation to restore the earnings lost by them due to a
sudden death or disability. The monthly premiums for a life insurance are generally based upon the age, health, and
occupation information of the applicant, in addition to the total benefits to be paid to him for his policy.

Non-life insurance
Non life insurance or General Insurance is a form of insurance mainly concerned with protecting the policyholder from
loss or damage caused by specific risks. Examples includeProperty/Casualty Insurance, Health/ Disability Insurance
,Business/ Commercial Insurance
General insurance
Health care insurance

General insurance
General insurance or non-life insurance policies, including automobile and homeowners policies, provide payments
depending on the loss from a particular financial event. General insurance typically comprises any insurance that is not
determined to be life insurance. It is called property andCasuality insurance

Health Care Insurance

With such high medical and health care costs these days, its hard to even think about visiting a doctor. But what about
an unexpected mishap or an unforeseen disability or attack, where the potential medical bills could shoot up to a sky?
Where would you get so much money from? These are exactly the situations where you feel you had a security,
something which could come to your rescue and save you from such financial crisis. While some companies do provide
its employees with health insurance, for others, this is a must. Especially for the aging couples, who have a
comparatively more chances of needing emergency bill money. The health insurance does it all, so that they do not have
to worry for the huge payments at the last minute. A health insurance can cover all from a routine immunization to a
major illness. History of insurance. In some sense we can say that insurance appears simultaneously with the appearance
of human society. We know of two types of economies in human societies: money economies (with markets, money,
financial instruments and so on) and non-money or natural economies (without money, markets, financial instruments
and so on). The second type is a more ancient form than the first. In such an economy and community, we can see
insurance in the form of people helping each other. For example, if a house burns down, the members of the community
help build a new one. Should the same thing happen to one's neighbour, the other neighbours must help. Otherwise,
neighbours will not receive help in the future. This type of insurance has survived to the present day in some countries
where modern money economy with its financial instruments is not widespread (for example countries in the territory of
the former Soviet Union).
Turning to insurance in the modern sense (i.e., insurance in a modern money economy, in which insurance is part of the
financial sphere), early methods of transferring or distributing risk were practiced by Chinese and Babylonian traders as

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long ago as the 3rd and 2nd millennia BC, respectively. Chinese merchants travelling treacherous river rapids would
redistribute their wares across many vessels to limit the loss due to any single vessel's capsizing. The Babylonians
developed a system which was recorded in the famous Code of Hammurabi, c. 1750 BC, and practiced by early
Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he would pay the lender an
additional sum in exchange for the lender's guarantee to cancel the loan should the shipment be stolen.

Achaemenian monarchs were the first to insure their people and made it official by registering the insuring process in
governmental notary offices. The insurance tradition was performed each year in Norouz (beginning of the Iranian New
Year); the heads of different ethnic groups as well as others willing to take part, presented gifts to the monarch. The most
important gift was presented during a special ceremony. When a gift was worth more than 10,000 Derrik (Achaemenian
gold coin) the issue was registered in a special office. This was advantageous to those who presented such special gifts.
For others, the presents were fairly assessed by the confidants of the court. Then the assessment was registered in special
offices.
The purpose of registering was that whenever the person who presented the gift registered by the court was in trouble,
the monarch and the court would help him. Jahez, a historian and writer, writes in one of his books on ancient Iran:
"[W]henever the owner of the present is in trouble or wants to construct a building, set up a feast, have his children
married, etc. the one in charge of this in the court would check the registration. If the registered amount exceeded 10,000
Derrik, he or she would receive an amount of twice as much."[1]A thousand years later, the inhabitants of Rhodes
invented the concept of the 'general average'. Merchants whose goods were being shipped together would pay a
proportionally divided premium which would be used to reimburse any merchant whose goods were jettisoned during
storm or sinkage
The Greeks and Romans introduced the origins of health and life insurance c. 600 AD when they organized guilds called
"benevolent societies" which cared for the families and paid funeral expenses of members upon death. Guilds in the
Middle Ages served a similar purpose. The Talmud deals with several aspects of insuring goods. Before insurance was
established in the late 17th century, "friendly societies" existed in England, in which people donated amounts of money
to a general sum that could be used for emergencies.
Separate insurance contracts (i.e., insurance policies not bundled with loans or other kinds of contracts) were invented in
Genoa in the 14th century, as were insurance pools backed by pledges of landed estates. These new insurance contracts
allowed insurance to be separated from investment, a separation of roles that first proved useful in marine insurance.
Insurance became far more sophisticated in post-Renaissance Europe, and specialized varieties developed.
Toward the end of the seventeenth century, London's growing importance as a centre for trade increased demand for
marine insurance. In the late 1680s, Mr. Edward Lloyd opened a coffee house that became a popular haunt of ship
owners, merchants, and ships captains, and thereby a reliable source of the latest shipping news. It became the meeting
place for parties wishing to insure cargoes and ships, and those willing to underwrite such ventures. Today, Lloyd's of
London remains the leading market (note that it is not an insurance company) for marine and other specialist types of
insurance, but it works rather differently than the more familiar kinds of insurance.Insurance as we know it today can be
traced to the Great Fire of London, which in 1666 devoured 13,200 houses. In the aftermath of this disaster, Nicholas
Barbon opened an office to insure buildings. In 1680, he established England's first fire insurance company, "The Fire
Office," to insure brick and frame homes.
The first insurance company in the United States underwrote fire insurance and was formed in Charles Town (modernday Charleston), South Carolina, in 1732. Benjamin Franklin helped to popularize and make standard the practice of
insurance, particularly against fire in the form of perpetual insurance. In 1752, he founded the Philadelphia
Contributionship for the Insurance of Houses from Loss by Fire. Franklin's company was the first to make contributions
toward fire prevention. Not only did his company warn against certain fire hazards, it refused to insure certain buildings
where the risk of fire was too great, such as all wooden houses. In the United States, regulation of the insurance industry
is highly Balkanized, with primary responsibility assumed by individual state insurance departments. Whereas insurance
markets have become centralized nationally and internationally, state insurance commissioners operate individually,

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though at times in concert through a national insurance commissioners' organization. In recent years, some have called
for a dual state and federal regulatory system for insurance similar to that which oversees state banks and national banks
The earliest authenticated insurance contract (i.e. That which displays the characteristics of insurance in the sense of a
transfer of risk of loss due to a fortuitous uncertain event in lieu of payment of consideration / premium), is a marine
insurance contract on a ship The Santa Clara dated 1347 in Genoa. The policy is in the Italian language and appears in
the form a maritime loan to avoid the canon (church) prohibition against usury.The earliest insurance contracts did not
appear in the form of a modern insurance contract, but rather was drafted in the form of either a fictional sale or loan,

until the insurance contract proper was recognized and accepted.The earliest insurers were merchants underwriting risks
for fellow merchants, on a part time basis. Until the 1800-1900s premiums were not determined by statistics kept etc.
as in the modern sense, but was often arrived at as a result of haggling.The contract of insurance was not created as a
result of judicial or legislative innovation, but by the merchants themselves as a result of commercial expediency and
need (Necessity being the mother of invention).Early legislation was passed to counteract fraud or malpractices

Reinsurance
Reinsurance is a means by which an insurance company can protect itself against the risk of losses with other
insurance companies. Individuals and corporations obtain insurance policies to provide protection for various risks
(hurricanes, earthquakes, lawsuits, collisions, sickness and death, etc.). Reinsurers, in turn, provide insurance to
insurance companies.Insurers take out their own insurance - this is called reinsurance. When you look at the risks that
insurers take on, it is not surprising that they. Insurers take out their own insurance - this is called reinsurance.When you
look at the risks that insurers take on, it is not surprising that they themselves might want to have insurance. When
insurers insure a risk again, it is called reinsurance. A third of all business carried out at Lloyds is reinsurance.
Reinsurance is an extension of the concept of insurance, in that it passes on part of the risk for which the original insurer
is liable. Reinsurance contracts are slightly more specialist than insurance contracts but for most part they work in
exactly the same way it is just that the insured is another insurer, known as the reinsured (See The Basics of
Insurance for an explanation of how insurance contracts work). A contract of reinsurance is between the insurer and
reinsurer only and legally there is no direct link between the original insured and any reinsurer. The original insurer is
still the one who must pay any claim from the insured the insurer must then make its own separate claim against the
reinsurer. Reinsurance is important for a number of reasons, including:
To protect against large claims. For example, in the case of a fire in a large oil refinery or a large city hit by an
earthquake, insurers will spread the risk by reinsuring part of what they have agreed to insure with other reinsurers so
that the loss is not so severe for any one insurer.
To avoid undue fluctuations in underwriting results. Insurers want to ensure a balanced set of results each year
without peaks and troughs. They can therefore get reinsurance which will cover them against any unusually large
losses. This keeps a cap on the claims the insurer is exposed to having to pay itself.
To obtain an international spread of risk. This is important when a country is vulnerable to natural disasters and an
insurer is heavily committed in that country. Insurance may be reinsured to spread the risk outside the country.
To increase the capacity of the direct insurer. Sometimes insurers want to insure a risk but are not able to do so on
their own. By using reinsurance, the insurer is able to accept the risk by insuring the whole risk and then reinsuring the
part it cannot keep for itself to other reinsurers.Like the direct insurance market, reinsurance usually involves specialist
brokers who have expert knowledge of the market and access to reinsurance underwriters on behalf of their clients

Insurance business in Pakistan

The foregoing analysis has been undertaken with a positive approach. It is hoped that this will help create an awareness
towards expanding the horizon of life insurance by tapping the untapped potential. A strong strategy with a breakthrough
approach is the crying need. All stakeholders must join hands together to achieve the above object and ensure that life
insurance business expands. This will provide employment openings to the educated youth, strength social fabric of the

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country, extend welfare front and all told will enable life insurance sector to serve the country in a pronounced manner.
The earlier this is done the better. Financial listed sector in Pakistan includes: Mutual Funds (open and closed),
Modarbas, leasing, banks (investment and commercial) and insurance. Life insurance in Pakistan (domestic and foreign)
was nationalized in 1972 and State Life Insurance Corporation (SLIC) was established. Later when democratic set up
started towards the end of 1980s and in 1990s, life insurance business was opened up to private sector on a modest
scale SLIC annual reports are available and based on its 2005 report, some analysis has been carried out. It reveals
tremendous potential to be tapped in Pakistan.

Growth in Force: Individual Lives

The following box No. 1 presents statistical data for the last five years. The analysis is based on
normal base concept of index and rolling concept of index.
Box -1
SLIC: Growth in Policies in Force: Individual Lives
Year
2005
2004
2003
2002
2001

Number (Million)
2.04
1.93
1.85
1.80
1.81

Percentage (%)
Base Index
112
106
102
099
100

Rolling Index
106
104
103
99
100

Source: Extracted and calculated from: Annual Report 2005, State Life Insurance Corporation of
Pakistan, P. 61.
The above box presents a statistical analysis. It shows how slow is the progress and how big is the
potential. Following conclusions can be drawn:
Annual average growth in the above five years has been 2.4%.
Rolling Index presents a sharper analysis and is a wake up call for an aggressive marketing strategy.
A breakthrough is needed to ensure quantum jump in number of individual life policies.
To accomplish the objectives of SLIC, a bold marketing approach is needed to Widen areas of
operations of life insurance for common man and in towns and villages.
There is a need to revisit the declared Objectives of SLIC and initiate a self analysis. A Stakeholders
Conference may be held to help SLIC to achieve its objectives.
Insurance culture as a Way of Life needs to be cultivated through a market driven approach. Synergy
can be created through seminars, workshops, insurance fairs, puncturing fears of potential policy
holders and undertaking all steps which would ensure success of the cause of making insurance a
Way of Life.
Qualitative and quantitative analysis of existing training courses for field orientation be undertaken
for improvement.
A strategic plan for Manpower Development, Department of SLIC is the crying need of today.
Leading Universities in Pakistan must start BBA (Hons) four years and MBA two years and Executive
MBA two years program. Hailey College of Banking & Finance, the 5th Constituent College of the

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University of the Punjab, Lahore has provided a lead in this respect in 2006 for the first time in the
history of Pakistan.
Degrees by leading Universities in Pakistan be offered with a clear and transparent manifestation of
Insurance & Risk Management. This will broaden the scope of job openings. These will be available
in several sectors and not in Insurance industry alone.

The Ministry of Commerce, Government of Pakistan, under the able leadership of Mr. Humayun
Akhtar, is ever keen to develop a strong infrastructure for insurance education in Pakistan. It is hoped
that some announcements in this respect will be made in the forthcoming Trade Policy for 2007-08 to
be announced in July 2007.

SLIC GROWTH IN POLICIES IN FORCE: GROUP LIVES

Group life is compulsory in Pakistan for specified industries who employ certain workers above an announced
threshold. It is mandatory in Pakistan. The following box captures overall position.
Box -2
SLIC : Growth in Policies in Force: Group Lives
Year

Number (Million)

2005
2004
2003
2002
2001

3.73
3.90
3.63
3.44
3.30

Percentage (%)
Base Index
113
118
111
104
100

Rolling Index
96
106
107
104
100

Source: Extracted and calculated from: Annual Report 2005, State Life Insurance

A careful analysis of the above box reveals the following:

Annual average growth during the last five years has been 2.6%.
Unfortunately in 2005, declining trend was manifested. This is a wake up for SLIC. It appears that the
aggressive and motivated private sector in life insurance seems to be capturing the share of market
and thus the base Index and Rolling Index have shown a declining trend. This feedback be taken with a
positive outlook and the trend must be reversed. The strategic thinkers of SLIC must at least target an
annual increase of 10% rather than stay content with the present situation.
For achieving the suggested target of 10% mentioned in para (2) above, a strategic plan be prepared
and its implementation be periodically monitored to help achieve positive results.
A Mapping Chart approach be used to ensure proper analysis, field visits to potential sectors and lay
out all logistical goals to achieve the foregoing suggested results.

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An institutionalized approach of MIS through computer assistance can help achieve the foregoing
suggested objectives. Nothing succeeds like Success. Target for annual growth be established and
achieved through financial and non- financial approach.

Part-4
Departments of Company

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Organizations Hierarchy
Chairman

Board of Directors

Managing Director &

Chief Executive

Joint General
Manager

Manager
Shares &
Investment

General Manager

Manager
Marketing &
Development

Deputy
Manager
Claim

Deputy
Manager
Reinsurance

Human
Resource
Manager

Chief Internal Auditor

Senior
Manager
Underwriting

Manager
Administratio
n

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Manager
Accounts
&
Finance

MIS
Manager

askari general Insurance Co.Ltd

Human Resource Department

Human Resource Department is the essential part of any organization to hire best qualified candidates without
regards to its race, religion, sex, color and national origin. Employees need to be trained to functions effectively
within the organization and HRD has to oversee this function, further once the staff is hired and trained, the
organization has to provide for the continuing personal development of each employee. Company has
established a separate HRD and after the establishment of this department the working environment of SSICL
has become well structured to ensure workers to stay in the organization while simultaneously effecting new
applicants as well. Due to which the turnover rate of employees has now dropped quite significantly.

Departments Hierarchy

Managing Director &

Chief Executive

Chief Internal Auditor

Chief Manager

Assistant Manager

Objectives of Human resource Department

To ensure that adequate and suitably experienced staff is recruited and provided, so that the Companys
objectives can be achieved more efficiently & effectively.
To ensure those policies that support human resource department.
To monitor performance and absenteeism, to lowering cost, to increase profitability, efficiently and
effectiveness of manpower.

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Main Functions of HRD

Human resource department of SSICL takes care for four main functions without which no organization can
survive.

The staffing function

Recognition of need of manpower for the Company

Defining job specification for fulfilling the need.

Establishment of the recruitment criteria.

Recruitment process

Training & Development functions

Job Orientation
Employee Training
Employee Development
Career Development
The Human Resource Department of Silver Star Insurance Company Limited focuses the training and
development of its employees. The management of the Company also believes that training and development
programs play a vital role to increase the performance of the human resource. Human Resource Department has
recognized two broad classified training and development programs for their marketing & development and
general staff, which are as:
Insurance based training programs
Non-Insurance based training programs
Company also undertakes in the house lectures, seminars and meetings particularly designed,
where not only staff members but outsiders are also invited for participation .

Motivation functions
Annual increments
Outstanding performance increments
The best employee of the year award
Job rotation

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Underwriting Department
The underwriting department of the Company is the most significance department, as for any other insurance
organization engaged in providing insurance services & deals with customers queries and provides the
protection according the insureds satisfaction and tranquility with coverage of suitable risk. The underwriting
department is considered as the backbone of an insurance company who either can accelerate the profitable
figures in premium income with the cooperation of its marketing and development department staff or can
enhance the companys liability with the procurement of erroneous risk. The Underwriting department of Silver
Star Insurance Company is engaged in the class of general insurance of Fire, Marine, Motor, Miscellaneous and
Bond.The underwriting department issues the policies after careful evaluation of associated risks which comes
for coverage; its the duty of the Underwriting department to examine the risk and take all precautionary steps
for evaluation before issuing policies / cover notes which the companys management has determined.The top
level management has established overall underwriting plans and strategies, and the underwriting department is
responsible to follow and develop specific guidelines to cope with the policy and strategy formed and
implemented by the top level management of the company. With board strategy and specific directives aligned,
the department executes the risk selection and risk pricing process. The department also keeps in mind all of the
underwriting elements before designing and pricing an insurance cover note.

Departments Hierarchy

Senior Manager

Manager

Deputy Manager

Assistant
Manager

Assistant
Manager

Assistant
Manager

Assistant
Manager

Assistant

Assistant

Assistant

Assistant

Some of the important objectives and strategies of the Underwriting department are given as
follows.

Objectives of Underwriting Department

To evaluate and reduce the risk, specifically in respect of expected claims.
To provide maximum protection and better services to our clients.

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To provide complete information and guidelines about the insurance to our clients when
ever required.
To ensure optimization of cost.
To develop a sound relationship with all other functioning departments of the company.

Strategies of Underwriting Department

Main focus on enlistment in bank and financial institutions to keep the risk limit as low as possible.

The management of the underwriting department seriously believes on the Fire insurance segment to
make it beneficial by reducing loss ratio, for this purpose the management of underwriting department
has been seized in the controversial and congested areas and aims at better risk management.
Apply the reasonable rates of premium on insurance services to be provided, keeping in view
competitive and current market situations.
Review of internal performance of underwriting department preferably on quarterly basis rather than
annually basis.
Management wants to increase Marine insurance business in import.

Main Functions of Underwriting Department

The responsibility of the Underwriting department is to examine, accept or reject the business
containing on day to day work.
First of all when any client who wants insurance policy to protect his stokes or any property, the staff
of the Underwriting department is involved in this matter to feel the hazards which are associated with
the risks come for insured. There are two main hazards physical and moral hazard that the
underwriting department keeps in mind when issuing any property. In physical hazards, it is important
to remember that the structural condition of the insured property. If a severe moral hazard exist, then
no rate is adequate to compensate for such hazards. Decisions of the underwriting department are of
two types which are as follows.

Decision on applying an insureds existing policy for a specific request for coverage.

Decision on new risk coverage.

Once the Underwriting department has decided that a risk is acceptable, it finally undertakes solid
steps to evaluate all risks.
Then it examines the authenticity of cover notes issued by marketers. It carefully examines the interest
rates written on the cover notes according to the tariff rates provided by the Insurance Association of
Pakistan. Then identify risks associated in each cover note and then classify as hazards or non-hazards.
It also ensures all warranties and clauses included in the cover note / policy. After this its responsibility

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is to examine the parties involved in insurance (preference is given to those cover notes and policies
where banks or financial institutions are involved).
Finally after the completions of the assessment of risks, rating procedure and warranties, the
authorized insurance policies documents are issued to the particular clients.
Another major activity of this department is that it has to make Endorsement/Amendment forms
(whose preparation procedure is almost similar as of issuing insurance policy but It is required to
prepare when any client that have taken an insurance policy but then after sometime he feels that he
can suffer loss in case of any damage, due to any change in the status of the particular insured (amount
of cash, property or organization) and insists the company to make some changes in the policy. But it is
necessary that there should not be any damage occurs till that time when client wants changes in the policy.

Claim Department
To all intents and purposes, the claim department also plays a very important role in an insurance company. It
does not matter how cheap an insurance companys premium are, or how efficiently they conduct their
underwriting administration if the claim is not properly and fairly dealt with. This is where an insurer is judged.
However an insurer has obligations to its policyholders, all of whom have contained the common pool from
which claims are paid. There are more interests than those of the individual claimant to be considered. For this
reason, the claimant has certain obligations that they have to meet before any settlement will be paid.

Departments Hierarchy

Managing Director &

Chief Executive
General Manager

Deputy Manager

Assistant Manager

Assistant

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Objectives of Claim Department

To provide our clients better services than any other Insurance Companys claim department can
provide.
Fully cooperate with the clients and compensate for their loss if any damage occurs to their property.
To solve the issues of claims fairly and properly.
Try to reduce the loss of the company by investigating the particular claims efficiently and effectively.

Role of Claim Department

The source of the largest outflow of money within an insurance company is its claim department. Therefore, the
position of the claim department vital to developing operational excellence and its performance can play a very
critical role to achieve the companys objectives. We can analyze the role of the claim department as follows:
To ensure that it has sufficient resources to meet companys objectives.
Use clear claims procedures, including reserving practices.
Maintain the close relationship with their reinsurers.
Monitor and control the internal cost of running the department and monitor the claims payments
and recovery from reinsurers.
Identify valid and invalid claims by analyzing the terms and conditions of the policy together with
the claims information.
Ensuring that accurate and timely reserves are allocated to claims.
Making all possible recoveries as quickly as possible.
The claim department is also responsible to advice the underwriting department regarding development of
effective insurance policies after analyzing different claims.

Main Functions of Claim Department

The Claim Department of SSICL, examiners investigate insurance claims, negotiate settlements, and authorize
payments and assess the cost or value of an insured item; deal with claims about which there is a question of
liability and where fraud or criminal activity is suspected. Mostly individuals and businesses purchase insurance
policies to protect against its monetary losses. In the event of a loss, policyholders submit claims, or requests for
payment, seeking compensation for their loss. The Company contacts the surveyors or examiners and
investigators that work primarily for property and casualty insurance etc. for whom they handle a wide variety of
claims alleging property damage, liability, or bodily injury. The main role of the surveyors & investigators is to

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investigate the claims, negotiate settlements, and authorize payments to claimants, all the while mindful not to
violate the claimants rights under Federal and State privacy laws. They must determine whether the customers
insurance policy covers the loss and how much of the loss should be paid to the claimant. Surveyors plan and
schedule the work required to process a claim that would follow, for example, an automobile accident or damage
to ones home caused by a storm. They investigate claims by interviewing the claimant and witnesses, consulting
police and hospital records, and inspecting property damage to determine the extent of the companys liability.
Surveyors may consult with other professionals, such as accountants, architects, construction workers,
engineers, lawyers, and physicians, who can offer a more expert evaluation of a claim. The information gathers
including photographs and written or audio tape or video tape statements, is set down in a report and give it to

the Claim Department of SSICL. Claim Department is then checks the record of the insurance policy of the
particular claim and checks all the warrantees and clauses that have mentioned on the policy by considering the
report of the surveyors. When the policyholders claim is justifiable, the Claim Department of SSICL negotiates
with the claimant and settles the claim. If the loss is 100% then the claimant is given the entire sum insured, but
incase of partial loss, the claim department of SSICL compensate with the claimant only for the actual loss that
mention in the surveyors reports.

Marketing & Development Department

Silver Star Insurance Company limited is engaged in providing insurance services to the customers; therefore
the important field and development cannot be neglected. Marketing and development force is like lifeblood for
the Company.The future growth and success depends and correlate with the support of its development line.
The development line of the Company depends upon:
Bank enlistment and limits arrangements matters
Reinsurance arrangements of the Company
Co-insurance arrangements of the Company, if any
The responsibility of the Companys management is to provide a scope for exploration market opportunities and
guidelines for the selection of the business and the responsibility of the development staff is to produce good
and favorable results, on highly ethical and professional basis for the Company.

Departments Hierarchy

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Managing Director &
Chief Executive

Manager

Assistant

Objectives of Marketing & Development Department

Open new branches in new territories in order to expand outreach, initially in Punjab
and Sindh and then in other provinces.
Focus on encouragement and reward for best results.
Appraisal performance on merit.
Performance will be evaluated on regular intervals of each marketer.

Administration Department
Administration department of SSICL is responsible for:
Proper office working environment
Security measures
Attendance
Record of assets and properties
Arrangements of meetings
Stationery
Safe custody of Companys record

Departments Hierarchy

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Manager

Deputy Manager

Dispatcher /
Assistant

Driver
2

Telephone
Operator

Security
Guards
2

Junior Officer

Driver
2

Driver
2

Finance & Accounts Department

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

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Departments Hierarchy

Chief Financial Manager

Chief Manager

Assistant Manager

Assistant

Assistant Manager

Assistant

Assistant

Objectives of Finance & Accounts Department

The importance of Finance & Accounts Department is of value and contributes numerous services,
which are of value for information and decision making purposes. The objectives are as follows.
Preparation and keeping record of all financial transactions of the company.
Preparation of financial statements (quarterly, half yearly and annual accounts).
Accomplishment of process of statutory audit.
Complete the process of audit review for half yearly accounts.

Compliance with the requirements of insurance ordinance, 2000 and insurance rules,
2000 there under.
Compliance with the requirements of the ordinance, 1984
Compliance with the requirements/directives of Securities and Exchange
Commission of Pakistan (or insurance department) applicable to the company.
Compliance with the requirements of taxation law applicable to the company.
Compliance with the requirements of central excise duty law applicable to the
company.
Compliance with the requirements of the federal insurance fee laws applicable to the
company.
Compliance and adoption of the requirements of international accounting standards.

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To ensure that proper system of internal control is carried out.
Provision of information to management for planning and decision masking.
Arrangement of finance for the company whenever required.

Main Functions of Account Section

Some of the important functions of the accounts section are described as follows.
Preparation of vouchers
In account department under the supervision of concerned officers, I came to know different type
of vouchers being prepared and their process of preparation. Vouchers are written evidence of any
business transaction. The different type of vouchers being prepared by the accounts department of
Silver Star Insurance Company Limited is as under,
Cash payment vouchers
Cash receipts vouchers
Bank payment vouchers
Bank receipt vouchers
Journal voucher or adjustment vouchers
Premium vouchers
1) Cash Payment Vouchers
Being a public limited company cash payment vouchers are used for
recording the expense of less than five thousand. These types of vouchers
are prepared when cash payments are made against small expenses i.e.
repair, entertainment, miscellaneous etc. Evidence of expense is attached
with the cash payment vouchers.

2) Cash Receipt Vouchers

These types of vouchers are prepared when the account officer on behalf of
the SSICL is receiving cash. However, these types of vouchers are small in
quantity because majority of transactions are done by bank. On receipt of
cash, he prepared the cash received slip & then prepared the prepared the
vouchers.
3) Bank Payment Vouchers

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Bank voucher is relates to the payment by bank. When payment is made to
the bank, then bank is debited and Company is credited. Being a public
limited company the majority of payment transactions of the SSICL are
carried out through banks. As company has its branches in different cities of
Pakistan, so commissions or advances payments to the agents / brokers of
the company or the payments of the claims etc. are done through cheques.
For this Account officer checks the approval and mathematical accuracy
prepared the bank payment voucher. Account officer first confirms the
nature of expense.
Evidence of expense/asset is attached with the cash payment voucher.
4) Bank Receipt Vouchers
Bank receipt voucher are prepared, when the Company received cheques
against account receivable or advance payments of Premiums etc.
5) Adjustment Vouchers / Journal Vouchers
These types of vouchers are generally prepared in the following
circumstances;
Rectification of mistakes or omissions
Incase of the preparation of the reconciliation statements
Writing off assets i.e. depreciation store consumption etc
6) Premium Vouchers

Premium vouchers are made by the officers of the particular branch of the
company. These vouchers include the information of the (gross premium,
stamp duty, Federal insurance fee, Central excise duty and the amount of
net premium etc.). When an officer of branch of SSICL received the
amount of premium it made the premium voucher. If the amount received
by the agent was in the form of cash or cheque then he deposited the
amount of premium in the bank account of the company and attached the
deposit slip with the premium voucher and sent it to the companys head
office with a letter.
7) Ledger Posting

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Computer operator put log no and make posting in computer. Accounts of
SSICL are computerized and ledgers are prepared in computer. After the
preparation and coding of voucher it is sent to computer operator for
posting. A daily print out of all entries is checked to prove the accuracy.
After checking the accuracy the master file is update and posting is made
to respective account ledger by the computer.
Accounts department also handled the payments of the staff salary, traveling allowance and loans
to staff, medical allowance, provident fund and other such kind of payments. Bank reconciliation
statement is prepared periodically in order to find out reasons for disagreement between the bank
passbook and the cashbook. Reasons due to which there occurred discrepancies are as: uncollected
or un-credited cheques. Un-presented cheques, deposits in transit, amount received by bank on
Companys behalf, amount paid by bank on Companys behalf, errors and omissions, error of
transposition of figures, cheque deposited into bank but not entered cashbook.

Main Functions of Finance Section

As the main purpose of the Finance section is ensuring the availability of the funds for operation
and best utilization of available funds.Finance manger prepares weekly balance sheet & cash flow
statement in order to determine needs and utilization of funds. A monthly projected balance sheet
& cash flow statement is also prepared in order to determine the need of the coming month. An
assistant account officer prepared bank reconciliation statement of all the banks and reconciliation
statement of all branches of askari and list out the outstanding entries. He then traces the reason
for these entries and put bank reconciliation and Branch reconciliation on the table of Chief
Account officer. On receipt of bank statement the he prepares cash flow statement and presents it
to the Finance Manager for future actions.

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Part-6
Internship Activities (Work done by Me)

Work Done by Me
I worked for six weeks at askari general Insurance Company Limited, Lahore, as an internee. I
was placed in almost all departments of company and studied the whole organization, but I got a
chance to do some practical work in the Underwriting Department,Claim Department and Finance
& Accounts Department. This helps me a lot in preparing the internship report and the analysis of
the company and remarked about the company on the basis of my studied and analysis of the
financial statements and overall review of the company. Even though six weeks training is a very
short period to lean about any organization but I gain a lot of knowledge due to cooperative staff.

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My working hours in Insurance Company were, from 8:00 am to 5:00 pm with one hour lunch
break.
When I went to askari general insurance company at 10 Jun, 2007, they took me to Mr. Munir
Ahmed (CFO) and assigned him my supervisor. Mr. Munir Ahmed gave me introduction about the
Companys Business and told me its main functions. In the mean while Mr. Munir Ahmed
assigned me a task to visit different departments. I started visiting different departments from the
very next day and met with all the employees and observed their working.
After visiting the department, Mr. Munir Ahmed allocated Underwriting Department to me. I went
there; first I met with Mr. Zia-Ud-Din Zia (Senior Manager Underwriting). He gave me the
information about insurance policies that company is offering and how these were prepared. In
this department my main job was as follows:
Prepared cover notes
Prepared the insurance policy schedules
Sorting of the cover notes, policy schedules & their file keeping.
I was placed for two weeks in this department, and I wanted to be there for all six weeks of my
internship, due to interesting & variety of work and the knowledge that Senior Manager was
giving me.
After working in Underwritting Department, I was placed in Claim Department. Here I work
under the supervision of Mr.Iftikhar and Mr. Rao Ishaq. they was so kind to me. They told me
some of the important functions and operations of the department and also told me the procedure
of claims of each insurance policy that is offering to clients. My main work in this department was
as follows:
Typed the official letters
Filling of claims documents
Rarely, got a chance to go with the internal Survey team.
Finance & Accounts was the next department where I was placed. The finance & accounts
department of askari was combined to handle all accounts.
During my internship in this department I learn about the major functions of keeping the record
associated with accounting for services. I learnt also about bank reconciliation, ledger that are
necessary for management to know the sales figure, cash position, needs for the funds, and cost of
sales, administration expenses, financial expenses and other marketing expenses
. My main job in this department was as follows:
Prepared the Vouchers and recorded them in the computer.
Sorting of vouchers
Filing of vouchers
Typed the official letters

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New Knowledge Acquired

Askari general Insurance Company Limited is well known insurance company in insurance
industry of Pakistan. It was not an easy job for any internee to study the complete functions of the
Company within six weeks. I think one needed more time to study such a versatile type of
business. It was very difficult for me to manipulate all sort of information about askari general
Insurance Company Limited in a very short time. This internship program was very fascinating
experience for me and during my stay at askari general Insurance Company Limited, I learned so
many things and most of the information was quite new for me that will help me a lot in my
studies and in my future as well. The main thing that I learnt was insurance, its types, history,
about insurance companies & their services. So it was the best time for me to see the application
of the theoretical studies in the MBA classes in the practical fields.

Benefits of Internship on My Career

Internship is a planned learning experience, in which a student spends time in the workplace under
the supervision of workplace personnel, "learning by doing". Interns take the knowledge and skills
learned in the class room and apply them in real-life work situations, learning from professionals
while they explore and experience career options.
I have done my internship in askari general Insurance Company Limited, where I was placed in all
departments, and able to get the practical experience that will help me in future especially it helps
me to realize my strengths & weaknesses. The major benefits I have taken away from my
internship are the personal references I can use when in future if employers ask for them. That's
important, because now I have an actual reference letter from a work-related person rather than a
family friend. Plus, I've also been able to do some networking and I can get prospective leads on
other workplaces that might be hiring. Internship helps me in so many ways that will be very
helpful in my career, some are as follows:
Creates the potential for future work with the company.

Give me new skills and add to my knowledge base.

Gives me confidence in my own abilities.
Make a valuable addition to my resume
Help me to gain an advantage over other applicants who have not got experience.
Due to it I able to improve my critical thinking and problem solving skills.
Strengthens background in field of choice

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It gave me real world experience in a professional job setting. Academic
qualifications only go so far; employers are looking for students with related job
experience. So it will help me to get a job in financial institutions.

Due to the internship now I am able to explore potential careers that will help me to
choose what profession is best for me. It was also better to learn that I dont want to
pursue a certain career path than after I have graduated .

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Part-7
Findings & Recommendations

Findings
Askari general Insurance Company Limited is group based insurance company. That is providing
general insurance policies to its clients at the moments. During last couple of years, Company has
improved its performance up to great extend.
Companys claims & expense ratios are also drop significantly during the years due to the
better underwriting practices.
Company has developed the good contacts with the foreign reinsurance companies that
are of rating A.

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Company has rebuilt its structure and now it also has built its new head office in a
competitive environment.
Company has developed a new policy for the agents that all of them should have
licensed.
Company is targeting only a financial institutions, its main focus is on banks etc.
Due to the restricted market policy company is not able to become popular in general
public.
Proper Human resource Department, its only working as HR unit.
Company has no brushier or such forms for the clients to understand the different
services that company is providing.
Customer relationship services provided by the company are insufficient.
The agents of the company are not providing complete information to the customers
according to the tariff.

Recommendations
As each and every organization have some flaws in its system, so as askari general insurance
company. In this regard I tried to discuss with the employees and top level management that what
are actions necessary for the Company to fill up these gaps. Each and every one of them had a
different point of view. For the improvement the Company and to overcome the gaps some are the
important steps that Company should take to enhance its performance.
For the promotion purposes Company should develop a better website that includes all
the information about insurance rates of different policies that company is offering.
Especially it should include the important step necessary for taking insurance policy and
it should also include the important procedure of insurance claims, so that all those
people can also get benefits from the companys services that are unaware of insurance
and hesitate to take insurance policies due to complexity of the procedure.
In order to get maximum premium and become a market leader, Company should focus a
diversified target market.
Human Resource is one of the important factors for the better performance of any
organization. In HR department of askari general insurance company those employees are
working that have no knowledge of related field, due to which the turnover ratio of the
employees is increasing. Company should focus to develop a proper Human Resource
Department.

To target the industrial sector Company should introduce life insurance policies,
especially group insurance policies. As each industry goes to that insurance company that
provide life insurance policies with the general insurance policies.

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askari general Insurance Co.Ltd

Hailey College of Banking and Finance

askari general Insurance Co.Ltd

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