DEDICATIONS:
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
PEFACE
A student’s life is nothing but a continuous struggle to gain depth and expertise in his
field of study. It is a plunge into the vast ocean of hidden treasures, which are revealed by
turning the pages of books. This process is further supported by practical exposure in the
concerned field in the form of an internship program. An internship program aims at
grooming the best executives of the future and exposes them to the real processes in the field.
Therefore the department has organized a comprehensive training program to carve a gem
out of their potential.
I opted to select “New Jubilee Insurance Company” for gaining the experience of
internship and my experience during the period of two months was extremely beneficial. I
gained an insight into first hand knowledge and got awareness of their management and
working.
This internship report depicts the acquired knowledge in accordance with the
procedure learnt and observed. In this report is discussed the vision and mission of the
insurance company as a service provider together with a very comprehensive history of the
emergence and its management. A brief description of the products and services offered by
the company for the customers is followed. The main focus throughout however has
remained on the functioning. The later section discusses the experience gained by me and
finally the report contains the ratio analysis and the SWOT analysis of the organization
together with the recommendations and suggestions for further improvement followed by the
concluding remarks. In short, this report has been an endeavor to acquaint the readers with
procedures in a descriptive manner.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
ACKNOWLEDGEMENT
The following report could never have been materialized without the Blessing of
Allah Almighty, without the kind patronage of my Loving Parents who always pray for me,
the help of my teachers and key persons at NJI who never hesitated to provide important
information to me.
I take the pleasure of expressing my deep gratitude and whole hearted thanks to all
my respected teachers who have given me the opportunity to explore and gain a deep
understanding of wide field of insurance and risk management.
I was able to gain deep intellectual depth and was exposed to the fine technicalities
and the various dimensions that the field has. All this was possible due to the extended and
valuable support of my respected teachers who had been very cooperative and supportive
throughout the life the session. Their techniques, instructions and committed guidance
always served as a torched light of me and helped me overcome the academic problems I
had.
I especially thank for his great concern and cooperation for his students. His
farsighted policies and decisions have always aimed at upraising the quality of his students in
the practical field with the objective of providing awareness of practical expertise and to
acquaint them with the real management process. Thus acknowledging his efforts and
tremendous contributions towards the excellence of my academic career I find it my bounded
duty to express my regards to him.
Finally I express my high indebtedness to the zonal head Mr. Muhammad Ikram and
the staff for granting me permission to gain practical experience in this prestigious
organization. The staff had been extremely cooperative and supportive and it was only due
to their valuable suggestions and directions that I was able to successfully complete this
practical course of action.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
ABOUT NJI
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
COMPANY PROFILE
Established in 1953, NJI is one of the most reputable and brightest name in the
insurance sector. Sustained growth over half a century has secured NJI a place among the
“Big Three” Pakistani insurance in terms of gross direct premium and financial base. NJI is
listed on the Karachi & Lahore Stock Exchanges. Major shareholders include Aga Khan
Fund for Economics Development and Hashoo Group. NJI, with its Head Office in Karachi,
has an extensive and dynamic branch network in all major cities and towns of Pakistan that
guarantees prompt services at the customer’s doorstep. The company prides itself in its
longstanding reinsurance arrangements and relationship with international renowned
reinsurers such as Swiss Re, Munich Re, Lloyds, Hannover Re and Mitsui Smitomo Re. The
company is also supported by internationally acclaimed reinsurance brokers including AON
Group, Willis, Marsh and UIB. In 2003, NJI became the first Pakistani insurance company
to acquire a foreign company when it took over the Pakistan operations of Commercial
General Union. Together with AKFED, NJI also acquired majority control of CU Life
Assurance Company of Pakistan Ltd.
A NJI, diversity is maintained through underwriting all classes of general insurance
including fire, marine, motor, engineering, health and general accidents. NJI not only offers
wide risk coverage, but also provides related risk management services delivered by highly
qualified and experienced risk managers. NJI has developed unique and innovative
insurance solutions to meet the growing consumer financing trends of economy. From auto
financing to personal loans, mortgage to plastic carts and trade finance to capital investment
finance, NJI has the customized solutions to secure entire operations. Product range and
transactions of all financial.
As pioneers in Group Health Insurance, NJI continues to develop new, flexible and
customized plans to suit the diverse need of our many blue chip Pakistani companies and
multinational clients.
With a broad spectrum of services available, NJI’s client-base comprises prominent
national and multinational corporations operating in Pharmaceutical, Chemical, Textile,
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
Cement, Services (Hospital & Hotels), Oil & Energy, Manufacturing, FMCG, Engineering,
Banking and Financial sectors.
NJI’s business philosophy can be summed up as Customer Protection, Customer
Satisfaction and Customer Trust. This is acquired largely be ability to handle claims
effectively. The customer focus and pro-active management approach in all areas of
business, allow NJI to underwrite and handle claims in an expeditious and efficient manner.
The true test of soundness of insurance converge is the duration of client
relationships. This is proven by the fact that many clients have been with us for over 40
years. Clients are satisfied knowing that NJI is their best security.
“NJI is the only company among the top insurers to secure and sustain as Insurer Financial
Strength Rating of “AA” both by PACRA and JCR-VIS.”
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
MISSION
To provide our policyholders the highest degree of financial security, prompt and fair
settlement of their insured losses, professional and friendly services of all times.
To provide our employees a fair reward for their services, good working conditions,
stable employment’ and the opportunity for training, self development, long term
professional growth and prosperity with the company.
To earn a steady and satisfactory return for the shareholders on the company’s capital
and to strive for the growth and prosperity of the company.
To be a good corporate citizen and contribute to the uplift and welfare of the
community we live in.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
VISSION
To be acknowledged as the strongest and best insurance company of Pakistan and to
enjoy the highest level of trust and confidence.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
BOARD COMMITTEES
AUDIT COMMITTEE
Akbar Ali Pesnani – Chairman
Akbar Ali Hashwani
Mahmood Faruque
John Joseph Metcalf
Masood Hussain – Secretay
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
MANAGEMENT COMMITTEES
UNDERWRITING COMMITTEE
Tahir Ahmd Chairman
Akbar D. Vazir
M. Vaqaruddin – Member & Secretary
Muhammad Ikram
CLAIMS COMMITTEE
Tahir Ahmed – Chairman
Akber D. Vazir
Muhammad Safdar
Brendan D’ Lima – Member & Secretary
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
COMPANY INFORMATION
COMPANY SECRETARY
Atiq A. Mamudi
AUDITORS
Taseer Hadi Khalid & Company
Chartered Accountants
LEGAL ADVISORS
Liaquat Merchant Associates
MEDICAL ADVISORS
Dr. Tajuddin A. Manji
BANKERS
Standard Chartered Bank
Habib Bank Ltd
Soneri Bank
United Bank Ltd
SHARE REGISTRAR
THK Associates (Pvt.) Ltd.
RATING COMPANY
The Pakistan Credit Rating Agency (Private) Limited (PARCRA)
JCR – VIS Credit Rating Company Limited.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
EXECUTIVES
President & Managing Director
Tahir Ahmed, BE, MBA, ACII, Chartered Insurer
Executive Directors
Abdul Rahim, ACII
Atiq Ahmad Mahmudi, B.Com, LLB, FCA
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
WHAT IS INSURANCE?
A promise of compensation of specific future losses in exchange for a periodic
payment. Insurance is designed to protect the financial well-being of an individual, company
or other entity in the case of upexpected loss. Some forms of insurance are required by law,
while other are optional. Agreeing to the terms of an insurance policy creates contract
between the insured and the insurer. In exchange for payments from the insured (called
premiums), the insurer agrees to pay the policy holder a sum of money upon the occurrence
of a specific event. In most cases, the policy holder pays part of the loss (called the
deductible) and the insurer pays the rest.
Insurance people are no longer in the business of forming fire bridges to put out fires
at members’ homes, as they did centuries ago. But the idea of combining resources to protect
against loss is still basic to the insurance business.
Insurance companies are new financial institutions. They sell insurance policies to
protect people against financial hardship caused by accidental losses. The insurance
company is an insurer. A person, business, or organization that is covered, or ‘insured’ by a
an insurance policy is referred to as an insured.
The purchase an insurance policy and become an insured, an insurance buyer pays a
fee, call an insurance premium, to the insurance company. To keep the insurance policy in
effect, the insured pays more premiums at periodic intervals.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
The insurance company pools these premiums to form a fund from which those
insured who suffer lossess – unfortunate victims of fire, vehicle accidents, earthquakes, and
so on can be reimbursed. Each insured pays a relatively small amount (the premium) into the
pool. These relatively small premiums, added together, develop a sizeable fund from which
payments are made to compensate the insured who have losses. In this way, for responsible
cost, each insured can be sure that a loss will not cause undue financial hardship.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
FUNCTIONS OF INSURANCE
Risk Transfer Mechanism
Creation of Common Pool
Collection of Equitable Premiums
Financial compensation for losses
BENEFITS OF INSURANCE
Peace of Mind
Loss Control
Social Benefits
Investments of Funds
Invisible Earnings
Assist Business
Assist Credit
Assist Families
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
TYPES OF INSURANCE
Different Insurance Companies offer many types of insurance policies according to
the market demand and according to the compay’s financial situation as well. So here some
of the most known insurance policies are discussed as follows:-
GENERAL INSURANCE
Non-Life insurance is also called property and casualty insurance, property and
liability insurance or general insurance. In purchasing non life insurance, the customer is
buying financial protection against a specific insurable event, such as industrial injury.
Policies are typically short term (one year) indemnity (i.e. the customer will be compensated
in an agreed manner) contracts. Normally, there is no investment element or expectation of
financial return.
Non life insurance is further classified along personal and commercial lines.
• Fire insurance
• Marine insurance
• Automobile insurance
• Miscellaneous insurance
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
PRINCIPALS OF INSURANCE
Insurance based on the following principles:
MATERIAL FACT:
Every circumstances is material which would influence the judgement of a prudant
insurer in fixing the premium or determining whether, he will take the risk.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
INSURABLE INTEREST
“The legal right to insure arising out of a financial relationship recongnized at law
between the insured and the subject matter of insurance.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
PROXIMATE CAUSE
“Proximate cause means the active, efficient cause that sets in motion a chain of
events which bring a result, without intervention of any force started and working actively
from a new source.”
If the insured seeks to claim from his insurer for a loss, he must show that the loss
was caused as a result of a peril covered by the policy. There must be a direct
relationship of cause and effect, of which the cause must be proximate in
efficiency though not necessary in point of time. This takes into account that a
particular effect may be the result of a chain of causes in which each cause is a
natural result of the preceding cause, but the chain of causation may be broken by
intervention of a new and independent cause.
It is the dominant cause, not necessarily, the first cause not the last cause. In case
there are several causes operating, the proximate one will be the dominant, more
forceful one operating to bring about the result.
One method of coming to a decision is to begin with the first event in the chain
and imagine what is logically likely to happen next. If the answer leads to the
second even and so on until final event, then the fist event is the proximate cause
of loss.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
INDEMNITY
“To place the insured in the same financial position after a loss as he enjoyed
immediately before the loss.
CASH PAYMENT:
This is the method adopted in most of the cases. A cheque for the amount of loss,
payable under the policy is issued to the insured.
REPAIRS:
Under this method insurer provides all the expenses regarding the repairs of the
insured subject or get the subject repaired from his authorized repairer.
REPLACEMENT:
Generally speaking replacement method does not appeal to insurers and seldom used
to provide indemnity.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
REINSTATEMENT:
If refers to property insurance, where an insurer undertaking to restore or rebuild a
building or a piece of machinery damaged by peril insured. This option is rarely exercised
because of potential problem. Firstly, the insurer must restore the property substantially to
the same condition, failing which he will be liable in damages. Secondly, unless there is
express condition in the policy, the insurer cannot limit his expenditure to the sum insured.
He is bound once he has elected to reinstate, to do so irrespective of the cost.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
SUBROGATION
“It is the right of the insurer who has granted an indemnity to receive, after payment
of a loss, the advantage of every right of the insured, arising previously or in the future,
including rights in contract or in tort, which may diminish the insured’s loss.”
The doctrine of Subrogation has been adopted solely for the purpose of
preventing the insured from recovering more than a true indemnity, and it
does not arise from any of the terms of a policy of insurance.
Subrogation rights apply only where there is legal liability and do not apply in
respect of a gift of a charitable nature which is clearly expressed to benefit the
insured exclusively. Thus, if the insurers make an ex gratia payments they
are thereby deprived of any subrogation rights to which they would otherwise
have been entitled.
Rights to subrogation may accrue to the insurers as a result of tort or of
contract or of the provisions of a stature.
o Tort: In the case of a fidelity guarantee, the insurers are entitled to
claim against the defaulter re-imbursement of the amount which they
have paid.
o Contract: If goods are lost or destroyed in the hands of a bailee, such s
a carrier, the insurers may sue the bailee upon the contract of bailment.
o Statue: Where property is damaged in a riot, the property owner, by
virtue of the Riot (Damages) Act 1886 is entitled to compensation out
of the police rate for the district.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
CONTRIBUTION
“Where the insured has more than one policy under which claim for a particular loss,
there is, in the absence of a specific condition, nothing to prevent him the sum insured under
the policy he chooses is adequate to cover his loss.”
An insured may effect more than one policy to cover the same property or
interest, he can not recover in total more than a full indemnity.
The right contribution arises only when all the policies concerned:
o Cover the same peril,
o Cover the same subject matter and
o Are effected by or on behalf of the same insured.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
At the time of independence, the country had 5 domestic and 77 foreign insurance
companies. There companies were regulated under the insurance Act of 1938. The
government in 1948 established the Department of Insurance within the domain of Ministry
of Commerce to supervise the affairs of insurance industry and to safeguard the interests of
the insured. The Act was amended in 1958 for the fist time keeping in view the requirements
of domestic market and to have effective control over the insurance premium rates. Since
then, various amendments have been made in the Act.
The Department of Insurance further created the Controller of Insurance for the
supervising insurance business in the country.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
ORGANIZATION STRUCTURE
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
ORGANOGRAM
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
COMPANY AWARDS
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
Al Hamdo Lillah
NJI is the only top Pakistani insurer with the distinction of being assigned an
“AA” insurer financial strength rating by both PACRA and JCR – VIS
The fact that two independent rating companies have once again rated us as as
“AA” reaffirms NJI’s Financial strength which has been steadily built over
half a country.
We thank our clients for the confidence they have placed in us and shall
endeavor to always provide them the highest level of security and service.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
PROPERTY INSURANCE
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
OTHER INSURANCES
Our team will also be happy to design covers according to the need of clients.
DISCOUNT
Discounted rates in industrial risk protected by sprinklers, fire hydrants & buckets, we
offer special discounts.
MARINE INSURANCE
Importers & Exporters also industrials units importing raw material /or packaging
material, plant machinery and equipment for modernization and expension.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
OTHER INSURANCES?
We will be pleased to answer your queries regarding Marine Hull (Ocean Vessels or
vessels for break up), Barges, Travelers, Tugs, Pleasure Boats etc.
• Pleasure Craft Policy
• Sports Craft policy
SPECIFIED COVER:
Company also design tailor made insurance covers for import of plant and machinery
by offering Marine – cum Erection which not only cover the machinery being imported but
also cover the plant and its machinery during erection.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
MOTOR INSURANCE
In addition, for those wishing to have only restricted cover company also offer
insurance covering 3rd party liability cover only.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
BOND
ENGINEERING INSURANCE
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
To cover civil works. The policy offers wide coverage to property whilst under
construction. The policy is issued either in favour of principal or contractor and it can also
be jointly in favour of both parties. The policy is also extended to cover liability to third
parties.
The costly plant and machinery are insured on wider terms, they are being erected at
site. The policy is also extended to cover testing and maintenance period.
Here again, the policy can be issued jointly in favour of principal and contractor.
The policy is also extended to cover liability to third parties.
The contractors while working on project normally takes with them on site heavy
plant & equipment. We offer wide comprehensive cover to issue the same.
MACHINERY BREAKDOWN:
Plant & Machinery installed in industrial units are susceptible to damage. Company
provide wider coverage.
NJI is the pioneer and market leader in health insurance in Pakistan, which provides
flexible plans designed to meet the vital, but often underestimated, health needs of corporate
client. We provide high levels of protection against the financial consequences of basic
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
hospitalization needs through our Hospitalization Benefits, which is our cover. In addition,
we specialize in customizing additional optional benefits such as:
To benefit offers additional coverage against the expenses of certain dread disease
which cause heavy in-patient expenses. Such diseases may include heart attack, stroke,
kidney failure, cancer, AIDS, major organ transplant, etc.
This benefit also offers additional coverage for hospitalization expenses for all
eligible conditions under the policy. This benefit is very useful for expensive medical
treatment for the conditions covered under Comprehensive Dread Disease as well as knee or
hip replacement surgery.
Maternity expense benefits pays for medical expenses related to pregnancy and child
birth. All expenses directly or indirectly related to pregnancy, i.e. parental and postnatal
complications, cesarean sections etc. are paid as per entitlement of limit.
This section of the policy covers expense arising from sickness and injuries which do
not require hospitalization. Doctor’s fees, laboratory tests, costs of medicines and incidental
supplies, X-rays and examinations i.e. ECGs, ETTs, EEGs, etc are covered.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
Company have a network of panel hospitals countrywide, with credit facilities for our
clients. The benefits of such an arrangements are:
• No prior approval that provides out clients with the peace of mind, when carrying
our health cards / letters.
• No claims to be filled
• No administrative issues such as claim correspondence and documentation, etc.
• No cash flow problems.
In addition company have full time and knowledge medical doctors available round the clock
to provide guidance for the best possible medical care.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
MISCELLANEOUS INSURANCE
CASH INSURANCE:
The cash policy is designed to covers
• Cash in Safe
• Cash in Transit
• Cash in Counter
HOUSEHOLDER’S COMPREHENSIVE:
This policy is designed to provide cover to building of a bungalow or an apartment. It covers
the entire furniture, fixture, electronic items, carpets, etc.
NEON SIGN:
The advertisement neon sign are comprehensively covered against fire, damage and other
perils.
PLATE GLASS”
The expensive plate glass is covered on the comprehensive basis against accidental damage
and many other perils.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
OTHERS:
• Workman Comprehension
• General Public Liablity
• Product Liability
• Employer’s Residual Liability
• Golfer’s Policy
• Aviation Insurance
• Travel Insurance
• Baggage Insurance
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
SPECIALIZED INSURANCE:
COVER AVAILABLE AGAINST:
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
BRANCH NETWORK
SOUTHERN ZONE
CORPORATIVE DIVISION
COMMERCIAL UNIT – I
Mohammad Safdar, Senior Vice President
3rd Floor, Jubilee Insurance House,
1.1 Chundrigar Road, P.O. Box 4795, Karachi – 74000.
JODIA BAZAR
Muhammad Amin Haroon, Assistant Vice President
Room Nos. 105 – 107
1st Floor ismail Trade Centre,
Rambharti Street, Jodia Bazar Karachi,
Tel: (9221) 2422215 – 16 Fax: )9221) 2420451
SHAHRAH – E – FAISAL
Shehnaz Qasim, Joint Senior Vice President
Room No. 405, 4th Floor, Progressive Square,
Block 6, P.E.c. H.S., Shahrah-e-faisal ,
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
Karachi – 7500.
Tel: (9221) 4524147, 4391172
Fax: (9221) 2241731
SADDAR
Syed Tanzeem-Ul-Hassan, Vice President
1st Floor, POF Complex, 252-A,
Sarwar Shaheed Road,
Near Press Club, Karachi,
Tel: (9221) 2422927, 2416022-24
Fax: (9221) 2423627
HYDERABAD
Syed Wiqar Hyder Taqvi, Assistant Vice President
Sardar Manzil, Risala Road,
Saddar, Hyderabad – 71000
Tel: (92222) 781982
Fax) (92222) 729624
SUKKAR
Syed Jaffer Raza, Regional Manager
C-470/A-3, Queens Road,
P.O. Box 118, Sukkur – 65200
Tel: (9271) 5623851
Fax: (9271) 729624
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
BAHAWAL PUR
Sanaullah Chaudhary, Vice President
1st Floor, Shah Din Plaza
P.O. Box 113, Stadium Road, Farid Gate, Bahawalpur
Tel: (9262) 2877568
Fax: (9262) 2877868
BAHALW NAGAR
Rai Zahoor Ali Khan, Senior Manager
Khan Baba Road, Bahawal Nagar
LAHORE ZONE
Muhammad Ikram, Joint Executive Vice President
Main Branch (Sales UNIT I)
2nd Floor 1 Capt. Anwar Ul Haq Shaheed Road,
P.O. Box 68, Lahore – 54000
UAN: 111-654-111
Tel: (9242) 6283661-3
Fax: (9242) 6283660
MALL MANSION
SALES UNIT IV
Zahoor Ahmed Shaheen Senior Vice President
6- Maill Mansion,
Shahrah-e-Quaid-e-Azam, Lahore
Tel: (9242) 7211300-4
Fax: (9242) 7211305
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
COMMERCIAL UNIT – II
Ilyas Mohammad, Joint Senior Vice President
Ist Floor, 1 Capt. Anwar Ul Haq Shaheed Road
P.O. Box 368, Lahore – 54000
Tel: (9242) 6283664 – 8
Fax: (9242) 6365067
BANK SQUARE BRANCH
Muhammad Ashraf Tahir, Joint Senior Vice President
3rd Floor, H.M. House Plot No. 7
Bank Square, Lahore
Tel: (9242) 7312325
Fax: (9242) 73112389
FAISALABAD
Syed Hamid Hussain Zaidi, Vice President
P-68, Allama Iqbal Road, Faisalabad.
Tel: (9241) 2643020, 2640782
Fax: (9241) 2638780
SIALKOT
Rizwan Ul Haq, Branch Manager
Office No. 1, 2 8:3, 1st Floor,
Kashmir Centre, Court Road,
Sialkot
Tel: (9252) 4274631-2
Fax: (9252) 4274630
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
WORKING OF VARIOUS
DEPARTMENTS
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
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DEPARTMENT OF MANAGEMENT SCIENCE
NEW JUBILEE INSURANCE CO. LTD.
The accurate rating of risk can make the difference between profit and loss for an
insurer. Setting too low a rate for a particular type of motor insurance risk will result in a
loss for each policy written and particularly with the advent of computer quotation systems,
such ‘bargains’ will be unearthed, thus leading to a flood of similar non-profit-making
business.
Conversely, a higher rate than is warranted will lead to potentially profitable business
going to a cheaper competitor. The process whereby the market place will seed out and
exploit weaknesses in rating structures is known as “selection” and can destroy an account.
Rating is based upon experience. Firstly, there is the experience of the market as a whole
and secondly, and perhaps more importantly, the experience of the particular insurer.
In order to maximize the accuracy and therefore, the benefits of the latter it is
essential that data is held electronically in a format that will allow sophisticated analysis.
This facilitates the use of statistics to the rating of motor insurance risk and as a result,
insurer have been more willing to employ actuaries either in the underwriting department or,
at the very least, have an actuary who can provide input in the risk assessment process.
The underwriting department issues the policies after careful evaluation of associated
risks which comes for coverage; it is the duty of the Underwiting Department to examine the
risk and take all precautionary steps for evaluation before issuing policies / cover notes which
the company’s management has determined.
The top level management has established overall underwriting plans and strategies,
and the underwriting department is responsible to follow and develop specific guidelines to
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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.
First of all when any client who wants insurance policy to protect his stokes or any
property, the staff of the Underwriting Department is involved in this matter to feel
the hazards which are associated with the risks come for insured. There are two main
hazards physical and moral hazard that the underwriting department keeps in mind
when issuing any property. In physical hazards, it is important to remember that the
structural condition for the insured property. If a severe moral hazard exist, then no
rate is adequate to compensate for such hazards. Decisions of the under writing
department are of two types which are as follows: -
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Once the Underwriting Department has decided that a risk is acceptable, it finally
undertakes solid steps to evaluate all risks.
Finally after the completion of the assessment of risks, rating procedure and
warranties, the authorized insurance policies documents are issued to the particular
clients.
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CLAIMS DEPARTMENT
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The claims department must balance the necessity to provide a high degree of service
with the requirement to be satisfied that the claims presented are valid. Once their validity is
proven, then the next stage is to quantify accurately each claim.
CLAIM PROCESS
Claim process varies according to the: -
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Class of business
The type of cover
The amount of the claim
Whether it is a personal or commercial risk insured
CLAIM REVIEW
This involves the analysis of the claim by the insurer in the light of such things as:
The appropriateness of the amount claimed
The personal form e.g., whether the claim contradicts earlier statements
The exact terms of the policy, which are often, open the interpretation.
Legal requirements.
Market practice
Corporate claims philosophy
RESPONSE TO CLAIMANT
The initial response from the insurer to the insured may be only an acknowledgment
or a request for further information. Depending upon this further information the insurer
must then convey their claim decision which can be one of three choices.
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REINSURANCE DEPARTMENT
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ACCOUNTS DEPARTMENT
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INTRODUCTION
The accounts department has significance importance for every type of organization
whether that is trading or non-trading, manufacturing or providing services, etc.
The management NJI Company Limited has divided its accounts department in two
separate sections; each section is interrelated with each other, in order to facilitate day to day
functions of the department effectively and efficiently.
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PREPARATION OF VOUCHERS
LEDGER POSTING
Computer operator put log no and make posting in computer. Accounts of NJI Co.
Limited are computerized and ledgers are prepared in computer. After the preparation and
coding of voucher it is sent to computer operator for posting. A daily print out of all entries
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is checked to prove the accuracy. After checking the accuracy the master file is update and
posting is made to respective account ledger by the computer.
OTHER FUNCTIONS.
Accounts department also handled the payments of the staff salary, traveling
allowance and loans to staff, medical allowance, provident fund and other such kind of
payments. Bank reconciliation statement is prepared periodically in order to find out reasons
for disagreement between the bank passbook and the cashbook. Reasons due to which there
occurred discrepancies are as: uncollected or un credited cheques. Un-presented cheques
deposits in transit, amount received by bank or company’s behalf, amount paid by bank on
company’s behalf, error of transaction of figures, cheque deposited into bank but not entered
cashbook.
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WHAT IS AUDIT?
The concept of auditing is closely related with the concept of accountability, it is a practice
by which some subject of interest is examined by independent and professionally qualified
persons and a report is presented. Auditing is generally considered to be associated with
accounting and financial records only but these days the scope of auditing has broadened and
it covers nearly all the areas of business activity like financial statements, management
efficiency, quality of systems, evaluation of performance and many others. In this book,
however, we shall deal only with the audit of financial statements.
International Auditing Guidelines used to define Audit as:
OBJECTIVES OF AN AUDIT
PRIMARY OBJECTIVES:
• Fairness of Statements:
The purpose of auditing is to determine the fairness of statements.
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• Prescribed Laws:
There are various laws that given the working of many businesses such as
companies ordinance 1984 is for the working of companies.
• Accounting Policies:
There is a need to follow the accounting policies for preparing accounting
records.
• Expression of Opinion:
An audit enables the auditor to express an independent opinion on the
financial statements.
FINANCIAL ANALYSIS
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BALANCE SHEET
Balance sheet shows the financial position of company on a particular time. We have
used the balance sheet of last two years starting from 2005 to 2006.
Profit and loss account describes the total income and expenses incurred to obtain that
income. We have used profit and loss account of Adamjee Insurance Company Limited of
last five years starting from 2005 to 2006.
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Before the Insurance Ordinance 2005, all insurance companies can prepare
Consolidated Insurance Revenue Account under the Insurance Act 1938. But in the new
ordinance all the related balances of insurance accounts are directly shown in Profit and loss
account.
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PROFITABILITY RATIO
1. A sudden high increment in profit as compared to premium accumulation shows the
company’s strength. It is because of low expenses ratio while having larger pool of premium
than previous years. But in coming two years respective decline indicate low premiums and
high taxes.
2. Second profitability ratio is correspondingly shows the same trend. In first proceeding
year it jumps to high figure but afterwards declines due to low investment amounts and
premium pool while incurring high expenses.
1. Company’s profit after tax is not giving a satisfactory note at the end. It again had
come to the same point from were it has started. It all depends on your investment
profit folio and opportunities available in market at that time.
2. As usual a tremendous increase is there in first proceeding year but anyhow company
is still stable in this regard as compared to other relating factors.
3. In first year price earning ratio has decreased in contrary to other indicators but in
following terms it gives a good figure. This thing shows the company’s strategy of
investment appraisals and keen view of market strength.
4. In spite of all shortcomings and flaws in different market and business aspects,
company has maintained its cash divided to the same extent. It will surely intensify
the company’s image about corporate client sovereignty.
LIQUDITY RATIOS:
1. Due to low premium pool company still has enough liquid assets to meet the current
and future liabilities of its stock holders and other people.
2. Bad figures of profit and loss account are decreasing the opportunities of new paid up
capital. So level of paid up capital is decreasing as compared to last years.
3. Decreasing paid up capital is an alarming situation for the company. So it has to
increase equity to sustain its presence in the market.
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INTERPRETATION
Increase in net claim is 0.60% which shows the best risk management
practices and the better under writing practices adopted by the company. Increase in
the percentage of claim is much lower than the premium rate increase which leads to
more profits.
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With the increase in the amount of the premium, if commission expenses increase it is
positive sign.
The amount of the current and other accounts is less than preceding
year. But current maturing deposits are more and therefore the return on them is
significantly high than previous year: which is a source for indirect income.
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EXECUTIVE SUMMARY
I have undergone an internship program as a part of my study schedule. It was a six
week internship program. It was a great opportunity for me to work with such a prestigious
organization which will definitely aid me in developing professional skills and the right
attitude towards achieving my goals.
I worked for six weeks at New Jubilee Insurance Company Limited zonal office
Lahore, as in internee. I was placed in different departments of NJI Co. Ltd. And studied the
whole organization, but I got a chance to do some practical work in the Risk Management
Department, Underwriting Department, Claim Department and Accounts Department.
This helps me a lot in preparing the internship report and the analysis of the Company
and remarked about the company on the basis of my studies and analysis of the financial
statements and overall review of the company. Even though six weeks training is a very
short period to learn about any organization but I gain a lot of knowledge due to cooperative
staff. My working hours in New Jubilee Insurance Company Limited were, from 8: 00 am to
5:00 pm with one hour lunch break.
When I went to NJI Co. Ltd. at 28, June, 2010, the receptionist sent me to Admin
Manager, Mr. Zakir Ahmad who asked me some questions, then took me to Mr. Arif Bashir
(JEVP). I presented him the internship letter granted by the college. After asking some
questions he appointed Mr. Zakir Ahmad as my supervisor.
Mr. Zakir Ahmad gave me introduction about the company’s business and told me its
main functions. In the mean while Mr. Zakir Ahmad assigned me a task to visit different
departments. I started visiting different departments from the very next day and met with all
employees and observed their working. Then I was allocated in the following departments.
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Both these persons were very cooperative and assisted me all the time willingly. They
provide me the preliminary information about the risk and methods to inspect a risk properly
and told me how the risk management process is employed. What type of recommendations
is made according to the subject matter and type of loss exposure. Personally no any
industrial tour for inspection of the risk was made by me because no opportunity was
provided to me. I just studied the inspection and risk assessment reports prepared by my
trainers.
What type of general information is required by the risk manager, the questionnaire is
given in the Risk Management chapter show the clear picture the that.
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UNDERWRITING DEPARTMENT
This was the second department, which was allocated to me. In this department I
spent two weeks and was assisted by
All the persons were very cooperative and polite to me and never hesitated to provide me
any type of information inquired by me. They gave me the information about insurance
policies that company is offering and how these were prepared.
• Sorting of the cover notes, policy schedules and their file keeping.
• Premium calculations
• Endorsement making
• Client card
I spent two weeks in this department but I felt that this was very short time to lean
underwriting as rapid innovations in the products and the changing requirements of the
clients. This job was very interesting and I gained variety of work experience and knowledge
from my seniors.
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After working in undertaking department I was placed in claim department here I worked
under the supervision of
They were so kind to me and told me some of the important functions and operations of the
department and also told me the procedure of claims of each insurance policy that NJI Co.
Ltd. is offering to its clients.
In claim department I worked for one week and got a wonderful practical knowledge &
experience.
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ACCOUNTS DEPARTMENT
During my internship in this department I learned about the major functions of keeping
records associated with accounting for services.
Mr. Tariq Mahmood (AVP Accouts) was very cooperative person. He told me about annual
report, balance sheet, income statement and told me that the accounting department was
responsible to collect data and prepare financial statements. With his help I was able to do
financial analysis of NJI Co. Ltd. That was important to know the company’s exact financial
position.
• Sorting of vouchers.
• Filling of vouchers.
o Depreciation calculation
• Calculation of commission
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OBSERVATIONS
NJI Co. Ltd. has strong financial standings. It is the honor for NJI Co. Ltd. that
PACRA and JCR – VIS the leading rating agencies of Pakistan has given NJI Co.
Ltd. a long term rating of “AA” which is the one of the best for any insurance
company in Pakistan.
NJI Co. Ltd. has developed strong internship with its customers by understanding
their needs and treating them with respects, dignity and importance. The deriving
force behind its commitments and services is its focus on customers, incurring that it
not only meets, but also exceeds their expectations and this is why that NJI Co. Ltd. is
making progress by leaps and bounds.
The profits of NJI Co. Ltd. have grown considerably and also its market price per
share during the last few years and this trend is expected to continue in future.
Company’s claim and expense ratios have also dropped significantly during the last
years due to better underwriting practices.
Company has developed the good contacts with the foreign reinsurance companies of
good rating.
Company has brushier or forms for the clients to understand the different services that
company is providing.
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Company is targeting not only on financial institutions but also individual customers.
Company still not able to become the market leader, since after its establishment in
1953.
The agents of the company are not providing complete information to the customers
according to the tariff.
The higher net profitability shows the company’s efficiency in controlling its general
and administrative expenses.
The other major reason behind the higher level of net profitability is the large amount
of investment income received on the investment that company has made in various
organizations including government.
The flaw exists in the asset efficiency of the company. NJI is not efficient is utilizing
its asset in proper way to generate sufficient amount of net premiums.
In branch job rotation is uncommon. Normally employees are not rotated through all
departments during their job tenure which may cause boredom among employees.
The employees of the branch are not motivated to a great extent. After taking into
consideration all above factors how the employees can be motivated?
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Employees are less, should hire more people to lessen the over burden of workload.
They should hire more educated sales force to enhance the customer supplier
relationship.
The management of New Jubilee Insurance Company should pay concentration to the
insurance expenses and commission which are the major causes of low profitability.
Although company is efficient in controlling its general expenses but it is very
effective. Because it accounts for a few percentage of premiums volume and
insurance expenses is the major portion of the income statement after net claims.
More and more branches should be opened, particularly in the rural areas.
More and more focus should be given to enhance public image and goodwill through
superior customer services and interaction.
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For better productivity, the higher management must conduct proper seminars,
workshops for all the employees so that they can have up-to date knowledge and they
would be able to increase their skills.
The company should have all sorts of policies in well defined, clear cut written form
so as to be more specific and compare the performance with established goals. This
is very crucial in the modern competitive insurance scenario so as to remove all
deficiencies.
Today is the age of marketing. The more strong will be the marketing of a concern,
the more will be the business. So NJI should heavily emphasize on its marketing
policies. In this way, bank can also establish its creditability in the eyes of public and
can tell them about its offering. Advertisement should run on TV, and in newspapers.
I hope if all above mentioned areas will be taken care off them it will change things a lot and
will open new ways of prosperity and profitability for company.
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LEARNINGS AS AN INTERNEE
During the internship at the NEW JUBILEE INSURANCE LIMITED, I had learnt a
lot which other wise I would have not been able to experience it. Here at NEW JUBILEE
INSURANCE LIMITED, I really understand the sayings like “Seeing is believing (learning
wise)” and “The real world working is different from which we study in books.” I had also
done other internships at different level of my education and every time I had been able to
learn some thing new, so here at NEW JUBILEE INSURANCE LIMITED, I also came face
to face with new atmosphere and new working style, from which I learned many things.
Some of them are:
How to control the employees with both hot and cold temper
How to get work done from the employees within the prescribed time
How to satisfy or solve the query brought by the employees or the higher officials.
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CONCLUSION
At present there is no such organization in the world that is free from problems and
challenges. Every concern has to strive and struggle a lot to be more profitable and to get a
more competitive edge. Improvement and advancement is crucial with every step and with
the every minute passing. Especially insurance sector internationally and in Pakistan is
facing huge challenges and simultaneously getting huge opportunities to avail. The
competition is great in this regard. Only those insurance companies will succeeded which
will strive for best. But NJI Limited is making as much struggle and effort to be profitable.
Its relative ranking in the world in its country of origin and in Pakistan reveals the
facts that where it is standing. It is facing a lot of problems. Some problems are due to
changing political and economic structure but many problems are due to negligence and
inefficiency of management. Some of these problems are very minor but these are the areas
which make a difference in this competitive scenario. All these problems have been pointed
out later accompanied by related suggestions. All these matters should be seriously taken
care off. It will be so then it can be hoped that in future the relative ranking, its policies,
financial position and all other areas of NJI will improve and in future the picture will be
quite different.
There are some minor problems also these are the things which definitely make a
difference. Today, the foreign companies and local companies in Pakistan are introducing
new ideas, they providing their employees with extended facilities in order to keep their
morale high and to full motivate them. But these are the things which are lacking in NJI
Zonal Office. I think that if these problems will be solved, them employees will be more
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motivated, more efficient and more productive. Not only the employees but the general
public will also be attracted and profitability will definitely improve.
SWOT ANALYSIS
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STRENGTHS:
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WEAKNESS
Majority of people are not well aware about NJI Co. Ltd.’s product, so it needs
extensive advertisement
Employees discriminate customers on the basis of their status.
Improper human recourse management
Less Incentives to Lower level employees
The furniture available at the branch is not sufficient to occupy a larger number of
people at a time in the branch.
Limited area covered (only major cities are insured)
Lack of infrastructure
No segmentation of market.
NJI is slow to adjust the claim
Less advertisement
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OPPORTUNITIES
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THREATS
Change in government policies
The competition has become sever by the entrance of new companies.
The decrease in the purchasing power of people in the current economic situation
affecting the business activity speed.
Facing tough competition in market.
New business practices rules and regulations by SECP / Government sectors
High risk in insurance business
Many new insurance companies are entering into the market which are backed by
strong banks that can create problems for NJI.
Govt. allowed foreign insurance companies to start business in Pakistan that can also
affect the whole procedure.
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