PART-1

askari general Insurance Co.Ltd

PART-1Information About Insurance.

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.

Types of InsuranceThere are two types of insurance1) Life insurance 2) Non life insuranceLife 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 insuranceNon 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 insuranceGeneral 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 insuranceHealth 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 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 sinkageThe 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 (modern-day 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, 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. 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 PakistanThe 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 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 LivesThe 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 -1SLIC: Growth in Policies in Force: Individual LivesYear Number (Million)Percentage (%)

Base Index Rolling Index

20052.04112106

20041.93106104

20031.85102103

20021.8009999

20011.81100100

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 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 -2SLIC : Growth in Policies in Force: Group LivesYearNumber (Million)Percentage (%)

Base IndexRolling Index

20053.7311396

20043.90118106

20033.63111107

20023.44104104

20013.30100100

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.

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-4Departments of CompanyOrganizations Hierarchy

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

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.

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 Underwriting DepartmentThe 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

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.

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 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

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 DepartmentThe 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 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 DepartmentSilver 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

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 DepartmentAdministration 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

Finance & Accounts DepartmentIntroductionThe 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.

Departments Hierarchy

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.

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 SectionSome of the important functions of the accounts section are described as follows.

Preparation of vouchersIn 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

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 VouchersThese 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

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.Part-6Internship 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. 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

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 CareerInternship 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

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.Part-7Findings & 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.

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.

RISK

SHARING

TRANSFER

Board of Directors

Chairman

MIS Manager

Human Resource Manager

Manager Administration

Deputy Manager Reinsurance

Managing Director &

Chief Executive

Chief Internal Auditor

General Manager

Joint General Manager

Manager Marketing & Development

Senior Manager Underwriting

Deputy Manager

Claim

Manager Accounts & Finance

Manager Shares & Investment

Manager

Deputy Manager

Assistant Manager

Assistant Manager

Senior Manager

Assistant Manager

Assistant

Assistant

Assistant

Assistant

Assistant Manager

Managing Director &

Chief Executive

General Manager

Deputy Manager

Assistant Manager

Assistant

Assistant

Manager

Assistant

Managing Director &

Chief Executive

Chief Internal Auditor

Chief Manager

Assistant Manager

Managing Director &

Chief Executive

Deputy Manager

Manager

Dispatcher / Assistant

Junior Officer

Driver

2

Security Guards

2

Telephone Operator

Driver

2

Driver

2

Assistant

Assistant

Assistant

Assistant Manager

Assistant Manager

Chief Manager

Chief Financial Manager

Hailey College of Banking and Finance