Interview with Mr Hasanali Abdullah — Managing Director, EFU General Insurance Ltd and Chairman, Insurance Association of Pakistan
Mr Hasanali Abdullah is Chartered Accountant and Certified Director from Pakistan Institute of Corporate Governance (PICG). He has been associated with EFU General Insurance Limited since 1979 and is Managing Director & Chief Executive of the Company since 2011. He is also a Director of EFU Life Assurance Ltd, Allianz EFU Health Insurance Ltd, EFU Services (Private) Ltd, Tourism Promotion Services (Pakistan) Limited (owners of Serena Hotels), Honorary Treasurer of Aga Khan Hospital & Medical College Foundation, Member National Committee of Aga Khan University Foundation (Pakistan Branch) Geneva, Chairman of Insurance Association of Pakistan and Director of Institute of Financial Markets of Pakistan. He has served on the Boards, Council and Committees of various Aga Khan Development Network institutions from 1976 to 2002. He has been Director of PICG in 2011, Chairman of Insurance Association of Pakistan for the year 2008 and 2010-11, Executive Committee Member of Federation of Pakistan Chambers of Commerce and Industry for 2011 and Chairman of Pakistan Insurance Institute 2014-15.
ABOUT EFU GENERAL INSURANCE LTD: EFU is the largest insurance group in the country. The group comprises of EFU General Insurance Limited, EFU Life Assurance Limited and Allianz EFU Health Insurance Limited. EFU General was incorporated on September 2, 1932. The Company provides a full range of insurance services to commercial, industrial and individual clients. The product portfolio includes: – Fire and Property Damage – Marine, Aviation and Transport – Motor – Miscellaneous – Value Added Services – Takaful – EFU is one of the few Pakistani organizations run totally by professional management and highly motivated field force. – Policies accepted by all institutions in the country. – Rating: Insurer Financial Strength AA+, Outlook: Stable (Rating Agencies: JCR-VIS and PACRA). – Client-base comprises of many leading business houses and multinational companies. – EFU gave the emerging insurance industry the leadership, the manpower and the drive needed to grow. The most important aspect of our operation is that we have created a separate Risk Management Team and an Engineering Group who work closely with clients to identify various risk exposures and then provide specific insurance. This helps in loss prevention and reducing the cost of premium. Our market-driven team of inspired and technically qualified insurance personnel, specializing in civil, mechanical, metallurgy, electronics and having overseas linkages, is on-call for necessary professional advice at all times. It is our policy not only to provide protection and risk reduction but help clients develop preventive capabilities to avert major perils and calamities. Over the years we have developed a full range of insurance services for large infrastructure projects including the areas of oil/gas exploration field. We are fully equipped with technical, marketing and managerial skills supported by reinsurance arrangements with a number of firms of international repute to cater for all classes of specialized insurance and provide customer service of the highest quality.
PAGE: YOUR VIEWS ON THE PROGRESS OF INSURANCE IN PAKISTAN:
HASANALI ABDULLAH: The industry has been ever willing to assist its clientele whenever a misfortune has occurred whether at micro or macro level. Industry’s contribution in terms of revenue generation, claim payments to policyholders, deposition of taxes in government exchequer and provision of employment for the last five years are as under:
|Premium written (PKR billion)||253||238||194||158||140||983|
|Claims paid (PKR billion)||91||80||74||63||55||363|
|Tax contributions to government exchequer (PKR billion)||15.64||13.61||12.14||9.72||9.69||60.85|
|Number of employees in insurance companies||17,288||16,606||15,536||10,200||10,000||–|
There are 38 member companies in the Insurance Association of Pakistan. During 2016 Insurance Premium collected amounted to PKR 253 billion, the total collection over the last five years was PKR 983 billion. The claims paid in 2016 were of PKR 91 billion and during the last 5 years claims of PKR 363 billion were made. During 2016, the insurance sector paid taxes to the government of PKR 15.64 billion and during past 5 years PKR 60.58 billion was paid. This helped greatly in the social development of Pakistan.
PAGE: KINDLY TELL US ABOUT THE EXISTING AND UPCOMING INSURANCE PRODUCTS:
HASANALI ABDULLAH: Insurance industry of Pakistan is providing a full range of traditional insurance products and services like Property, Marine/Aviation, Motor and other miscellaneous products. Globally, the technology is going to change very fast, insurance industry will have to deal with the resultant emerging risks such as cyber-crime and driverless cars etc.
PAGE: HOW DO YOU SEE THE COMPETITION BETWEEN CONVENTIONAL AND ISLAMIC INSURANCE?
HASANALI ABDULLAH: Starting in the 1970s and increasingly in the 1990s, Islamic countries as well as other countries with a significant Muslim population have encouraged the provision of financial services, including insurance, under Islamic principles, As a result, a number of Islamic insurance companies, called ‘Takaful’ insurers, have been established to provide coverage. Takaful Operations are growing. Further growth in Takaful market is expected in the coming years as now many conventional insurance companies have started Window Takaful operations. The customers of both of Takaful and conventional insurance are satisfied with the facilities provided to them.
PAGE: YOUR VIEWS ON FUTURE OF INSURANCE IN PAKISTAN:
HASANALI ABDULLAH: Insurance penetration can increase with increased documentation of the economy. Insurance industry has proposed to government to introduce no fault compensation payment upon accidental death throughout Pakistan, which could save government from ad hoc payments in case of major accidents where number of live are lost. Tax at 1% which is deducted in advance from non-filer-policy holders of life Insurance Companies on the life insurance premium should be exempted as this is resulting in the diversion of funds from life insurance companies. Taxes on personal life insurance should be removed to minimize the cost of protection for the citizens of Pakistan. Health Insurance Scheme should be made compulsory both in public and private sectors to increase insurance penetration and for providing health coverage to the working class of Pakistan. Tax rebate should be provided to individuals upon purchase of health insurance, home insurance, travel insurance etc. Tax for insurance companies on all sources of income (including dividend and capital gain) is 31% as compared to other industries which pay tax at much lower rates on capital gain and dividend income. The insurance companies should be provided level playing field.