tax profit increases by 60 per cent in 1998 over the last year
By SHABBIR H. KAZMI
August 02 - 08, 1999
Country's economy remained under great
strain during 1998 and consequently all industrial activities stayed extremely limited.
This adversely affected the volume of business in marine and fire insurance during the
year. While the motor insurance business in the country grew in terms of premium income,
the law and order situation and increasing incidents of car snatching and thefts, made the
risk more flighty and hence less attractive for the insurance companies. Despite
challenging circumstances, Askari General Insurance Company (AGIC) managed to boost up its
'before tax profit' by 60 per cent. This was mainly due to the "Askari Health'
program launched by the Company in February 1998. This scheme gained momentum in the year
and much better results are expected in years to come.
AGIC was listed at Karachi Stock Exchange
in 1996 with a paid-up capital of Rs 50 million. Army Welfare Trust (AWT) was the main
sponsor and holds 25 per cent shares of the Company. Other joint stock companies and
individuals own 37.6 per cent and 37.44 per cent shares respectively. As a result of
announcement of 15 per cent Bonus Shares at the end of 1998, the paid-up capital of the
Company has been raised to Rs 57.5 million.
AGIC, a new entrant in general insurance
business, has completed just three years of operation. Despite down turn of the economy,
since its commencement of operations, the Company has been registering constant and
significant increase in gross premium collected. During 1996 the gross premium earned was
Rs 37 million which doubled to Rs 74 million in 1997 and soared to Rs 108 million in 1998.
Investments of the Company have been
growing constantly. The investments of Rs 27 million in 1996 touched Rs 49.45 million in
1997 and exceeded Rs 60.47 million in 1998 a growth of 22 per cent in the year
under review over the previous year. In addition, an amount of Rs 15.6 million has been
invested in term of deposits with various banks in 1998 as against such a deposit of Rs 6
million for the last year. Return on investment also grew from Rs 8.65 million in 1997 to
Rs 11.5 million in 1998. Due to unstable capital market and depressed economic conditions,
the Company continued to focus its investment mainly in government securities and
certificates of investment to ensure maximum security of the funds and better return on
During the year, the Company continued to
enjoy the best possible reinsurance arrangements with world leaders. These include
Pakistan Insurance Corporation, Munich Reinsurance Co., of Germany, Assicurozioni Generali
of Dubai and ECO Reinsurance Pool. Sedgwick International of London also renewed their
reinsurance contract for health insurance for 1999.
Health Insurance concept is not very old
in Pakistan. The system has been through many ups and downs but its basic concept and idea
has remained unaltered. 'Askari Health' has been introduced to overcome financial
inability and to meet huge medical expenses of individuals. This is mainly a group medical
insurance cover. It is a comprehensive program that covers medical cost of out-patients,
hospitalization, surgeries, maternity treatment, dread diseases and specialized