Enviable past promising future

May 15 - May 21, 2006

It must be of great interest to read the 'Roadmap to the Future' stated in the Annual Report of EUF Life Assurance. It says, "Our way forward is facilitated by our wealth of expertise and experience and with our unswerving commitment to the ideals of Life Assurance. We are in a position where we can continuously offer improved products and services to a clientele that is increasingly quality conscious and demanding".

A closer look at the annual accounts of three companies sponsored by the Group shows that the overall growth in the business is the result of futuristic approach being followed by the companies aimed at offering the highest standard of services. One of the statements of Saifuddin Zoonkawala, Managing Director, EFU General Insurance, may appear outrageous to many. He often says, "The product we sell is CLAIM". On the face value one is amazed to read/listen to this. While most of the insurance companies make the best effort to bring down the amount of claim filed, EFU Group not only tries to pay the best, but it also takes pride in being prompt. This could be one of the reasons that while car insurance business of most of the insurance companies is shrinking, this business segment of EFU General is touching new highs. Two of its Divisions, SITE and Central touched one billion rupees premium milestone during the year 2005.

In order to understand future strategy of the Group it is necessary to understand how it views the future outlook and what the plans are to further expand its share in the insurance business of Pakistan. The outlook is certainly dependent on the overall level of economic activities, particularly new investment, yielding extra business. However, a lot depends on the strategy to meet the challenges. In order to achieve the basic objectives, the company aims at developing human resource as well as ensuring greater use of technology. The basic objective is to make EFU the first choice for all the stakeholders. This objective is achievable keeping in view more than five decade long enviable history of the Group.

In 1932 Eastern Federal Union Insurance Company (EFU) was established with the financial assistance from the Aga Khan III and the Nawab of Bhopal. Mr. Abdur Rehman Siddiqui became the founder chairman. The company was originally registered at Calcutta and operated in India (undivided) and Burma. In 1947, after the independence of Pakistan, EFU found a new home. After the relocation, EFU rapidly established itself as a progressive and innovative insurer. It gave the emerging insurance industry the leadership, the manpower and the drive to grow in a situation where at one time, three-fourths of insurance was held by foreign companies.

By 1961, EFU became the flag bearer of Pakistan's insurance industry in the global markets, and the largest life company in Afro-Asian countries (excluding Japan) under the leadership of late Roshen Ali Bhimjee. It remained the leader until 1972 when Life Assurance business in Pakistan was nationalized. Thereafter, EFU operated solely as a General Insurance Company, and was subsequently renamed EFU General Insurance Limited. Now EFU General is the second largest non-life insurance company in the country and the mother company of other insurance organizations of EFU Insurance Group.

Following deregulation, liberalization and privatization policy, in June 1990 the Government of Pakistan allowed the private sector to operate Life Assurance business. On 18 November 1992, EFU Life was granted the license to carry on life assurance business. It started operations in March 1994 with the launching of insurance products for the individuals. EFU entered the field of life assurance with the focus to address the changing needs of the Pakistanis. The company provides its policyholders solutions for the problems and rapidly changing financial environment by introducing innovative products.

In March 2000 the EFU Group entered into a joint venture with, Allianz Aktiengesellschaft (Allianz AG), a global leader in the insurance industry having presence in 70 markets across 5 continents for providing health insurance cover to the people of Pakistan. Allianz EFU Health Insurance is the first specialized health insurance provider in the country and aims to play a pivotal role in developing the health insurance market in Pakistan.

EFU Group companies are among the few Pakistani entities that are being run by professional management. Another unique feature of EFU is a voluntary review mechanism by professionals of international repute. EFU has taken Mr. Wolfram W. Karnowski, who retired at a very senior level from Munich Re, on its Board of Directors. It has appointed Mr. Michael J de H. Bell, a very eminent UK based actuary (retired from Wyatt Watsons and chairman of a UK based life company). EFU has the services of Mr. S.C. (Hamid) Subjally, who retired from a very senior position from Assicurazioni Generali, Dubai, UAE. The independent reviews by these professionals enable the group companies to keep abreast with the emerging challenges as well as ensuring adaptations of the best international practices. Yet strength of the EFU Group is a very close and long term relationship with its main reinsurer, 'Munich Re'. It is the largest reinsurance company in the world.

It is yet to be seen how the Group responds to the idea of Islamization of the insurance business. There is an enormous growing demand because till recently the banks offering Islamic banking services have been forced to resort to conventional insurance. Let us see who reaps the benefits of being the early bird.