EFU & Adamjee at a glance

June 25 - July 01, 2007

In 1992, the government permitted the private sector to start underwriting life insurance. EFU was the first to take advantage and restarted EFU life Insurance Company to position itself as the largest private sector life insurers in Pakistan. EFU enjoys a market share of more than 50 percent of the private sector life premiums income. The company is also the first life insurance company in the country to be awarded the ISO 9001-2000 certification. True to its tradition of innovation, it was the first company to have introduced Unit Link Life Insurance products for the first time in the country.

In addition to its existing activities, EFU has signed a joint venture agreement with Allianz of Germany to provide health insurance facility to the people in general. This joint venture is unique in its nature as Allianz EFU Health Insurance Company is also the first specialized medical insurance company in Pakistan.

EFU General continued to progress rapidly, the share capital of the company increased from Rs2.5 million in 1971 to Rs500 million in 2005 while its premium rose from Rs22 crore in 1990 to Rs8 billion in 2006. The total premium of the Group reached Rs12 billion at the end of 2006.

According to Saifuddin N. Zoomkawala, Managing director EFU General Insurance Ltd, EFU is the only insurance group in Pakistan to provide a full range of insurance services i.e. life, health and general. EFU is now marches ahead with confidence to set new standards of quality services encompassing all modern concepts of customer satisfaction with state of the art technology support Zoomkawala said.

Zoomkawala went on to say that the next 75 years of progress in the insurance industry will present countless challenges to the insurance sector but at the same time the professional managers of EFU who would be managing the company then will stand as successful as the company today and they would celebrate their achievements with greater zeal, enthusiasm and rejoicings, he observed with a great confidence.


It may be recalled that when EFU was at its peak of progress the country broke into two pieces in December 1971 resulting in huge loss of business. If this was not enough, within three months EFU got another jolt in the shape of Nationalization of Life Insurance Business by the then government in March 1972. All its assets were taken over and were left with only General Insurance Business.

Zoomkawala recalled that to make things even worse was that a substantial part of the company was nationalized and automatically the company lost this business to National Insurance Corporation. However, despite all odds and big jolts, EFU was strong enough to survive and carried on its general business to regain its glorious past.


Zoomkawala peeping into the past said that the pioneers of the company under the leadership of Abdul Rehman Siddiqui started the company from Calcutta with caution and prudence and built up a cadre of Insurance Professionals. The company expanded not only to different parts of India but also set up offices in London, Ceylon and Palestine.

With the inception of Pakistan, EFU migrated to Pakistan and established its registered office in Chittagong and head office in Karachi. Mr. A.R Siddiqui who was in charge of EFU operations was appointed Governor of East Pakistan and Mr. K.F. Haider assumed the responsibility of running the company. EFU was amongst the first seven companies were listed on Karachi stock Exchange in 1949, Zoomkawala mentioned with a sense of pride to have many firsts to the credit of his company.


Adamjee Insurance (AICL) has also launched its first retail product 'Faaslay Asaan', a worldwide travel insurance plan. The product is being offered through 'Akbar Group' which has a wide network of General Sales Agents (GSAs) in airline business.

However, so far Adamjee's retail business, miscellaneous, representation is only 12% on the basis of 2005 gross premium

Faaslay Asaan is a product of Adamjee's future retail mix. Adjamjee has already communicated its plan to launch 12-13 retail products in years to come. In our opinion, this timely entry in an untapped retail market would provide first mover advantage to the company and is expected to act as a catalyst to maintain the ongoing growth momentum of the company.


Non life insurance in Pakistan represents only 0.43% of GDP, which is far below from world average of 3.43%. If we look at the retail business then this segment, represented by miscellaneous, depicts only 9% of total insurance business on the basis of 2005 net premium.

This calculation is based on our sample of 24 non life insurance companies which occupies more than 90% of the sector on the basis of 2005 gross premium. If motor business is also added, the representation of these two segments will reach to 62% in net premium whereas in India these two segments have a representation of 80% on the basis of 2005-06 net premium.

Moreover, the use of distribution channels other than branches of insurance companies is almost rare in Pakistan. Only motor insurance, though not a typical retail business, may be termed as a product where banking channel is widely used. Other than this, the use of intermediaries and bancassurance partners in distribution is not in practice, which we think is natural considering the non-existence of the retail business.