Covers For Marine, Fire, Motor And Miscellaneous Risks

Nov 19 - 25, 2007

An Extra-ordinary General Meeting (EOGM) of the Adamjee Insurance is being held on November 22, in a bid to get shareholders' approval for the purchase of Rs 6.25 billion worth of shares of MCB Bank.

According to a spokesman of the company, Adamjee Insurance showed its intentions to buy further, and quite a large, stake in the MCB Bank. Adamjee Insurance along with First Women Bank held 7.19 percent in MCB Bank as of December 31, 2006. MCB Bank held 29.375 percent shares in Adamjee Insurance on the same date, says a report of Capital One Equities.

According to sources in the corporate sector, the share purchase would improve the portfolio of Adamjee Insurance as well as its investment income. Investment income is one of the two major sources of income for insurance companies. The other, obviously, is premium.

Analysts told PAGE that Adamjee Insurance would benefit from this acquisition through dividend income and capital gains. "Its portfolio will build up and profitability will improve because the group owning both the insurance company and the bank knows best what is the real worth of MCB Bank and what are its plans". This move will improve the balance sheet of Adamjee Insurance.

A spokesman of Adamjee Insurance Company Ltd., said that the company has been investing its resources on providing general insurance covers for marine, fire, motor and miscellaneous risks. In recent years, the company has been a pioneer in launching new types of insurance policies which are: Home Insurance, Kidnap & Ransom, Personal Accident, Medical Insurance & various types of covers for Power Generation/Infrastructure Projects. Today, the company is the largest insurance company in Pakistan and operates through its 84 branches all over Pakistan. It is the leader amongst 52 other general insurance companies and commands a 40% market share, as well as a reputation of being one of the most prompt and efficient settlers of claims. International offices include 6 branches in Dubai, Abu Dhabi, Sharjah, Jeddah, Dammam and London. The international operations contribute over 20% of the total premiums earned and 25% of the net earnings of the company.

The company has broken all records by winning 'The KSE Top 25 Companies Award' and 'The Export Trophy Award' consecutively every year since the mid 80's. Recently, the company has been awarded "AA-" claims paying ability by DUFF's & PHILLIPS Credit rating Company of Chicago, United States of America, the spokesman added.

Corporate Responsibility: To continue with philanthropic activities of Sir Adamjee, the Adamjee Family formed the Adamjee Foundation in 1962. The Foundation's objective is to help the needy and the destitute by providing education, healthcare, and financial relief. In the past, it has established various Institutions namely, Adamjee Science College, Adamjee Boarding House, Adamjee Auditorium and the Retina Eye Clinic. It has also provided financial and other contributions to various large institutions like The Cardiovascular Hospital, Jinnah PostGraduate and Medical Centre, the Aga Khan Hospital & Liaquat Medical Hospital etc.

At present, the Foundation is operating the Lady Mariam Adamjee Girls School in Adamjee Nagar, Karachi. The objective of the school is to provide education to girls, which is severely lacking in the Pakistani society even till today. The institution is housed in a complex spread over 3 acres and enrolls 600 students in its primary and secondary programs. To provide quality education the school avails modern facilities like, fully equipped laboratory, computer classrooms, library, auditorium and a recreational ground. In addition to this, other educational and recreational institutions have been named in honor of Sir Adamjee Haji Dawood i.e. the Adamjee Public School and the Adamjee Memorial Centre in Karachi. The 'Sir Adamjee Merit Award' is distributed annually to students who secured Grade 'A' from the Board of Secondary and Intermediate Education, Karachi. The Adamjee Foundation generates its income from its vast investments in the Adamjee Group and other Companies

"We are now in the domain of micro insurance which is not easy and perhaps impossible to run successfully over a period by insurance tool on stand-alone basis", analysts said. Life insurance, which is long term and have reached to many villages of the country through their field force have created some mistrust towards insurance in the villagers as after paying initial or few follow-up premiums the insured either forgets or could not pay the installments and the policy lapses. If a claim is then made on the lapsed policy, he gets nothing. This had created distrust of insurance in rural areas. So when ever the idea of venturing into the rural areas for micro insurance was taken up these factors made it unrealizable, they added.



The Crop Insurance Scheme (CIS) launched by the Bank of Punjab (BoP) in the year 2004 was running successfully and paying dividend to the insurers.

A spokesman of the BoP told PAGE that the CIS is aimed at compensating the farming community from loss of their crops caused by unfavourable weather conditions and natural calamities. Under the scheme, if any natural calamities like flood, drought, etc hit a district, it would be declared a 'disaster area' and 50-70pc payment along with relief in agricultural credit and exemption from the provincial taxes would be provided to the farmers. Under this scheme farmers with 1-50 acres of land would be compensated 50 to 70 percent of the crop value in the eventuality of crop loss caused by natural calamity while their entire loan would be covered. Moreover, the scheme also include life insurance for one-year with the claim of Rs 500,000, the spokesman added. To avail the crop insurance scheme, the BoP is charging additional two-percent of the loan, on the top of eight percent mark-up rate on the loan, he added. The insurance scheme, first of its kind in the country, is benefiting 98 percent of farmers, especially the poor ones.

By introducing crop insurance scheme, the Bank of Punjab (BoP) has done a great service to poor farmers, as it is providing them a safeguard against loss of crop caused by natural calamity, analysts said.

Before the introduction of scheme, the farmers were demanding security of their crops for the last many years, and after a thorough deliberations the government came up with crop insurance scheme. Crop insurance scheme is also made available in other parts of the country through the BoP's branches established there, he added.