My overall experience of preparing this report was a knowledgeable

journey. I learn a lot about the functions of Askari General Insurance

Company. Apart from this, by actually conducting this report, I also
learnt practical application of what I have been studying in overall
M.B.A.

For completing this project I required the annual reports (3 years) of

not only Askari General Insurance company, but also of some other
insurance companies which are benchmark at this time in the industry
in order to estimate the industrial profile, business processes and
SWOT analysis. I got my required data from websites of insurance
companies and from newspapers.

While conducting this report I faced some problems in getting the data
as at websites data is not managed very well. The knowledge of what I
have studied in MBA also came in handy. Once every thing was found
out it got very interesting.
 “I dedicate this work of mine to

my Teachers, My Parents and to

all My Friends, who truly help and

guide me in completing this

project. “
I am grateful to Allah almighty, for enabling me to fulfill this tiring, but
interesting job for the completion of my report.

The long and arduous task of developing this report was made easier by the help
and guidance of my teachers Dr.Khwaja Amjad Saeed, Mr. Irshad and as well
as Mr. Fida Hussain Bukhari.The whole practice of collecting material for the
report compiling and composing was enjoyable.

I would not be going justice in presenting this report without mentioning the
people around us who have been inextricably related with the completion of this
report

I extend my deep gratitude and heartiest thanks to my teachers and Coordinator

for preparing this report.
Internship experience is very important and helpful before anyone goes looking for a job.
Employers want people who have experience. Internship gives students the opportunity to
grow, academically and personally. When anyone initially starts out he is going to be
doing the menial repetitive task that every new person had to do. However this is not
necessarily negative as it teaches the person responsibility at the smallest level.

Askari Insurance Company has 19 branches in Pakistan in 15 Cities and main objective is
to provide its customers with safe, secure and reliable service through wide range of
products. The report covers all the product information provided by the Askari insurance
company: Profile of Askari insurance Company, in this regard I tried to given the
information of Askari insurance company. . In the profile of the company I am trying to
giving all the possible available information of the Askari Insurance Company. Company
business process, in this section I tried to elaborate all the functions that are performed by
each department of Askari Insurance company and as well as discuss about the key
products of the Askari insurance Company that are highly involved in the progress of
company. SWOT analysis of company, in the section, I humbly stated the strength and
weakness and as well as opportunity and threats of the organization. It very difficult to
pin out weakness of the AGICO but I tried our level best in this regard. Problems and
recommendations, in this portion of the report I discuss about some problems and as well
as give some suggestions and recommendations to over come these problems. It might be
helpful for the AGICO. I believe that this report will provide some very important
information regarding my departments (Claim department, Underwriting department,
Marketing department and Accounts). I also describe my experiences in these
departments and I am sure it would be helpful for all. Underwriting and other is claim
department. That’s why, Branch Manager to be found having more consideration on these
department and personally to look after very carefully. The SWOT analysis is covered in
the report to show the standing of the company in the recent market.
 1 Adamjee Ins. 16 Ittefaq Gen.
2 American Life 17 Metro Life Assurance
3 Asia Ins. 18 New Jubilee Life
4 Askari General Ins. 19 New Jubilee Ins.
5 Atlas Ins. 20 PICIC Ins.
6 Beema Pakistan 21 Pak Gen. Ins.
7 Business Ins. 22 Pak Reinsurance
8 Central Ins. 23 Premier Ins.
9 Century Ins. 24 Progressive Ins.
10 Cres. Star Ins. 25 Reliance Ins.
11 EFU General Ins. 26 Shaheen Ins.
12 EFU Life Assurance 27 Silver Star Ins.
13 East West Ins. 28 Union Ins.
14 Habib Insurance 29 United Ins.
15 IGI Insurance 30 Universal Ins.
 Introduction of Askari General
Insurance Company

Askari general insurance co. ltd (Agico), established in October 1995, was
sponsored by Army Welfare Trust (AWT), Askari Commercial Bank ltd (ACBL) and
Askari Leasing Ltd (ALL). It is a public limited company, listed on all three Stock
Exchanges of Pakistan i.e. Karachi, Lahore and Islamabad. The Company provides
general insurance products and services to all sectors of the market.

The company has earned itself a reputable place amongst top players of insurance
industry. Agico's financial strength and rapid growth has been achieved through its
policy of retaining and reinvesting a large part of the profit to strengthen the Paid Up
Capital and Reserves. The company's financial position provides security to the clients

and ensures progressive return to the stakeholders.

Agico transacts all classes of non-life insurance business. It holds a strong position in
Health Insurance and is the leader in it's expansion. The company has a large base of
prestigious Pakistani and multinational clients being served through a network of 16

Branches spread all over the country. Human resource is the main stay of the
company and is imposing for its highly qualified and entrusted staff. The
company is committed to create insurance awareness and promote insurance
culture through its highly motivated and dedicated team of professionals.
 VISION

The Vision of Askari general insurance company is to be

amongst the leading insurance companies of the country

with the clear perception of upholding the principles of

corporate governance and making Agico a profitable and

growth oriented insurance company while creating

insurance awareness and culture

 MISSION

The Mission of Askari insurance Company is to become a

leading company by providing client friendly services

through highly motivated team of dedicated professionals

and ensuring progressive return to the stakeholders

PHILOSOPHY

1. Excellence in Service

2. Quality Performance

3. Product Innovations
 Agico believes in the phrase “customer comes first”. AGICO
objective is to please their customers by fulfilling the insurance
needs as best as possible. They believe in placing the client at the
center of business and all of the products and services.
 Service excellence is one of the objectives of AGICO.
 AGICO strives continually on the development of new areas of
activities to distinguish itself in the market place along with
traditional insurance Companies activities.
 AGICO objective is the complete automation and computerization of
all of its insurance activities.
 AGICO Training and Development program of its employees is
aimed at developing skills of its employees. It makes positive
contribution to the service culture of the insurance system as a
whole.

Under the strong leadership and management of Lt.General(retd) Imtiaz Hussain

Askari Insurance company has achieved success in a short period of time. During the
last few years it has assumed a brand new identity plied with a spurred vision. The
board and management of the Askari insurance company have implemented strategies
and policies to carve a distinct position for the Askari Insurance Company in the
market place. The Askari Group, a paragon of strength has played a pivotal role in
helping the Insurance Company.

Chairman

Lt. Gen. (Retd) Imtiaz Hussain

Directors
Maj.Gen.(Retd.)Saeed Ahmad Khan
Brig. (Retd) Javed Qayum
Mr.Abdul Waheed
Brig. (Retd).Mushtaq Ahmed Malik
Syed Suhail Ahmed Rizvi
Mr. Abdul Hai Mahmood Bhaimia
Audit Committee
Mr. Abdul Waheed
Chairman
Brig. (Retd) Mushtaq Ahmad Malik
Member
Mr. Syed Suhail Ahmed Rizvi
Member

Auditors

KPMG Taseer Hadi & Co.

Chartered Accountants

Legal Advisor
Mr. Farrukh Karim Qureshi

Bankers
Askari Commercial Bank Limited
Arif Habib Bank Ltd.
 Habib Bank Ltd.
Standard Chartered Bank Ltd.
Soneri Bank Ltd.

Registrar and Share Transfer Office

THK Associates (Private) Limited,

Ground Floor, State Life Building-3
Dr.Ziauddin Ahmed Road, Karachi
Tel: 111-000-322
Fax: 021 - 5655595

Registered Office/Head Office

4th Floor, AWT Plaza, The Mall, Rawalpindi, Pakistan
Tel: 051 - 9272425 - 7
Fax: 051 - 9272424
Web Site: www.agico.com.pk
e-mail: agicoho@agico.com.pk

President & Chief Executive

Mr. Mohammad Hussain Hirji

Executive Vice Presidents (Marketing)

Syed Hassan Nadeem

Rana Shahbaz Ahmed

Senior Vice Presidents

Mr. Muhammad Afzal (H.O)

Engr. Ehtesham Malik (Engineering)
Sheikh Abdul Qayyum (Claims)
Mr. Muhammad Iqbal (Reinsurance)
Mr. Waseemullah (Company Secretary/CFO)
Mr.Najam Irshad

Senior Vice Presidents (Marketing)

Ch. Shams-ul-Haq
Mr. Shah Saud Mirza
Mr. Sarfraz Ahmed Tarrar

Vice Presidents

Maj. (Retd) Muhammad Ajmal Khan

Mr. Ali Munem Shamsi
Mr. Sohail Khalid
Mr.Jamil Ahmed (C.A)

Vice Presidents (Marketing)

Mr. Mubashir-ul-Hassan
Mr. Tahir-ul-Haq
Sh.Muhammad Hanif
Sh.Abdul Wahab

Assistant Vice Presidents

Mr. Ghulam Ashgar

Mr. Waqas Ahmed

Mr. Sohail Younas

Assistant Vice Presidents (Marketing)

Mr.Ikram Zai
Mr.Moeenuddin

Managers
Mr. Tazeem Hussain
Mr. Gulzar Hussain Shah
Syed.Imran Abid (I.A)
Mr.Noor Afsar
Mr.Gulfraz Anis
Mr. Muhammad Ali Soomro
Mr.Qamar Ikram Sheikh
Mr.Shahid Hussain
Mrs.Tallat Raza
Mrs.Samina Khan
Mr.Shahid Hussain
Mr.Tahir Mahmood
Mr.Faisal Ejaz
Mr.Taqiuddin
Islamabad

11 West, Jinnah Avenue, Blue Area, Islamabad.

Tel: (051)2279565, 2270471-2,
Fax :( 051)2279566
Email: agicoisb@agico.com.pk

Rawalpindi

National Business Center, Murree Road, Rawalpindi.

Tel: (051)9290489, 9290499
Fax: (051)9290479
Email: agicorwp@agico.com.pk

Jhelum

1st Floor, Soldier Plaza, Civil Lines, Jhelum.

Tel: (0544)9270339
Fax: (0544)9270374
Email:agicojlm@agico.com.pk

Sialkot

1st Floor, Oberoi Cooperative Building, Paris Road, Sialkot.

Tel: (052)4582381
Fax :( 052)4582382
Email:agicoslt@agico.com.pk

Gujranwala

1st floor, Al-Azahar Plaza opp.Iqbal high school Ghala

Mandi,G.T Road,Gujranwala.
Tel: (0431)3856324, 3734326
Fax :( 0431)3856325
Email:agicogrw@agico.com.pk

Lahore

3rd Floor, Al Malik Plaza, 19 Davis Road, Lahore.

Tel: (042)6308633-4
Fax: (042)6308635
Email:agicolhr@agico.com.pk

Faisalabad

2nd Floor, Platinium Centre, Kotwali Road, Faisalabad.

Tel: (041)645802-4
Fax :( 041)645801
Email: agicofsd@agico.com.pk

Multan

2nd Floor, Jalil center, Abdali Road, Multan.

Tel: (061)547842
Fax :( 061)547862
Email: agicomtn@agico.com.pk

Hyderabad

1st Floor, Gul Centre, Thandi Sarark, Hyderabad

Tel: (0222)729689
Fax :( 0222)783976
Email:agicohyd@agico.com.pk
Karachi (021)

3rd floor ,AWT Plaza

I.I Chundrigar Road, Karachi.
Ph:2273513-5,Fax:2214332
e-mail: agicokch2@agico.com.pk

Quetta (081)

1st Floor,Taj Center,

Jinnah Road ,Quetta.
Ph: 28379822,Fax :2837944
e-mail : agicoqta@agico.com.pk

Sargodha (0483)

43-44,Rehman business Center,

2nd Floor, University Road, Sargodha.
Ph: 3768559-61, Fax :3768579
e-mail : agicosgd@agico.com.pk
Abbotabad (0992)

Room -10,Silk Plaza,

Mansehra Road , Abbbotabad.
Ph: 342439
e-mail : agicokabt@agico.com.pk

Peshawar (091)

6th Floor,State Life Building,

The Mall,Peshawar Cantt.
Ph: 5284768,5272058, Fax :5284769
e-mail : agicopsc@agico.com.pk

Bahawal Pur (0622)

2nd Floor ,Shahab Plaza,

Chowk one unit,Bahawal Pur.
Ph: 284201, Fax :284203
e-mail : agicobwp@agico.com.pk
Web sites
 www.Agico.com.pk

 www.google.com

 www.efuinsurance.com

News papers
 INSURANCE JOURNAL
 www.dawn.com

 www.nation.com.pk

Books
 Principals of Insurance(ACII)
 Claim Management(ACII)
 Marketing(ACII)
 Motor Insurance(ACII)
 PERSONNEL HIERARCHY IN AGICO
BGP BRANCH

Branch Manager:

NAME MR. TAHIR AHMED

DESIGNATION BRANCH MANAGER OF LHR
QUALIFICATION M.A Economics, MBA.
EXPERIENCE 10 YEARS
ASSIGNMENTS TO LOOK AFTER THE BRANCH OVERALL PROGRESS
AND TO MEET THE ASSIGNING SET TARGETS.

Claim Department:

NAME Mr. Ramzan

DESIGNATION CLAIM MANAGER
QUALIFICATION M.B.A
EXPERIENCE 3YEARS
ASSIGNMENTS TO HANDLE THE CLAIM DEPARTMENT AND
IDENTIFY THE VALIDITY OF LARGE CLAIMS

ACCOUNT DEPARTMENT:
 NAME MR. RAZA
DESIGNATION Account Officer
QUALIFICATION M.B.A.
EXPERIENCE 4 YEAR
ASSIGNMENTS MANAGE BRANCH ACCOUNTS

UNDERWRITING DEPARTMENT:

NAME MR.Nasir
DESIGNATION UNDERWRITER
QUALIFICATION M.B.A
EXPERIENCE 4 YEAR
ASSIGNMENTS ISSUE INSURANCE POLICIES

MARKETING DEPARTMENT:

Marketing Manager:

NAME MR. AZHAR MURAD

DESIGNATION OPERATION OFFICER
QUALIFICATION M.COM
EXPERIENCE 35 Years
ASSIGNMENTS HANDLE THE MARKETING DEPARTMENT AND
 ACHIEE SET TARGET.

Vice Marketing Manager:

NAME MR. FAROZ

DESIGNATION ASSISTANT MARKETING MANAGER
QUALIFICATION M.B.A
EXPERIENCE 8 Years
ASSIGNMENTS TO ACHIEVE SET TARGET

ASKARI GENERAL INSURANCE

COMPANY DEVIS ROAD LHR:

TRAINING PROGRAM:

During internship-training program of Hailey Collage of Banking and

Finance I worked in Askari Insurance Company for 6 weeks. Fortunately
I had the advantage of working in the very friendly atmosphere branch
of Askari Insurance Company. Here I had the chance to learn a great
deal.
During the training I worked in different departments of the Askari
insurance company. I was able to get a complete idea of the working of
a insurance company. It was a very knowledgeable experience.
In the following pages I have explained the working of various
departments in which I worked during the period of training. I am very
grateful to the officers of Askari Insurance Company who helped me
during the training in understanding various aspects of insurance
company as well as after training in the preparation of Internship
Report.

DEPARTMENTS

(1) Underwriting Department

(2) Accounts Department
(3) Claim Department
(4) Marketing Department
In the early days of marine insurance, the details of a ship or cargo to
be insured would be described on a slip. This slip would be taken to
Lloyd's and the person who was to carry the risk would read the details
and then sign the slip under the details of the risk. In this way the
person carrying the risk became known as the underwriter. The
underwriting process is far more complicated nowadays but the term
still applies.
When we looked at the nature of insurance we take it as a common
pool. The contributions of many people were made to the pool and the
losses of the few were met from it. In essence the task of the
underwriter is to manage this pool as effectively and profitably as he
can. Thinking of the role of the underwriter in this way we could say
that he has to:

Assess the risk which people bring to the pool;

Decide whether or not to accept the risk or how much to accept;
Determine the terms conditions and scope of cover to be offered;
Calculate a suitable premium
HAZARD
The first task of the underwriter is to assess the risk which person
brings to the common pool. There are various definitions of risk and a
number of different associated terms. One of the terms we examined
was hazard. We differentiated hazard from peril by saying that peril
was the event giving rise to the loss itself, such as collision, fire, theft.
Hazard was the factor which might after the frequency or severity of
the peril.
Underwriter has the task of assessing the hazard which is associated
with the various perils brought to the common pool. There are two
aspects of hazard, physical and moral with which the underwriter is
concerned.

THE UNDERWRITING PROCESS

The actual process by which risks are underwritten will vary from one
class of business to another and will also depend on an insurer’s
general approach. Underwriting in a general sense in relation to
personal insurances, life assurance and commercial insurances.

PERSONAL INSURANCE
The underwriting of personal insurances is relatively straightforward.
The main source of information abut a risk will come from the proposal
form and if there is anything else which an individual underwriter may
want, he would write to the proposer. A large volume of proposal forms
for various classes of personal insurance will be dealt with by branch
offices of insures. Much of the work will be mechanical in nature and
the vast bulk will be processed with little difficultly
In many cases the underwriting is delegated to some other person,
quite outside the insurance company. This is the case for example in
travel insurance where the policy is sold by a travel agent or airline. A
proposal form is completed by the proposer and the policy issued
almost immediately from a pad of policies. Possibly with an upper
monetary limit on the sum insured. Underwriting in these cases is
almost a matter of making sure that a completely undesirable proposer
is not allowed cover. There will be little discrimination among those
cases which are accepted and he brooked or other agent will have little
or no flexibility in pricing.

COMMERCIAL INSURANCE

The underwriting of commercial business insurances is a much more

complicated and involved task. Commercial insurance rang reform
small shops and factories to large multinational corporations with
operations in many countries throughout the world. The degree of
complexity of the underwriting required will obviously vary with sheer
size of the risk but certain basic principles are still recognizable.

The essence of the task is that the underwriter has to evaluate the
hazard associated with the risk which is being proposed. In small cases
he may be able to do this from reading a proposal form and
corresponding with the proposer. It may be that a local inspector asked
to call and see the shop or factory for himself. In large cases this is
simply impossible. For one thing the details of a risk could not be
confined to a proposal from. There is just too much information to
condense on to a form no matter how large the form may be.

This is where the broker may help. As we mentioned earlier, the broker
in these large cases will be in a position to prepare the case for the
underwriter. This may mean site inspections by the broker and the
preparation of the plans and reports on the relevant aspects of the
risk. This documentation, which may be extremely extensive, is then
passed to the underwriter and negotiation can commerce on the
terms, conditions, cover and price.

A RISK SURVEYS

Even where a broker is involved (and certainly when there is no

broker). The underwriter will involve a surveyor. This risk surveyor is
the person who acts as
The eyes and ears of the underwriter, many companies employ
specialists surveyors in the different areas of risk such as fire, security,
liability, business interruption and so on.

The surveyor will eventually prepare a report for the underwriter and in
the case of many property risks will also draw plan. The report will
cover a number of features, including.

A full description of the risk. This may include the plan of the
premises in the case of property risk, the process being carried on at
the premises, details of the insured etc.

An assessment of the level of risk. This will take into account all
the relevant hazard factors, both moral and physical, and provide the
underwriter with some idea of the degree of risk which he is being
asked to accept. The surveyor will also be able to comment on
surrounding property as in the case of fire insurance, for example, this
may have an impact on the level of risk.

A measure of maximum probable loss (MPL). This MPL, or

estimated maximum loss (EML) as is known by some, is the maximum
that the surveyor believes will be the subject of a loss.
This MPL calculation takes no account of any good features which may
be present. The underwriter must then consider the impact of good
features and may reduce the MPL. In a fire risk the underwriter may
take account of fire lighting apparatus of various kinds such as
automatic sprinkles.
One point the surveyor would have to remember is that MPL, he has
just calculated is only for fire damage. The building could, for example,
be in the flight path for a major airport and run the risk of being
destroyed by aircraft.
Dividing walls would be little calculating MPLs is to give the underwriter
an idea of the maximum which is likely to be lost.
Recommendations on loss prevention. The surveyor will also make
known to the insured what steps should be taken to protect the risk. In
a few cases these recommendations will be in the form of
requirements which the insured must implement if cover is to be
granted.
The surveyor’s view on the adequacy of the insurance being
requested. In all of this the responsibility for ensuring that the cover is
adequate, rests with the insured. He may seek advice from a broker or
other expert but at the end of the day he will have to satisfy himself
that the insurance are adequate.

Adequacy, in the case of many classes of insurance will mean the sum
insured. This will be true for many classes of property insurance. In the
case of liability insurance there is of course no sum insured, but a limit
of indemnity. Adequacy in thee cases will mean a limit of indemnity
large enough to cater for the expected claims. The adequacy of cover
is an extremely important issue and the underwriter will want to
ensure, as far as is possible. That the insured is not under insuring the
risk.
Assuming that the risk is acceptable in all matters relating to the level
of hazard, the decision as to how much of a risk can be accepted is, in
part, dependent on the financial capacity of the insurer. The insurer
may have some limit on how much of a particular type of risk it wants
to accept in any year. Questions relating to the financial capacity of
the insurer, lead us into the area of reinsurance.

PREMIUMS
Tasks of the underwriter as:
Assess a risk which people bring to the pool;
Decide whether or not to accept the risk or how much to accept;
Determine the terms; conditions and scope of calculate a suitable
premium.

So far we have looked at the role of the underwriter, the underwriter

process itself and the part played by reinsurance. These have
examined, in their different ways, the way in which risks are accepted
insurers and the financial steps which insurers take to protect
themselves. Insurance Companies have two final aspects the insurance
transaction to examine. The first, which business of pricing and praying
for the insurance service and the second is the making of claims.
The last task of the underwriter was to calculate a suitable premium.
The premium which an insured pays represents that insured’s
contribution to the common pool. This contribution must be fair and
must reflect the degree of hazard which that insured brings to the
pool. In other words the premium must be sufficient to:

Cover Expected claims

The insurer is in a position to estimate the level of claims which it
expects. It is not possible to say exactly how much is to be paid out in
claims but because of the numbers involved the insurer can make a
reasonably accurate assessment of the likely loss costs. At the very
minimum the premium must be sufficient to meet these expected
claims.

Create an estimate for outstanding claims

Not all claims will be settled during the year for which the premium has
been paid and hence the premium must take into account those claims
still to be settled at the end of the year. This is particularly true in the
case of claims involving personal injury. They can take several years to
settle and the insurer must bear them in mind when calculating the
premium.

Provide a reserve
The insurer must also take into account the fact that there can be
contingencies, beyond their control, which may involve a liability to
meet claims at some time in the future. Insurers do this by making
reserves.

Meet all expenses

The insurer has a number of operational expenses to meet in the
running of the business. These include:
Salaries to staff;
Office costs of all forms’
Advertising;
Commission.
The premium collected from each insured must be sufficient in
aggregate to cover these costs of operating.

Provide for profit

Finally, the insurer must ensure that there is provision for a reasonable
profit. The majority of insurers is answerable to shareholders and must
provide a reasonable return on the investment which these
shareholders have made in the company. In the case of mutual
companies, the members will still be looking for
a reasonable surplus being made in order to meet the objectives of the
mutual.
Arriving at the premium, however, is not simply a matter of calculating
the correct premium by a mathematical formula. A number of
important commercial considerations must also be borne in mind.
These will include:

Inflation
The insurer must be aware of the changing value of money. Claims will
be met tomorrow, out of premium received today. The implication of
this is that the cost of settling a claim may rise, not due to any
increase in the magnitude of the claim itself, but simply due to the all
insurer can not ignore in their premium calculations.

Interest rates
We have already seen that insurers are major investors of funds. These
funds generate substantial investment income upon which insurers
depend. Variability in interest rates has also to be taken into account in

premium calculations.

Exchange rates
We have also seen that a substantial volume of premium income is
derived from outside of the United Kingdom. Whenever there is
movement of money across national borders, there is the added
problem of exchange rate risk. The insurer has to take account of this
risk and the cost of managing it has to recover through the premium

which insured’s pay.

UNDERWRITING PERFORMANCE

Rupees in million
2010 2009
Fire & Property Damage

Gross Premium 295 248

Net Premium Revenue 67 49
Net Claims 12 18
Underwriting profit 17 19
Marine, Aviation & Transport

Gross Premium 55 62
Net Premium Revenue 50 39
Net Claims 12 8
Underwriting profit 38 23
Motor

Gross Premium 555 427

Net Premium Revenue 504 420
Net Claims 290 242
Underwriting profit 55 63
Accident and Health

Gross Premium 355 290

Net Premium Revenue 300 275
Net Claims 286 249
Underwriting profit (38) (42)
Miscellaneous and Treaty

Gross Premium 90 81
Net Premium Revenue 25 22
 Net Claims 8 5
Underwriting profit 18 15

Required

Documents:

Documents required under taking insurance are as follows:

Documents and information for Motor insurance:

1. Original CNIC,
2. Details of vehicle,
3. Sum insured,
4. Registration Book,
5. Driving license,
Documents and information for Marine insurance:
1. Original CNIC,
2. L/C Number
3. Performa invoice
4. Sum Insured
5. Vessel Name
6. Port of shipment and destination

Documents and information for Fire insurance:

1. Original CNIC of Insured,
2. Type of Risk,
3. Construction class,
4. Sum insured,
5. Subject Matter of insurance,

Documents and information for Travel insurance:

1. Original CNIC,
2. Area of visit
3. Sum insured
4. Duration for insurance
5. No of persons

Documents and information for Health insurance:

1. Original CNIC of insured
2. Current health certificate
3. Type of cover required
4. On monthly or weakly basis
 I worked in UNDERWRITING DEPARTMENT for 12 days. During
this short period l learnt how to asses the risk and whether to
accept the risk or not and if accepted than on what terms and
conditions and calculate suitable premium for that risk. The
premium is based on many factors like how if the risk is more
hazardous than high rate of premium is charged similarly if the
risk is less hazardous than low premium is charged. The premium
that is charge for a risk must be adequate for that risk and meet
all the expense that spent on that risk like administrative,
commission, advertising and other general expenses etc.
Different software is used in agico for the calculation of
premium. I learnt how to operate that software to calculate the
premium. In this way I learnt how to premium is calculated and
what types of risks covered in the policy and issue the insurance
cover note.

I got this information from Mr. Nasir was very co-operative and
helpful. He taught everything related to underwriting in a very
friendly atmosphere. They were appointed in this insurance
company from few years and they were doing a very good job. It
was a very nice experience to in this department.

It is the one of important department of an insurance company. One

can have a complete view of the functions and monthly expenses of
insurance company from the accounts.

The functions of accounts department include managing controlling

and recording the inflow and outflow of cash from the daily basis to
monthly and annual basis. It is very difficult job to record all the
expenditure of the company. This increase the importance of account
department in the company. The profitability of a company can be
judged through the analysis of its accounts record. Major work of
account is done in company head office in Rawalpindi.
One can have a complete picture of the different activities and
expenses by sitting in “ACCOUNTS”. From this perspective it was a
knowledgeable experience for me.
On the very first day Mr. Raza who is designated as account officer. He
gave me an overall view of the various functions performed by the
department.
I worked for about 6 days in Accounts. In this short period I learnt a lot
not only about the “Accounts” but also various other activities of the
Insurance company. Mr. Raza who is the in charge of the Accounts
Department was very helpful and co-operative.

I learnt about various functions of the Accounts. With the help of Mr.
RAZA I was able to manage petty cash and other expenses of the
branch. He was kind enough to take out time from his busy schedule to
teach me how to maintain records relating to day to day branch
expenditures. The main work of accounts is done company head office.
He was responsible for “Manage Branch Expenses and Staff Salaries”
which is a tough job and I helped him along with other internees in
doing this task during the period of my internship.
Working in this department was a very nice experience.

In a real sense the claim is the tangible result of insuring. We have

talked quite a lot about peace of mind, security, freedom from worry
and so on but at the end of day the value of the cover will be judged,
for most people, by the way which a claim is handled. The actual
procedure for handling claims varies according to matter such as the
type of cover, the amount of the claim and whether it is a personal or
commercial claim insured.

CLAIMS NOTIFICATION
The first and most important point to make is that the notification of a
claim is the responsibility of the insured. We will see later that the
insured also has certain other duties but at the outset he has the
responsibility of intimating the claim. We saw in chapter six that one of
the claim. We saw in chapter six that one of the conditions on policies
relates to the notification of claims. The insurer will want speedy
notification of the claim and will often lay down time limits within which
a claim should be intimated.

The means by which claims are normally intimated is the claim form an
example of a form is shown in Appendix 1 at the end of this chapter.
This is for a business premises policy and you can see the kind of
questions which are asked.

While the claim form is the main means by which insurers receive
notification of claims, it is not always used. In many cases, including
large losses or losses involving a great deal of details, the insurers
would appoint a loss adjuster and we will look at the role of the
adjuster later.

CLAIM HANDLING
Small, personal claims are often dealt with by someone, other than the
insurance company. Brokers and others can have delegated authority
to issue simple personal policies. In certain cases these brokers may
also have authority to handle claims. There may be a limit on the value
of claims which can be dealt with in this way but the process is speedy
and the claimant deals with the person or organization issuing the
cover in the first place.

The majority of claims, however, will be dealt with by the claims

department of the insurer. The onus is on the insured to prove that he
has suffered a loss by a peril which is insured by the policy, and this
will have been done by the completion of a claim form is most cases.
The insured must also prove the value of the amount of the loss in all
cases other than those involving life assurance, personal accident or
liability. The insured cannot simply intimate a claim for a lost or
damage item without proving the value of the item. This proof could
take the form of a purchase receipt, a repair account or valuation. The
point is that it is not or the insurer to prove the value of the loss.
The insurer has its own areas of responsibility, it has to ensure that:
Cover was in force at the time of the loss;
The insured is the correct insured;
The peril is covered by the policy;
The insured has taken reasonable steps to minimise the loss;
Conditions have all been complied with;
No exceptions are appropriate
The value of the loss is reasonable.

These steps can involve a great deal of work and the claims
departments of companies are often among the busiest. However,
there is a limit to the number of staff which even the largest
companies could afford to have in house to deal with claims. Not only
would the cost be huge but the level of expertise required would be
costly in terms of recruitment and training.

LOSS ADJUSTERS

The alternative is to retain experts. Such experts are chartered loss

adjusters. Not only are they used for large or detailed claims but many
insurance companies would retain the services of a loss adjuster to
deal with the majority of their property losses.
The loss adjuster is an expert in processing claims from start to finish.
They are normally involved at the very early stages of a claim and will
see it through to the conclusion. This will involve ensuring that all the
interests of the insurer are preserved, in checking that the cover was
in force and was adequate eat the time of the loss. The adjuster will
also act to minimize the extent of the loss and is in a position to use
his considerable experience to bring about a swift settlement of the
claim.

The loss adjusters would go to work, helping the insured to recover

his position after this loss and a final report would follow which would
give details of what the actual loss amounted to.

CLAIMS SETTLEMENT

The final stage in the claims procedure is the actual monetary

settlement. The claim has been notified, all parties have carried out
their respective duties and all that remains is for the claim to be
settled. The actual settlement, or the amount payable, depends upon a
number of factors including: the nature of the cover; the adequacy of
the cover and the application of any conditions which
Limit the amount payable.

It is possibly easier to decide on the amount payable under a life

assurance policy than other forms of policy. The life assurance policy
normally has a fixed sum assured and both the assured and the
assurer understand exactly what is to be paid and under what
circumstances it will be paid. There may, of course, be complications in
specific circumstances but in the main the amount payable is stated on
the policy and is not the subject of discussion or negotiation at the
time of a claim. What we might say is that in these cases the amount
payable in the even of a claim has been determined prior to the claim
and has been stated on the policy.
Contrast this to the case of a fire claim at a factory. The policy of
insurance does have a sum insured but this is only the limit of the
liability of the insurer, not the amount which they have agreed to pay
in the event of a claim. The eventual cost of the claim will depend on
the extent of loss or damage and on the nature of the

Cover afforded by the policy. In most property policies there are two
kinds of cover, indemnity or reinstatement. These are terms with
which those of you who go on to study general insurances will become
very familiar.

In brief, indemnity is one of the basic doctrines of insurance which says

that an insured is to be placed in the same financial position after a
loss as he enjoyed before the loss. As a value can not be placed on a
person’s life or limbs, we can say that life assurance and personal
accident policies are not assurance and personal accident policies are
not contracts of indemnity. Property and liability policies however, are.
Take the case of a fire at a factory, which present obvious problems in
ascertaining which value of the loss. A machine bought five years ago
for 50,000, which has been used for all of these five year is clearly not
Worth 50,000 today and this would not be value of the loss. Trying to
place the insured in the same financial position after the machine has
been damaged, as the enjoyed before may damage will be difficult.
Where the machine is completely destroyed the measure of indemnity
would be the replacement cost less an amount for wear and tear. In
the case of partial damage, indemnity would be the repair cost less
wear and tear.
Let us assume that the machine has a life expectancy of ten years. It
has expended half its life expectancy and this is a measure of the wear
and tear. The cost of replacing the machine today is 90,000. Indemnity
would then behalf of the cost of replacement 45,000 and this would
have to be the sum insured. Notice that this figure depends on the
level of wear and tear and the replacement cost. As replacement costs
will rise each year it is likely that the final sum insured will have to rise.

You can see how this could cause a great deal of work, and potentially,
a few problems for both the insured and the insurer.
Reinstatement, on the other hand, provides the insured with the cost
of reinstatement. This is a form of new for old cover and many
household insurers use that phrase in their marketing. Offering
reinstatement avoid much of the difficulty in ascertaining the value of
a loss under an indemnity contract. In the case of the machine we used
in the contract. In the case of the machine we used in the earlier
example, the insured would have to fix sum insured at the cost of
reinstatement. We know this to be 90,000 but the loss may not happen
until the last day of the insurance year. What the insured needs to
calculate is the cost of reinstatement, at the time of reinstatement,
and this may be higher than the cost of replacing the machine today. It
may even be that there is a time delay in ordering new machines of
this type. All of these factors have to be taken into account.

With liability claims is a little easier to decide on indemnity. A liability

policy provides indemnity to the insured in respect of his legal liability
to pay damages.
Diagrammatically, I would explain to it in the following
manner:
 After verification of
all documents, a Intimation of claim
Intimation normally is
disbursement made through the telephone
voucher is send to call or client can directly
head office and claim inform the company.
is paid.

In the next step, the In this step the

required documents are
surveyor is appointed
collected by mutual
cooperation i.e. insurer to access the actual
& insured loss.

MEAN OF INTIMATION:
Most of claims are intimated through the phone call or it’ll also make
through that the client directly came in the company and inform about
the claim. When the claim is intimated by the insured, some important
information are required from the insured person i.e. Date, name and
address of the insured person, policy no, expiry date of the policy,
endorsement no (if any), make of the vehicle, engine no, chassis no,
nature of loss, name of a person with telephone number with whom
the contact can be made for any further information and estimate of
loss.
After having the above information from the insured person, the
further proceeding is carried on. You can observe the claim intimation
form below:
 Askari general insurance co. ltd.

MOTOR CLAIM INTIMATION FORM

BRANCH OFFICE – LAHORE

Date:_____________________

ATTN: Miss Asma

Name & address of the insured___________________________________

____________________________________________________________

Policy No: MVP__________________________Date:________________

Endt. #:_____________________________________________________

Expiry Date:_____________Receipt No:___________Date:___________

Date of Expiry of previous policy, if any:__________________________

Date of intimation of loss to the branch office:______________________

Make of the vehicle:____________________Reg. No:_______________

Cause and nature of loss:_______________________________________

Place where survey is to be conducted:____________________________

Contact person with phone No:__________________________________

Name of the surveyor appointed:_________________________________

Contact No:__________________________________________________

Date:______________________Authorized signature:________________

After fulfillment of intimation form it is decided whether to conduct;

 Self survey.
 Independent survey.
Self survey:

If the estimate of loss or damage is below than Rs.10, 000, then survey will be conducted
by the staff member of ‘Askari general insurance Company’. Mostly, self survey is
conducted in order to save the expenses of the company.

Independent survey:

Normal practice to access the loss is carried on through the appointment of independent
surveyor of any surveyor company. These surveyors are experienced in assessment of
loss and assess the actual loss and try to minimize the loss in order to favors the insurance
company. But they don’t do something unfair in assessment of loss.

Surveyor will survey the vehicle at the spot of accident or at the workshop which are
specified by the company.
 Askari general insurance co. Ltd.

SELF SURVEY REPORT

Claim No.: __________________ Int.Date:________________

Insured Name:____________________________________________

Policy No: __________________ Expiry Date:_______________

PARTICULARS

Make: __________________ Sum Insured:_______________

Reg. No: __________________ Model:_______H, P/CC:_______

SETTLEMENT

Amount of labour Rs.____________________

Cost of parts Rs.____________________

Sub total Rs.____________________

Less depreciation @ Rs.____________________

Net payable Rs.

Cheque may please be issued in favour of ______________________

___________________________
Date & Signature of surveyor
I worked in Claim department for 12 days. During this time I realized
the importance of this department. Reputation of the insurance
company largely depends upon the efficiency of this department.

Mr. Ramzan helped me a lot and gave me the above-stated information

regarding claim department. With the guidance of Mr. Ramzan. I
learned how to make a claim file. In claim department I learnt the
whole procedure of claim process from claim intimation to claim
settlement. He was very friendly and helped me in every possible way.
He told me how to appoint surveyors to investigate the claim and send
a complete file of claim. Than I got knowledge how to verify the
information and documents according to various angles and after
verification of documents and prices than issue the claim check.. By
working with him the claim settlement Procedure became very clear.

During work in claim department I got knowledge about various forms

and their uses like policy form, claim intimation form, accicdent report
form, survey form, satisfaction note, claim disbursement voucher, bank
payment voucher etc.

They have a busy routine. There is a heavy responsibility on their

shoulders to handle the entire claim process. They took out time from
there busy schedules to explain to me the working of department.
The role of marketing generally focuses on products and services, their
prices, their promotion and the channels through which they are sold
and distributed to people and organizations that need and want them.
Essential part of marketing's role today is to match each organization's
capabilities with the need of specific groups of customers in order to
achieve the objectives of both parties. Insurers have a service to sell
this most be marked in such a way as to attract consumers or potential
consumers. Over the last couple of decades there has been a
substantial increase in the level of publicity undertaken by insurers and
brokers. Insurers, in particular, have embraced modern concepts in
marketing and some of their advertisements are regarded as 'classics'
in their own light. People may be familiar with the money television
advertisements, for example, which appear regularly, promoting the
products available from insurance companies.
Advertising and the marketing of products is not limited to television.
Insurers make substantial use of a whole range of techniques.
Marketing plays a vital role in the transaction of insurance today.

At some point, the potential consumer has to be provided with an idea

of the product being offered, the television advertisements, bill-board,
sports sponsorship etc. may all generate interest, but at some stage
the proposer will want something to read which he can understand and
which will indicate what the insurer can offer by way of protection. In
the past it may b fair to say that
The insurer presented a rather austere image to potential consumers.
There was a certain mystery about the product and the marketing
message was not always
Clear. Often the only printed publicity material which was available
came in the shape of the proposal form. This is a generalization and of
course there have always been insurers who have been excellent in
their marketing.

Marketing Department of
AGICO:
The marketing department of Askari insurance Company has a number
of marketing professionals. They are all experts in their work.
Mr.Azhar-A-Murad marketing manager and Mr.Feroz Qaiser assistant
marketing manager of in Askari insurance Company are two main
persons. Mr. Azhzr-A-Murad is one of the legends of insurance field. He
has more than 35 years experience in marketing field. Personal
relations are main source for getting premium and revenue for the
AGICO. Every employee has their own relations and they bring
business for the company with their references. They participate
wholeheartedly to get the commission on revenues. AGICO provides
high %age of commission on sum insured.

I worked in marketing department for 6 days. During this time I

realized the importance of this department. Business of the insurance
company largely depends upon the efficiency and courteous behavior
of this department.
Mr. Azahr-A- Murad, who is the marketing manager and also in-charge
of department, introduced me to the rest of the staff. All of them were
very helpful and I learned about insurance marketing from them. Mr.
Feroz Qaiser helped me a lot and gave me the information regarding
Marketing. With the guidance of Mr. Azhar-A-Murad I learnt how to deal
with clients and brief them about products of the company. He told me
while dealing with the clients never ever makes any false statement
with the clients and you are in a good looking dress and your
behaviour must be polite with the clients. In this department I worked
with Mr. Feroz. By working with him the concept of marketing became
very clear. He told me always while dealing with the client first priority
should be given to the client interest and second to the interest of the
company.
They have a busy routine. There is a heavy responsibility on their
shoulders as they deal with clients for increase company business.
They took out time from there busy schedules to guide me how to deal
with clients and what type of information share with them.
 Motor
Motorinsurance
insurance

Fire insurance
Fire insurance

Engineering
Engineering
Health
Healthinsurance
insurance Products
Productsoffered
offered insurance
insurance

Miscellaneous
Miscellaneous
insurance
insurance Travel
Travelinsurance
insurance

Marine
Marine
insurance
insurance

TABLE OF DIFFERENT RATIOS

 2008 2009 2010

Leverage Ratios:
Debt Equity Ratio 57:43 57:43 47:53

Interest Cover Ratio(times) 1.52 2.00 2.52

Liquidity Ratios:
Current Ratio 51:49 52:48 49:51

Acid Test(Quick) Ratio 0.37 0.31 0.20

Efficiency Ratios:
Total Assets Turnover Ratio (Times) 1.29 1.32 1.40

Fixed Asset turnover(times) 2.01 2.07 2.40

Profitability Ratios:
Gross Profit Ratio 15.30% 12.90% 10.46%

Net Profit Ratio 2.66% 4.15% 4.21%

Inventory Turnover(times) 7.91 5.76 5.00

Return on Capital Employed 16.66% 16.48% 16.85%

Market Value Ratios:

Per Share (Rs.)
Break-up Value 22.84 26.63 32.27

Cash Dividend 0.75 0.75

2.82 4.54 5.64

Earning Per Share

BALANCE SHEET ANALYSIS

2008 2009 2010

ASSETS
Operating fixed assets 963,961,057 537,836,670 585,592,036
capital work in progress 40,260,082 475,214,695 67,435,944
long term deposits 4,027,780 3,996,550 650,550
Current Assets:
stores, spares and loose tools 38,527,545 36,333,854 19,641,030
stock in trade 249,798,561 185,452,931 142,680,978
Trade debts 73,023,993 304,471,808 320,084,928
loans, advances, deposits, 96,656,807 87,695,275 58,545,904
cash and bank balances 36,897,243 10,514,208 111,196,417

Total 1,503,153,068 1,641,515,991 1,305,827,787

2002 2001 2000

LIABILITIES
Issued subscribed and paid up capital 205,406,250 164,325,000 109,550,000
reserve for bonus shares - - 27,387,500
capital reserve share premium 41,081,250 41,081,250
general reserve 200,000,000 100,000,000 100,000,000
Un-appropriated Profit 22,660,143 83,894,927 76,496,986
Redeemable Capital 150,000,000
Long term loans 352,395,341 472,654,396 314,103,910
Liabilities against Finance Lease 25,026,591 34,838,087
Employee retirement benefits
Current Liabilities:
short term bank borrowings 252,029,514 504,643,382 397,588,859
current portion of long term liabilities 91,085,082 86,055,167 62,438,535
Creditors, accrued and other liabilities 124,046,467 114,959,651 147,648,360
Provision for taxation 21,017,438 20,797,245 11,111,902
Dividends 18,404,992 18,266,886 59,501,735

Total 1,503,153,068 1,641,515,991 1,305,827,787

INTERPERTATION

This analysis is describing the five year balance sheet. So, it enables us to observe the
comparative progress of the company in these five years in each face item of the balance
sheet. It is clear from this table that the operating fixed assets have an increasing trend in
the company that these are Rs. 585.60 million in 2000 whereas after 2002 these remains
more then 964 million. As for as the current asset are concerned these are also increasing
as the business is expanding annually so the requirements of funds to met day to day
needs are also increasing which resulted into increase in the current assets.
Share capital of the company was Rs. 109.56 million in the year which was raised up to
163.33 million in the year 2001. Furthermore business expansion necessitated the further
issuance of share capital of 41.8 million and share capital figure reached to Rs. 205.41
million in 2002. Capital Reserves of the firm were also raised up to Rs. 136.16 million in
the year 2004 from 41.08 million in the previous years

General reserves of the co. were also increased from 100 million to 200 million in the
year 2002 and this amount was further raised to Rs. 300 million in the year 2003.

Long term loans are relatively less raised though the firm has expanded its business
volume. As for as, the current liabilities are concerned, the need to meet the business
requirements was raised therefore firm has to depend more on the current liabilities.
These are not bearing high interest rates therefore these are economical then that of the
long term liabilities.

In nutshell the comparative figures of the last five years revealed that the company’s
progress is increasing rapidly in terms of its business worth and also its business volume.
As the company’s total assets were Rs. 130.50 million which are now increased up to
Rs.2045 million which is a good sign.

VERTICAL ANALYSIS OF BALANCE SHEET

2008 2009 2010

ASSETS
Operating fixed assets 64.13 32.76 44.84
capital work in progress 2.68 28.95 5.16
long term deposits 0.27 0.24 0.05
Current Assets:
stores, spares and loose tools 2.56 2.21 1.50
stock in trade 16.62 11.30 10.93
Trade debts 4.86 18.55 24.51
loans, advances, deposits, prepayments and
6.43 5.34 4.48
other receivables
cash and bank balances 2.45 0.64 8.52

TOTAL ASSETS 100.00 100.00 100.00

EQUITIES 2002 2001 2000

Issued subscribed and paid up capital 13.67 10.01 8.39
reserve for bonus shares 2.10
capital reserve share premium 2.73 2.50 0.00
general reserve 13.31 6.09 7.66
Un-appropriated Profit 1.51 5.11 5.86
Redeemable Capital 9.98 0.00 0.00
LIABILITIES:
Long term loans 23.44 28.79 24.05
Liabilities against assets subject to Finance
1.66 2.12 0.00
Lease
Employee retirement benefits 0.00 0.00 0.00
Current Liabilities:
short term bank borrowings 16.77 30.74 30.45
current portion of long term liabilities 6.06 5.24 4.78
Creditors, accrued and other liabilities 8.25 7.00 11.31
provision for taxation 1.40 1.27 0.85
Dividends 1.22 1.11 4.56
TOTAL LIABILITIES 100.00 100.00 100.00

INTERPERTATION

This analysis is showing the relationship of each item of the balance sheet in ratio to the
total assets. It is clear from this analysis that how much of the assets are being kept in
which form at this company. The same depiction of the equities side is also provided.
Moreover comparative information of the five years enables us to judge the company’s
progress in this time period. Operating fixed assets were 45% of the total assets in the
year 2000 whereas these are forming a 65% part of the total assets in the year 2002 which
shows that company has increased its fixed assets surely is due to the increase in the
share capital. Company has raised its share capital to fulfill the requirement of funds for
expansion. Long term deposits are also very short which tells us that company has
expanding its business activities therefore it doesn’t have extra funds to put in long term
deposits. As for as the stores of the company are concerned these are also increasing as
compare to the figure of 2000. The reason of such increase is that by the expansion in
business volume it requires more store and stock for ensuring the continuity of operations
which is of intense importance in such industries.

The ratio of stock in trade and trade debts is increasing annually, which is showing that
now company needs more working capital.

On the other side the company has issued its further shares to raise funds in 2001 and
2002 Rs. 54.28 million and 41.09 million respectively to meet the business needs. With
this share capital induction the owner’s equity portion was raised in these years as
compare to 2000. The share capital was 13.67% of the total assets in year 2002 whereas
this ratio was declined in the year 2003 because respective portion of general reserve is
increased from Rs. 200 million to a Rs. 300 million. And further more, the current
liabilities are also increased to meet the working capital needs.

Long term loans are 28.79% in the year 2001 where as this ratio was decreased to 20.62%
in the year 2004.

HORIZENTAL ANALYSIS OF BALANCE SHEET

2008 2009 2010

LIABILITIES
Issued subscribed and paid up capital 187.50 150.00 100.00

reserve for bonus shares 100.00

capital reserve share premium

general reserve 200.00 100.00 100.00

Un-appropriated Profit 29.62 109.67 100.00

Redeemable Capital

Long term loans 112.19 150.48 100.00

Liabilities against assets subject to Finance Lease

Employee retirement benefits

Current Liabilities:

short term bank borrowings 63.39 126.93 100.00

current portion of long term liabilities 145.88 137.82 100.00

creditors, accrued and other liabilities 84.01 77.86 100.00

provision for taxation 189.14 187.16 100.00

Dividends 30.93 30.70 100.00

TOTAL LIABILITIES 115.11 125.71 100.00

INTERPERTATION

Here I have attempted to show the company’s progress considering the year 2000 as a
base year i-e how much company has expanded its business. It is basically the depiction
of company’s growth form the year 2000 and up to the current year 2004.
Share capital was increased 150% in 2001 as compare to the paid up capital of 2000.
Whereas, the share’s value was increased up 187.50% of the figure in 2000 then it was in
the year 2002 and onward.

General Reserve figure is increased by 300% in last four years. But the un-appropriated
profit is decreased by 73% in the 2004 as compare to the 2000. Long term loans were
also increased in the 2002 but the same were reduced after 2002.

More critical is that the short term borrowings are increased 175% and the major reason
of this increase is that most of the long term loans are achieving their maturity in these
years therefore the current portion of long term liabilities is increased by 274% which is
much higher. This is the major reason of having week current ratio.

Provision for taxation is also increased by 200% (approx) that is due to the expansion of
business growth.

PROFIT AND LOSS ANALYSIS

2008 2009 2010

Sales 2,032,159,094 1,252,560,023 1,306,887,918

Cost of Goods Sold 1,721,195,792 1,057,331,258 985,287,197

Gross Profit 310,963,302 195,228,765 321,600,721

Operating Expenses:

Administrative Expenses (25,469,915) (27,366,056) (19,089,432)

Distribution and Marketing Exp. (64,920,432) (33,830,380) (42,575,769)

other operating Expenses

Other Operating Income

Profit from Operation 220,572,955 134,032,329 259,935,520

Finance cost (145,384,832) (98,743,210) (105,759,182)

Profit Before Taxation 75,188,123 35,289,119 154,176,338

Taxation (21,017,438) (15,566,803) (11,111,902)

Profit After Taxation 54,170,685 19,722,316 143,064,436

INTERPRETATION

Profit and loss of the five years are provided here comparatively. From the above figure
we can see that company’s sales are increasing rapidly which is a sound signal of rapid
business growth. In contravention to the above growth signal the cost of goods sold of
company was also increasing, The company’s sales were increased in 2002 by 800
 million (approx) whereas increase in the cost of goods sold was high than that of the
increase in the sales in 2003. Therefore, the gross profit of the company was decreased.

In the year 2004 the sales of the company were reached at peak of Rs. 2750.40 million
where as cost of goods sold of the company was also increasing as the business volume is
expanding continuously. The gross profit of the company decreased in the year 2003 as
compare to the gross profit of 2002. The reason of this is the comparatively more increase
in cost of goods sold than that of the sales.

As we now that long term loans were raised in 2001 by 150% that’s why the finance cost
of the company was raised in the preceding year 2002 that was reached to its maximum
of Rs.145 million which reduces the profit before taxation than that of in the year 2000.
Whereas now in 2004 most of the long term loans were paid in 2003 & 2002 the finance
cost is much reduced. Marketing and distribution expenses are controlled in the 2003 &
2004. That is a factor to good profitability of company in these years.

VERTICAL ANALYSIS OF PROFIT & LOSS ACCOUNT

2002 2001 2000

Sales 135.34 219.58 210.45
Cost of Goods Sold 121.18 196.61 188.43
Gross Profit 15.30 15.59 24.61
Operating Expenses:
Administrative Expenses (1.25) (2.18) (1.46)
Distribution and Marketing Exp. (3.19) (2.70) (3.26)
other operating Expenses 0.00 0.00 0.00
Other Operating Income 0.00 0.00 0.00
Profit from Operation 10.85 10.70 19.89
Finance cost (7.15) (7.88) (8.09)
Profit Before Taxation 3.70 2.82 11.80
Taxation (1.03) (1.24) (0.85)
Profit After Taxation 2.67 1.57 10.95

INTERPERTATION

Above figures are showing gradually decreasing percentage of gross profit, provided that
the sales of the company are increasing annually. So, it is clear that the cost of goods sold
is relatively more increasing than of its sales. In 2004 the operating expenses are just
7.57% of the sales than these were 20% in the year 2000. i-e the increasing of trend in the
operating expenses is relatively slow than the sales. Profit before taxation ratio is more in
the year 2004 than that of just 2.82% and 3.70% in the years 2002 & 2003 respectively; it
is due to reduction of finance cost in current year. Though the gross profit of the
company has a decreasing trend, the profit after taxation ratio is relatively raising which
shows that beyond the annual increase in the cost of goods sold, other operations of the
company are being driven on the right track. It is the vertical analysis of profit and loss
accounts of the company.

HORIZONTAL ANALYSIS OF PROFIT & LOSS ACCOUNT

2008 2009 2010

Sales 155.50 95.84 100.00
Cost of Goods Sold 174.69 107.31 100.00
Gross Profit 96.69 60.71 100.00
Operating Expenses:
Administrative Expenses 133.42 143.36 100.00
Distribution and Marketing Exp. 152.48 79.46 100.00
other operating Expenses
Other Operating Income
Profit from Operation 84.86 51.56 100.00
Finance cost 137.47 93.37 100.00
Profit Before Taxation 48.77 22.89 100.00
Taxation 189.14 140.09 100.00
Profit After Taxation 37.86 13.79 100.00

INTERPERTATION

This horizontal analysis of the profit and loss account describes the comparative
information of above five year. Sales are 210% more than these were in 2000. It shows
annual increase in the sales volume. It is obvious that the marketing department is
efficient as for as the sales volume is concerned. RWML’S cost of goods sold is also
249% increased. It is an alarming increase in today’s competitive era.

As the Company’s cost of goods sold is 30% extra increased than that of the increase in
sales. Due to the higher cost the selling price of the product is also increased however, the
sales increasing ratio is low than that of cost.
This alarming increase in the cost of goods sold is due to the rise in the prices of raw
material consumed and packing material used. This increasing trend of cost of goods
sold has reduced the company’s gross profit ratio also.
Company has controlled its marketing and respective administrative expenses in 2004
than that of in the last two years. Therefore, the Co. has better net profit ratio than that of
the last two years.

Over all if we see the company is loosing its profitability as it has more than 80% of the
profits in the year 2000. So we can say that the business is growing in its volume but not
in the profitability.

If we see from the investors point of view whose aim is to maximize their worth. This
business is effectively going on but the Co. is not increasing its profitability annually.

In the year 2004 the operation profits of the company were declined therefore the taxation
cost is also decreased in the year 2004. By reduction in the taxation cost, profit after
taxation rose in the 2004. Which were 37% & 65% in the years 2002& 2003 respectively
raised up to 81% in the year 2004.

 Mostly insurance companies are endeavoring to bring to its customers new and
improved products and services that provide efficient and effective solutions such
 as web-based e-insurance company allows its customers to access its insurance
services via internet. Corporate customers can efficiently conduct their day-to-day
insurance covers claim information, current status of the claim, rate of premium
of different risks and much other information as they required via an automated,
versatile and a straight through processing platform's would like to recommend
Askari insurance company to provide this facility to their customers as well.

 There should be central complaint cell in company in order to reduce the people’s
complaints and foster the ratio of productivity.

 Money laundering and white-collar crimes are on the rampant. Aggressive and
comprehensive mechanism should be set-up to save company

 General working conditions ought to be improved.

 AGICO needs to improve its website. More information relating to insurance

covers should be available on the website.

 Management should distribute work equally among different employees. Some of

the employees are overburdened while some sections are overstaffed.

 Askari Insurance Company needs to use more marketing channels to make the
public aware of its products and services. In the presence of intense competition
Askari insurance Company has to realize the importance of marketing.
One of the most important aims of the student life is to express him /
her correctly and adequately. This was believed in my mind when I first
decided to go to Askari Insurance Company to complete my internship
program.

The company has been growing both in size and profit for past few
years and has a good repute in the market. The year 2011 is expected
to offer increased competition in the business as more insurance
companies are in the market. With their focused strategy and product
development initiatives planned for the year, Askari Insurance
Company is strongly positioned to meet these challenges. The Askari
insurance company has very well repute in the market overall
insurance company is going well and doing a good business but there
are few problems for that I have tried to give few recommendations
that might help company to improve. So finally this internship has
helped me a lot in gaining practical knowledge of job that will help me
in the real job once I complete my MBA.

While conducting this report I faced some problems in getting the data
as at websites data is not managed very well. The knowledge of what I
have studied in MBA also came in handy. Once every thing was found
out it got very interesting.

I am very thankful to all the employees of askari general insurance

company my friends and teachers and my brother. Who all help me in
the preparation of this internship report and encouraged me.