CHAPTER 1

1. OVERVIEW OF THE ORGANIZATION

1.1

Brief History

1.2

Nature of the Organization

1.3

Business Volume

1.4

Product Line

1.1

Brief History

In the early 1930s, under the inspiration of the Quaid-e-Azam Mohammad Ali Jinnah,
there began to appear signs of economic renaissance of the Muslims of India. Shipping,
Airline, Banking and Insurance Companies made their debut.
First meeting of the sponsors EFU Insurance co., Ltd. was held in 1931 in London.
Left to right: Abdur Rehman Saddiue, partner of Haira Trading Co.,
Mr. BM Collins of BM Collins & Co. Ltd. London. Mr. Ch Falloon,
General Manager, Atlas Assurance Company, London. Mr. KF
Haider, Partner of Haira reading Co., London.

In 1932, in Calcutta this company was established with financial

assistance form the Aga Khan and the Nawab of Bhopal. The
company was named Eastern Federal Union Insurance Company. It
was registered in Calcutta and operated in undivided India and
Burma. Its business was both General and Life Insurance.
In 1947, on the birth of Pakistan, EFU (as the company was called) found a new home in
a new country and rapidly established itself as a progressive and innovative insurer. It
gave the emerging insurance industry the leadership, the manpower and the drive needed
to grow in a situation where at the time foreign companies held three-fourths of
insurance.

By 1961, EFU had become the flag bearer of Pakistans insurance industry in the world
stage, and the largest life company in Afro Asian Countries (excluding Japan) under the
leadership of our founding chairman Mr. Roshen Ali Bhimjee.
In 1963 EFUs Convention held at Beach Luxury Hotel Karachi. In
this convention Mr. Roshen Ali Bhimjee welcoming Mr.
Wahidduzzaman, who was the Commerce Minister of EFU Co. Ltd.
In 1966, Sitar-e-Quaid-e-Azam(SQA) was given to

Mr. Roshen

Ali Bhimjee from the President Ayub Khan.

It remained so until 1972 when Life Insurance in Pakistan was

nationalized. From this time onwards EFU operated slowly as a
General insurance company.

Corporate Profile

EFU General is managed by a team of experienced insurance

professionals with strong support from service departments such as
Finance and Human Resource Development. The Managing
Director of the Company has international experience of running the general insurance
operations of an insurance company based in the United Arab Emirates (UAE). EFU
General has over 64 branches situated throughout the country and employs over 10,000
individuals at its Head Office and in the branch network. In 2004 EFU General's total
premium income was Rs. 4.8 billion.

In 1992, the Government of Pakistan opened up life insurance to the private sector and
EFU Life Assurance Ltd was incorporated in 1992 as the first private sector life
insurance company.
The third company in the EFU Group is Allianz EFU Health Insurance Ltd, which is
dedicated to providing health insurance to individuals and corporations. It is a joint
venture with Allianz of Germany, one of the largest insurance companies of the world.
Allianz EFU Health is Pakistan's first specialized health insurance provider.
EFU is the only insurance group in Pakistan to provide a full range of insurance services.
This includes life, health and general insurance. A pillar of EFU's strength lies in its close
and long-term (over 50 years) relationship with its main reinsurer, Munich Re of
Germany, one of the largest reinsurance companies in the world.
In 1992, the Life Industry was opened to the private sector, and on 8th November1992,
EFU Life was the first life insurance company to be granted a license. It started
operations in 1993 with Group Life products and in March 1994 launched its individual
Life Insurance products. EFU Life entered the filed of life insurance with focus on the
changing needs of the population. The company is committed to providing its
policyholders with solutions for the problems of needs of the population. The company is
committed to providing its policy holders with solutions for the problems of todays
complex and rapidly changing financial environment by introducing innovative and
modern products.

The Company has a growing branch network of over 100 branches

through out the country with employee strength of over 22,000
personnel in its sales force and around 150 personnel at its main
offices in Karachi, Lahore and throughout the country. The company
employs 4 full time actuaries and also has an active involvement of
one of the leading actuarial firms in the country.
EFU Life enjoys the distinct reputation of being the largest private sector life assurance
company in Pakistan. In a very short span of time the companys name has become
synonymous with progress and prompt claim service.

EFU Life is headed by a team of professionals with extensive life insurance experience in
the United Kingdom. This has helped the company establish a professional culture unique
amongst life insurance companies in Pakistan.
Another pillar of EFUs strength is the very close and long term (over 50 years)
relationship the group has with its main reinsure, Munich Re. the largest reinsurance
company of the world.

EFU Life with its glorious past, and high traditions of service, especially where payment
of claims is concerned, once again promises to revive yesteryears happiness, security and
protection to its policyholders.

The commitment, dedication and experience of some of the most seasoned and highly
qualified people in the profession enables EFU Life to progressively enhance its services
and products.

We are not only licensed by the Government of Pakistan but we are also fully reinsured
by Munich Re, the largest reinsurance company in the world. EFU life is the 1st Pakistani
Insurance Company to be awarded the ISO 9001:2000 Certification, which is an
internationally recognized quality assurance system. The certification exemplifies our
quest for excellence and confirms our world-class standards in life assurance service.

Today, EFU Life continues to be the largest private sector life insurance company in
Pakistan. In 2007, EFU lifes premium income was Rs. 4.8 billion. The company enjoys a
market share of over 64% of the private sector life premium income (excluding single
premium).
EFU is the only insurance group in Pakistan to provide a full range of insurance services.
This includes life, health and general insurance. A pillar of EFU's strength lies in its close
and long-term (over 50 years) relationship with its main reinsurer, Munich Re of
Germany, one of the largest reinsurance companies in the world.
Another unique feature of EFU is a voluntary review mechanism by the companies to
keep under review their operations, by professionals of international repute. EFU General
has taken Mr. Wolfram Karnowski, who retired at a very senior level from Munich
Reinsurance Company of Germany, on its Board of Directors. EFU Life has appointed

Mr. Michael Bell, a very eminent UK based actuary (retired from Watson Wyatt and
currently Chairman of a large UK based life company), to carry out an annual review of
the company's policies and operations. This independent review enables the company to
keep abreast of international changes in the industry and ensures that the managements
adopt the best international practices.

1.1.1 EFU deals with three different groups, which are

EASTERN FEDERAL UNION (EFU)

EASTERN FEDERAL UNION (EFU)

I focus on one aspect of insurance i.e. life insurance.

1.1.1.1

There are three basic forms of Life Assurance

LIFE
LIFEASSURANCE
ASSURANCE

1. Term
1. Term
Assurance
Assurance

1.

2. Endowment
2.
Endowment
Assurance
Assurance

3. Whole of Life
3.Assurance
Whole of Life
Assurance

Term Assurance

It guarantees to pay a lump sum only on death during a chosen term; it has no surrender
or maturity value.

The variations of Term Assurance are as follows:

TERM ASSURANCE
TERM ASSURANCE

a). Level Term

a).
Level Term
Assurance
Assurance

b). Convertible
b). Convertible
Term
Assurance
Term Assurance

c). Decreasing
c). Assurance
Decreasing
Term
Term Assurance

2.

Endowment Assurance

It guarantees to pay a lump sum on death during a chosen term however if the life assured
survives and continues to pay the premium regularly it also pay a lump sum at maturity of
the plan.
It is basically an investment policy. The premium contains all three factors - protection,
expenses and investment but it is the investment content, which makes up most of the
premium.

There are three main variation of Endowment Assurance:

ENDOWMENT ASSURANCE
ENDOWMENT ASSURANCE

i). Non-Profit
i). Non-Profit

3.

ii). With-Profit
ii). With-Profit
Endowment
Endowment

iii). Unit-Linked
iii).
Unit-Linked
Endowment
Endowment

Whole of Life Assurance

Whole of Life Assurance is a permanent policy, i.e. it lasts for the whole of ones life.
Premiums are paid right up until death but there can be Whole Life contracts called
Limited Premium Whole Life where premiums cease at a specific age, usually 65 or 80,
although the contract itself continues until death.

Since there is no need to fund at quite so high a level with Whole Life as there is with the
Endowment, because the sum assured is paid out on only one eventuality and not two, the
investment element in the premium is less than in the Endowment premium.
The variations on Whole Life are the same as on Endowment, i.e.
(a)

Non-Profit

(b)

With-Profit

(c)

Unit-Linked.

Vision
To make EFU Life the best Insurance Company, our Clients will be the focus of
everything that we do. We will win their loyalty by caring, satisfying, and serving them
beyond expectations.

Values
For us life insurance is service to humanity, not just a business, we abide by the highest
principles of good conduct, moral integrity and impeccable ethics.

Mission
We shall together build EFU Life into a dynamic and financially sound institution by

Working together as a team

Continually improving our client service

Creating an empowered and self fulfilling culture

Developing innovative products

Adopting leading technology

10

1.2

Nature of Organization

The Company is engaged in life insurance business and was incorporated in Pakistan on
09 August 1992 as a public limited company. The shares of the Company are quoted on
Karachi Stock Exchange.
From the earliest days, Man has organized himself to control three main hazards, which
confronted him, and still do. These hazards are
(i)

Dying Too Soon

(ii)

Living Too Long

(iii)

Becoming Disabled

The fundamental purpose of Organization is to provide money to meet financial losses

caused by death, disability and illnesses. However, Organization may also provide
investment benefits that is, money payable on survival of the life assured rather than only
on death.
It originated and developed to reduce the impact of these hazards by grouping together
with others and thus sharing the risk.

11

1.3

Business Volume

Key Financial Data for the Last Five Years

(Rupees 000)

2009

2008

2007

2006

2005

7,226,876

7,250,509

4,817,874

3,338,078

2,500,098

6,769,079
1,604,864
8,373,943

6,807,131
2,005,337
8,812,468

4,431,546
1,882,987
6,314,533

3,042,316
717,288
3,759,604

2,257,827
469,814
2,727,641

1,299,861
2,651,068

1,297,659
2,708,505

887,393
1,798,526

758,980
1,085,416

622,169
803,416

1,603,394

-5,096,831

-2,022,095

-178,962

418,769

6,712

-73,838

-185,168

-914,012

599,615

-599,615

5,200,231
647,721
63,938

-1,563,033
-314,959
-158,200

4,815,579
1,434,745
-227,453

1,398,477
337,769
-101,800

1,424,869
296,214
-74,000

Profit / (Loss) after tax

711,659

-473,159

1,207,292

235,969

195,867

BALANCE SHEET
Investments
Cash and bank balances
Other assets
Fixed assets

15,053,389
1,365,081
1,078,081
350,208

9,684,973
1,425,424
467,589
308,345

11,757,140
949,466
339,055
269,589

6,573,206
683,275
204,855
238,892

5,156,704
455,453
138,289
217,928

17,847,481

11,886,331

13,315,250

7,700,228

5,968,374

750,000
646,040
232,500
14,767,466
1,451,475

750,000
-65,619
570,000
9,567,235
1,064,715

500,000
607,925
170,000
11,130,268
907,057

300,000
240,248
190,000
6,314,689
655,291

210,000
196,279
130,000
4,916,212
515,883

17,847,481

11,886,331

13,315,250

7,700,228

5,968,374

Gross premium
REVEMUE ACCOUNT
Premium-net of reinsurance
Interest and other income

Claims less reinsurance

Commission and expenses
Provision for Appreciation /
(Depreciation) on investments
Write back / Provision for
doubtful debts on available for
sale fixed income securities
Provision for impairment on
available sale equity investment
Capital contribution from
shareholder fund
Changes in the statutory fund
Profit / (Loss) before tax
Provision for taxation

Issued subscribed and paid up

capital
Accumulated surplus / (loss)
General reserve
Balance of statutory fund
Other liabilities

12

13

1.4

Product line

EFU Life has a comprehensive range of products, which has been developed after
extensive research of financial services in western countries such as the United Kingdom.
These products are designed to meet the varying needs of EFU Lifes clients and offer
the best in financial services.
EFU Life is the pioneer in introducing the following products and features in Pakistan
1.

Unit-linked products

2.

Term Assurance Products

3.

Critical illness products

4.

Groups Plan

5.

Islamic Fund Products

EFU Lifes product range is the most competitive in the market in terms of value for
money. The Company continuously reviews its product range to ensure that it remains at
the leading edge.

1.

Unit-Linked Products
a) Prosperity for Life
b) Education Plan
c) Capital Growth Plan

14

d) Saving Plan
e) Executive Pension Plan

(a). Prosperity For Life

It is a flexible and high value savings and protection product that ensures
that your dreams become a reality at all stages of life throughout your
life!
This plan is helpful for all those people, which needed the sufficient funds to fulfill the
responsibilities/needs of life.

(b).

Education Plan

It is a unit linked endowment policy plan. The basic objective of the plan is
to generate a lump sum for the higher education of the designated child
even if the life assured dies prior to the maturity of the plan.

On death, the total annual contributions will continue to be paid by EFU Life until the
maturity of the plan under the automatic continuation benefit. In addition if the income
benefit has been included, the level of income chosen will be payable quarterly in
advance until the maturity of the plan.

Additional Benefits

Inflation Protection (7% of the original premium in every year)

Income Benefit

Waiver-of-Premium (WOP)

15

(c).

Capital Growth Bond

It is a unit linked single premium plan with no minimum fixed term. The
main objective of the plan is to produce as high a return as possible through
prudent expert investment management. The minimum initial contribution is
Rs.50, 000/- with no upper limit. The unit allocation is 100% of investment. It gives the
benefits in case of

Emergency Access

Retirement Income

Built-in Protection Benefits

Natural Death
The death benefit is the bid value of your units or 101% of the original investment net of
any withdrawals, whichever is the greater.

Accidental Death
In case of accidental death, the benefit is the value of your units plus an additional sum
equal to the greater of the original investment net of any withdrawals or the value of your
units. This benefit is available up to age 60.

(d).

Saving Plan

It is a regular premium, Unit Linked Endowment Policy where the benefits

are largely linked to the value to the investment of the EFU Managed Growth Fund in
which a proportion of the premium is invested. This plan is ideal for group schemes and
the minimum no of employees eligible for the group is 10.

16

Additional Benefits
The additional benefit riders available with the EFU Savings Plan are as follows:

Life care Benefit

Life care Benefit Plus

Additional Term Assurance

Family Income Benefit (FIB)

Hospital care

Waiver of Premium Benefit (WOP)

Medical Recovery Benefit

Inflation Protection (IP)

(e).

Executive Pension Plan

It is a regular premium, Unit Linked Endowment Policy where the

benefits are largely linked to the value to of the investment of the EFU Managed Growth
Fund in which a proportion of the premium is invested.
Ensuring that retirement is planned for is vital, especially for those who are selfemployed or are working in a company that does not provide a pension. Otherwise, they

17

will end up becoming one of the vast numbers of people who cannot maintain a decent
standard of living in retirement, thus negating a lifetimes work.

18

Additional Benefits
This Plan offers a range of additional benefits to help you tailor the plan to suit your
particular needs.

Income Benefit (IB)

Accidental Term Assurance (ATA)

Inflation Protection (IP)

Waiver of premium benefit (WOP)

2.

Term Assurance Plan

There are two types of Term Assurance Plan

a) Security Plan
b) Loan Protection Palm

(a).

Security Plan

The plan is the ideal way of providing a substantial amount of life cover at
the lowest possible cost for a specified period.
EFU Security Plan is a term assurance contract, which allows you to provide protection
against the financial consequences of death at a very low cost.

19

Additional Benefits

Income Benefit (IB)

Accidental Death and Disability Benefit (ADDB or ADDB plus)

Inflation Protection (IP)

Waiver of premium benefit (WOP)

(b).

Loan Protection Plan

Probably the biggest financial commitment most of us undertake is a

house or a business loan. But how is this loan going to be serviced if the income flow
stops or reduces drastically should you die or suffer from a critical illness? Your assets,
which you have spent years, building up, may have to be sold forcibly to repay your loan.
The EFU Loan Protection Plan, by providing a capital sum on death and critical illness,
can ensure that your loan will be repaid leaving your assets unencumbered.

Additional Benefits
The following riders can be added to the main plan:

Life care Benefit

Life care Benefit Plus

20

Waiver of premium benefit (WOP)

21

3.

Critical Illness Products

Accident and Hospitalization Plan

There is absolutely nothing better then being blessed with good health. However,
No one can predict the future.
What would happen to you if you suffered an accident or had to be hospitalized?
The likelihood is that you and your dependents would be adversely affected.
EFUs Accident & Hospitalization Plan will help guarantee your financial well being. The
Plan will pay out cash on death, disablement or prolonged absence from work as a result
of

an

accident

or

hospitalization

due

to

an

accident.

The Plan provides a comprehensive range of benefits from which you can choose. You
can also tailor the level of payments to your needs by being able to choose up to 10 Units
of Benefits.
Death
With this plan, you can guarantee that your family receives a substantial lump
sum on your accidental death to help them maintain their standard of living.
Double Indemnity
If death occurs as a result of an accident whilst you are traveling as a fare-paying
passenger on a licensed public conveyance or on a commercial airline, that
standard lump sum payment is doubled.

22

Permanent Partial Disability

If you become disabled as a result of an accident, cash will be paid to you
expressed as a percentage of the Basic Sum Assured Per Unit of Benefit. Please
contact the Head Office for details.
Permanent Total Disability
Under this benefit, the cash payment (sum assured) will be made after 6
consecutive months of total disability, which means inability to engage in any
occupation for which you are reasonably qualified for by education, training or
experience.
ADDITIONAL BENEFITS
In addition to the basic benefits included in each unit you can add the following
two benefits to enhance your cover.
Accidental Disability Income
This benefit will help you replace part of your lost income by providing a monthly
income so that you can continue to meet your basic commitments.
Accident & Sickness In-Hospital Income
This benefit provides a fixed daily cash amount which will be paid directly to you even if
the medical expenses are paid for by your employer

23

4.

Group Plan

Although everyone has a need for life insurance, people in different life
stages may have different needs. Employees want to ensure whether
their families will be able to meet any financial obligations and carry
out basic living expenses should a death occur.

Coverage

Death

Group Accidental Benefit & Disability Benefit

Group Income Benefit

Group Illness Benefit & critical Illness cover

Group Loan Insurance

Group Provident Fund Insurance

The above covers are offered on a 24-hour worldwide basis, which means that both On
Duty and Off Duty claims are covered.

5.

Islamic Fond Product

a) Noor Plan
b) Asasa Plan

24

(a).

Noor Plan

Children are a blessing from the Almighty and mean a world to you.
Every parent wants to give their loved ones a secure future and a life that is least
disturbed by financial constraints. You, as a caring parent need to choose an investment
and protection package that can cater to all your requirements and can act as a smart
financial tool no matter what uncertainties life unfolds for you.
EFU Life brings you "Noor" - a complete financial planning solution for you to plan
for your children's future education and marriage. The plan helps you accumulate a fund
over a savings period which can be used to finance your children's college or university
education, or marriage expenses.
The two distinguishing features of the plan are:
i.

New unit linked fund with "interst free investments". The investments
include Islamic mutual funds, approved equities, term deposits in Islamic
Banks and Sukuk Bonds. This new fund has been named "EFU
Aitemad Growth Fund" (AGF). As the name suggests, Aitemad (meaning
Trust) outlines the basic philosophy of EFU Life's business and all its
financial planning solutions.

ii.

Allocation of Bonus Units based on experience of the product: At the end

of each year, EFU Life will review the mortality experience of the
product, and in case of a surplus the amount will be distributed back to the

25

clients in the form of "Bonus Units". These Bonus Units will be credited
to the EFU Aitemad Growth Fund to enhance the cash value of the plan.
As a service to society, you may also instruct EFU Life to utilize your
share of the surplus for a social cause and donate it to a charitable
institution.

(b).

Asasa Plan

Life is the greatest divine gift and gives you the opportunity to live it by fulfilling your
dreams. These dreams are your assets and drive you to plan accordingly. Whether it is
your career, marriage, children's education or your retirement, planning for
the future is the key to success. At each step in life you require a financial
planning tool that can fulfill your and your family's needs with certainty.
EFU Life brings you "Asasa" - a high value savings and protection product
that ensures you achieve your dreams for your loved ones.
The two distinguishing features of the plan are:
i.

New unit linked fund with "interst free investments". The investments
include Islamic mutual funds, approved equities, term deposits in Islamic
Banks and Sukuk Bonds. This new fund has been named "EFU
Aitemad Growth Fund" (AGF). As the name suggests, Aitemad (meaning
Trust) outlines the basic philosophy of EFU Life's business and all its
financial planning solutions.

26

ii.

Allocation of Bonus Units based on experience of the product: At the end

of each year, EFU Life will review the mortality experience of the
product, and in case of a surplus the amount will be distributed back to the
clients in the form of "Bonus Units". These Bonus Units will be credited
to the EFU Aitemad Growth Fund to enhance the cash value of the plan.
As a service to society, you may also instruct EFU Life to utilize your
share of the surplus for a social cause and donate it to a charitable
institution.

27

CHAPTER 2

2. ORGANIZATIONAL STRUCTURE

28

2.

Organizational Structure

EFU
EFULife
LifeAssurance
AssuranceLtd
Ltd
Head
Office
Karachi
Head Office Karachi

Punjab
Punjab

N.W.F
N.W.F

Balochistan
Balochistan

Sindh
Sindh

Islamabad
Islamabad

Lahore
Lahore

Peshawar
Peshawar

Quetta
Quetta

Larkana
Larkana

Jacobabad
Jacobabad

Ralwalpindi
Ralwalpindi

Sargodha
Sargodha

Attock
Attock

Dera
Dera
Allahyar
Allahyar

Khairpur
Khairpur

Daharki
Daharki

Jehlum
Jehlum

Faisalabad
Faisalabad
d
d

Abbottabad
Abbottabad

Hub
Hub
Chowki
Chowki

Ranipur
Ranipur

Ghotki
Ghotki

Kotli
Kotli

Multan
Multan

Naushehro
Naushehro

Sukkur
Sukkur

Gujrat
Gujrat

Bahawalpur
Bahawalpur

Sialkot
Sialkot

Khanpur
Khanpur

Gujranwa
Gujranwa
lala

Mandi
Mandi
Bahaudin
Bahaudin

Feroz
Feroz

Nawab
Nawab
Shah
Shah

Rahim
Rahim
Yar
YarKhan
Khan

29

Hyderabad
Hyderabad

CHAPTER 3

3.

STRUCTURE OF THE MARKETING DEPARTMENT

3.1

Number of the employees working in the marketing department

3.2

Marketing Operations

30

STRUCTURE OF THE MARKETING DEPARTMENT

CHAIRMAN
CHAIRMAN
Managing
ManagingDirector
Director&&Chief
Chief
Executive
Executive
National
NationalSales
Sales
Director
Director
Area
AreaDirector
Director
Senior
SeniorRegional
Regional
Manager
Manager
Regional
RegionalManager
Manager
Group
GroupManager
Manager
Field Force Management

3.

Senior
SeniorBranch
BranchManager
Manager
Branch
BranchManager
Manager
Assistant
AssistantBranch
Branch
Manager
Manager
Unit
UnitManager
Manager

Processor
Processor

Senior
SeniorSales
SalesConsultant
Consultant

Cashier
Cashier

Sales
SalesConsultant
Consultant

Helpers
Helpers

31

3.1

Number of Employees Working in the Marketing Department

There are over 100 employees working in the marketing department in Multan. The posts,
which are mentioned here, are needed the sales forces, which are working in the field.

Sr.
No

Designation

No of Sales Force
Required

Targets Per
Quarter

1.

SBM

55

25 lac

2.

BM

36

21 lac

3.

ABM

24

16 lac

4.

UM

14

09 lac

There is following officers are working in Marketing Management Department

Number of S.B.M

Number of B.M

Number of A.B.M

Number of U.M

32

3.2

Market Operations

Marketing Operations Hierarchy

Report to Head Office

Report to Head Office
Karachi.
Karachi.

Senior Branch Manager

Senior Branch Manager
(SBM)
(SBM)

Senior Branch Manager

Senior Branch Manager
(SBM)
(SBM)

Multan
Multan
City
City

U.M
U.M

Multan
Multan
Pioneer
Pioneer

Sahiwal
Sahiwal

Multan
Multan
an
an

Multan
Multan
Cantt.
Cantt.

Multan
Multan
Fort
Fort

A.B.M
A.B.M

A.B.M
A.B.M

A.B.M
A.B.M

B.M
B.M

A.B.M
A.B.M

U.M
U.M

U.M
U.M

A.B.M
A.B.M

U.M
U.M

U.M
U.M

U.M
U.M

33

CHAPTER 4

4. FUNCTIONS OF THE MARKETING DEPARTMENT

4.1

Marketing Strategy

4.2

Product Strategy

4.3

Pricing Strategy

4.4

Distribution Strategy

4.5

Promotion Strategy

34

4.1Marketing Strategy
There are two types of marketing strategies, which are used in EFU Life Ltd.
1.

General marketing strategies

2.

Specific market strategies

1.

General Marketing Strategies

A general description of the type of marketing strategy the organization intends to

employ. There are four steps involving in the general marketing strategies.
a) Positioning strategies
b) Product differentiation strategy
c) Price /quality differentiation strategy
d) Mission marketing strategy

2.

Specific Market Strategies

A detailed description of the marketing mix(es) the firm intends to use to achieve its
objectives. There are four steps involving in the specific market strategies.
a) Product Line
b) Price
c) Distribution
d) Communication
i. Personal selling
ii. Advertising

35

iii. Direct marketing

iv. Sales promotion
v. Public relations

36

4.2Product Strategy
Product Planning, Development & Management

Product development is a strategy that seeks increased sales by improving or modifying

present products or services. Product development usually entails large research and
development expenditures.
Five guidelines when product development may be an especially effective strategy to
pursue are

1.

When an organization has successful products that are in the maturity stage of the
product life cycle; the idea here is to attract satisfied customers to try new
(improved) products as a result of their positive experience with the organizations
present products or services.

2.

When an organization competes in an industry that is characterized by rapid

technological developments.

3.

When major competitors offers better quality products at comparable prices.

4.

When an organization competes in a high growth industry.

5.

When an organization has especially strong research and development

capabilities.

Seeking increased sales by improving present products or services or developing new

ones. Increased competition amongst processors for supermarket tender and also to
compete with supermarkets own product has resulted in increased product innovation
and introduction of new product.

37

EFU Life Ltd. is a traditional competitor in the insurance industry is an emerging market
in Pakistan. Consumers have signaled that they are interested in product of life insurance
as they are prepared to pay premium for modified products.
Management at all levels within an organization must create their own plans utilizing
their own processes to do so. Four types of planning are typically accomplished within an
organization by different levels of management; these include Strategically, Tactical,
Operational and Contingency Planning.

In EFU Life Ltd. Senior Executives of an Organization normally accomplish strategic

planning. Strategic planning involves issues of major Organizational goal setting,
Organizational Values definition, long-term survival, competitive strategy, growth, and
stocks/shares/funds planning.
These Senior Level Executives define the foundation, rules, and values of the company
for all members of the Organization to embrace and lead the company with. Strategic
planning specifically entails the Senior Executives seeking the input of the middle level
and frontline Management to form a top-level plan that contains the proper information
and buy-in of all levels of Management within the Organization. By creating a Strategic
plan in this fashion of utilizing all levels of management; all other managers within the
organization are able to write their plans to best complement the goals and spirit of the
Strategic plan.
The six steps to accomplish the creation of the Strategic plan specifically include:
i.

The establishment of mission, vision, and goals;

38

ii.

The analysis of external opportunities and threats;

iii.

Analysis of internal strengths and weaknesses;

iv.

Strengths;

v.

Weaknesses;

vi.

Opportunities and threats.

39

4.3Pricing Strategy
EFU Life deals individually for all the customers/clients. Mortality charges or risk rates
are adjusted after the observation and checking the documentation. The minimum
contributions annual premium of all products is Rs.15000/- except Capital Growth Fund.
In CGF the minimum initial contribution is

Rs.50, 000/- with no upper limit and the

unit allocation is 100% of investment. The Financial Directors adjust the products price
for the annual premiums. Adjusted premium price is based on the observation and
research which are on
i.

Economy of the country

ii.

Change of life style

iii.

Inflation

iv.

Needs of life

Units Allocation
There are three steps involved in setting the units allocation.
1. Analysis Individually
a)

Age wise

b)

Job/occupation

c)

Medical/health

d)

Family history/life style

2. Price Adjustment
3. Acceptance

40

There are three main elements of investment premium EFU Life Assurance Ltd. that are
P

Protection

Investment

Expenses

Monthly Management Charges

1/8th of 1% or 0.125%

Unit Allocation
Years
1st
2nd
3rd

Unit allocation
35 %
80 %
100 % on ward

Extra Unit Allocation

If the basic premium is over Rs. 20000/- then from 6th years 103 % and from 11th years
105 % units are allocate.
Inflation benefits can be given 5% to 7% of the original premium.

41

4.4Distribution Strategy
There are seven steps involves in the product distribution strategy. These are
i.

Prospecting

ii.

Pre-Approach

iii.

Approach

iv.

Fact-finding

v.

Solution design & presentation

vi.

Handling the objections

vii.

Closing

(i).

Prospecting

The name of people on their own are not Prospects. Although names from the basis form
which Prospects can be found, they are really only suspects until sufficient information
has been obtained to qualify them as Prospects. Prospecting is the process of identifying
people to whom to offer our products and having the characteristics.

Person needs our plans

Person afford it

Eligible for plans (age limit 18 years to 60 years)

42

Medically fit

Easily reachable

(ii).

Pre-Approach

The aim of the pre-approach is not to sell anything. The achievable goal in this stage is to
create interest and to arrange an appointment with the prospect.

(iii). Approach
The approach is the first interview with the prospect. You should normally have made an
appointment for this interview during the pre-Approach phase. The goals of the first
interview are

To develop a good, professional relationship

To explain the services you are offering

To gather as much as possible information about the prospect

(iv). Fact-Finding
In fact finding, highlight the areas of financial needs of a client. For this purpose S.C
needs the following information, which are

43

Personal and Family details

Occupation and Earnings

Retirement planning

Current investment and saving (if any)

44

(v).

Solution Design & Presentation

After highlighting the needs then their solution is present.

(vi). Handling the Objections

Listen carefully if the client asks question, be sincere and give the proper answer
according to your company guideline.

(vii). Closing
The logical time to attempt to close would be right after you have presented your solution
to the prospect and you have determined that the prospect acknowledges those needs and
understandings and agrees with your solution.
The following weekly distribution and promotion activity is recommended.
Field hours

48

Calls

60

Appointment

18

Closing interview

12

Proposals submitted

02

(of which 36 new calls)

45

New reference

24

4.5Promotion Strategy
To reach a target market, the marketer uses three kinds of promotion tools.
1) Communication channels
2) Dialogue channels
3) Monologue channels

1.

Communication Tools

The marketer uses communication tools to deliver and receive message from target
buyers. They include
(i).

News letters

(ii).

Magazines

(iii).

Radio

(iv).

Telephone

(v).

Internets

(vi).

Posters

(vii).

Sales staff

(viii). Greeting cards

2.

Dialogue Tools

(i).

E-mail

(info@efulife.com)

(ii).

Toll free numbers

(0800-33800)

3.

Monologue Tools

(i).

Commercial advertisement on Television

46

CHAPTER 5

Critical Analysis
5.1

Success

and

Failure

Organization in the
5.2

of

Different

Market

Major Competitors of the Organizations

47

Products

of

the

Critical Analysis

The Marketing Department of EFU Life is playing very important role in the economy of
EFU Life Ltd. Marketing department is a backbone of EFU Life. Lot of SC (Sales
Consultant), UM (Unit Manager), ABM (Assistant Branch Manager) and BM (Branch
Manager) are doing work on salary & commission basses. Currently, in 2009, 15 SC
qualify the MDRT in Multan Group. In 1992 to 2009, thousands SC were doing work for
EFU Life. They are provided extra facilities if they sale the policies. These persons
reported to UM officers or under working with other officers, send their daily report to
SBM and Head Principal Office. Then Head Office sees all the reports and makes one
final report about policies all over the Pakistan. Now the Marketing Department follows
these objectives.

Objectives of Marketing Department

The Marketing Department of Multan office is engaged in realizing the corporate goals
vis--vis the marketing operations. The objectives of Marketing Department can be
broadly stated as under:

To secure higher first year premium income.

To provide EFU Life Assurance Protection to large number of people of all walks
of life and in every nook and corner of the country.

To secure higher renewal premium income.

To achieve better persistency ratio.

48

To recruit, supervisor and train educated and dynamic young persons as sales
consultant from all walk of life.

To keep the costs within reasonable limits.

How to Attract New Customers

It is very easy to attract new customers if we have tangible product in hand because we
can tell its tangible benefits/attributes to people. But in case of EFU Life Assurance Ltd.
marketing executives are facing challenges because of product intangibility.

Multan Group Marketing Efforts

The marketing executives at Multan attract new customers through creating believability
among people. According to their views, believability is created through powerful
references. It means they recruit powerful SC from different areas who in turn, encourage
new people to get policies. Honest and trustful SC can minimize the risk of intangibility
at EFU Life Assurance Ltd. and help to increase the sale.

49

5.1

Success & Failure of Different Products of the Organization in the

Market

All the products of EFU Life Ltd. are successful because they are according to the
requirements and needs of the people. They have been designed by keeping in view the
future needs of the people.

50

5.2

Major Competitors of the Organization

There are few companies working in the field of Life Insurance in Pakistan and these
companies are running in one of the system i.e.
1.

Conventional System

2.

Unit Linked System

1. CONVENTIONAL SYSTEM
1. CONVENTIONAL SYSTEM

i)

STATE LIFE

ii)

ALICO (American Life Insurance Company)

iii)

METROPOLITON

iv)

PAKISTAN POSTAL LIFE

2. UNIT LINKED SYSTEM

i).

EFU LIFE ASSURANCE

ii).

NJI

(New Jubilee Life Insurance)

There is another Big Group is launching in the field of Insurance Company is Pak-Qatar
Family Takaful Ltd. This company has already adopted the Unit Linked System.

51

Conventional System
This system is consist of
i).

With Profit

ii).

Without Profit Whole of Life

iii).

Endowment Assurance

2.

Unit Linked System

EFU Life introduced this system in 1994 in Pakistan. It is an Endowment Assurance.

This is transparent and digital system. In this system units are allocated to the life assured
as per current unit offer price. After that this system was adopted by NJI in 1997 and is
working under this system till date.

Offer Price
The price at which policyholder buys the units from the company is called offer price.

Bid Price
The price at which policyholder sells the units to the company are called bid price.

Bid Offer Spread

The difference between offering price and bid price is called bid offer spread. The bid
offer difference is 5%.

52

CHAPTER 6

6.1

Weaknesses of the Marketing Department

6.2

Conclusions & Recommendations

53

6.1

Weaknesses of the Marketing Department

Among the weaknesses are the government interference in investment policies,
(40 %of investment is kept for the security in Stat Bank of Pakistan), it is directly
under the control of the ministry of commerce.
Another problem faced by the Organization is non-professional attitude by the
employees high degree of centralization is also a weakness for the organization.
The major problem of Organization is the persistency of insurance policies, which
means lacking the ability to keep the issued insurance policies enforce for the
long period. The individual life insurance policies are issued for a period of 05 to
50 years on average. At the beginning of each policy maximum effort and
expenditure (about 65% of the first installment) are needed. This means, if the
policy is not continued, the Organization is suffering considerable monetary and
human effort losses.
Training of employees
Lack of communication among various departments.
Retention of sales force is a major problem for EFU because sales force is the
backbone of the Organization.
Loss of sales people means loss of bread earns.
Appropriate delegation of power.

54

6.2Recommendations & Conclusions

Merit certificate should be given on achieving the prescribed volume of renewal
premium.
Attractive brochures should be prepared describing the disadvantages of
surrenders/laps and sent with second year premium notice.
Field workers training are vital to improve performance. Training must be
imparted to all the employees to increase their performance. The persistent efforts
are needed to improve efficiency and productivity of the employees at different
levels of management and the motivations program be initiated to induce the
willingness of the workers to do their best. They should not simply repeat what
earlier generation has done before. Earlier generation has provide them the
runway, now the new generation should take off with only the sky as the limit and
sky has no limits.
As EFU is introducing new products keeping in view the needs of the customers
so EFU Life should give special attention to customer satisfaction.
The company must use national and provincial languages to inform and educate
the people to realize the importance of insurance coverage.
To maximize the coordination and understanding, a management should be
constituted to prepare a comprehensive program or improving general efficiency,
discipline and productivity.
Prompt claim settlement is the best publicity of insurance companies and major
source of customers satisfaction. The main cause to delay in settlement of claim
is that the services of the surveyor are not up to the marks. Inefficiency and

55

irresponsible attitude of the insurance personnel is the other cause that does not
allow settlement of claims. There is a nee to control the system.
EFU Life can play a vital role to develop insurance ideas through advertisement
on the electronic media or targeting the public large.
The role of information technology is very important or the competitive edge of
any business but EFU Life is not fully utilizing the IT resources efficiently, so the
company has to make strong network of computer between the principal offices
all over the country.
The team concept should be adopted by the organization or efficient result in the
business and to increase the over all performance of employees.
The suggestion plan should be introduced by inciting the employees and offices to
give suggestion and new ideas. Each suggestion to be acknowledged and some
prize should be given to encourage the new ideas. It is recommended that the
suggestion plan may be introduced at one level and they are authorized to give
prize up to specified value depending on any suggestion which reduce costs and
improve efficiency, face lifting etc. be given a token prize.
Insurance must be including as a subject at secondary and intermediate level
throughout the country in schools and colleges. It should be compulsory subject at
B.Com and BBA level and the universities should provide opportunities for
specialization in the field of insurance in M.Com and MBA like specialization in
the field of MIS, Marketing, Finance and Banking.
As rural population constitute 70% of the total population, so a good member of
the representatives should be roam the rural areas and they must be trained with

56

advance courses seminars and field assignments, because they are backbone of the
insurance business.
In house courses to improve the supervisory skills of deputy manager should be
conducted.
Urdu

translation

of

the

terms

and

conditions

on

the

policy

documents/supplementary contracts is incorporated.

There is centralization of authority. The directors take all the decisions only. Even
managers on their on behalf cannot take the decision. Because delegation of
authority creates responsibility. If the management will delegate some authority
than managers would feel themselves responsible so they would work with zeal.
By this directors will spend their important time in forming policies and will seek
opportunities for improvement. This will help in creating confidence among the
employees.
It is needed the refresher courses for the employees time to time. So the
employees can do work efficiently. By this productivity will also increase.
There is not any procedure for evaluating the employees and hence there is no
extra benefit to the efficient employees. The management should start some
criteria for the evaluation of employees and there should be some reward for
efficient workers. This reward may be non monetary such as Employee of the
day, Employee of the week, Employee of the year. This will not increase
any monetary burden but will increase the efficiency and productivity of the
employees.

57

 Last thing, I am saying, the Senior Management to EFU Life ltd., in Multan City
to treat with the employees in a good way, not to very harshly or strictly because
in stress environment no body can survive for long time especially for the new
employees. On that time new employees needed the motivation and the proper
guideline and attention for surviving. Unfortunately, deficiencies of these and
stress environment many new employees are left over the job very soon, this is
big loss for the Company because the company spent a lot of money on training
& the refreshment courses of the new and the senior employees.
I recommended for all the Management, for the better result, it is needed to create
the competition and the motivations among the employees. The environment in
the office should be pleasant. This will increase the efficiency and productivity of
the employees.

As the Insurance industry is in crises but EFU Life is performing very well in such
difficult economic conditions. The avenues are always open for further improvement. I
hope that the suggestions given by me will not only benefit the management for getting
business but the employees will also efficient in performing their duties.
The performance of an organization is culture driven and if you want to change the
performance of organization you must change the culture of organization. This factor is
of great importance. The management should try to evolve a culture based on:
Hard work
Honesty
Professionalism

58

 Customer oriented
There is a tremendous growth potential in the life insurance sector, as only 8% market
has been trapped so or against the western countries where almost half the population has
availed of life insurance covers. This can be increased by more benefits to agents.
Organizing a young and willing field force to organize an aggressive and effective team
under the supervision of successful professionals should create a strong base.

59

CHAPTER 7

7.1

References

7.2

Annexes

60

7.1

References

Books Study
Marketing Management by Philip Kotler
International Marketing by Philip R. Cateora

Strategic Management by Fred R. David

Principles of Management by Stephen Robbins

Websites Visit
www.google.com
www.financial-shopper-network.com/life_insurance_history.htm
www.efulife.com.pk
www.pakqatar.com.pk

61

7.2Annexes

62

63

64

65

66