The financial experts of EFU General Insurance Limited recorded in the financial statements for the nine months period ended 30 September 2020 that the Written Premium of EFU General Insurance (including Takaful) for the nine months period increased by 2 percent to Rs. 17,307 million (Takaful Contribution Rs. 1,830 million) as compared to Rs. 17,048 million (Takaful Contribution Rs. 1,773 million) for same period of previous year. The experts also recorded that the Net Premium Revenue for the nine months period (including Takaful Net Contribution Revenue) was noted Rs. 7,339 million as compared to Rs. 6,651 million for the same period of previous year. No doubt, EFU General Insurance Limited is Pakistan’s largest and oldest general insurance company, always ready to go the additional mile to serve better. Ever since the company’s establishment in 1932, it has met the issues/challenges of changing times. It has built a diversified customer base, covered more sorts of risks than any other, improved the expertise and delivered on the promises. During 2017 EFU General Insurance counting its Takaful operations has crossed the Premium/Contribution figure of Rs.20 billion. It is the first general insurance company in the history of Pakistan to attain this milestone.
The financial experts of EFU General Insurance also identified in the financial statements for the nine months period ended 30 September 2020 that the overall claims ratio to Net Premium Revenue was 50 percent as against to 47 percent for the same period of previous year. The experts also noted that heavy rains and floods in Karachi and other parts of the country impacted overall underwriting consequences of the company. Karachi experienced 484 mm of rain in August, highest in last 90 years. Investment income (including rental income, profit on deposits and other income) for the nine months period grew by 17 percent to Rs. 1,765 million as against to Rs. 1,506 million for the same period of previous year. The after-tax-profit for the nine months period was recorded to Rs. 1,775 million as against to Rs. 1,293 million for the same period of previous year. The earnings per share (EPS) for the period was also recorded Rs. 8.88 as compared to Rs. 6.46 for the same period of previous year. EFU General is the most powerful trusted brand in the country and is the leading insurer of Chinese infrastructure projects (CPEC) in Pakistan. It has always played a pivotal role of institution, giving the Pakistan insurance industry the leadership, manpower and drive needed to grow and face challenges. The management records that EFU General offers wide range of insurance service to complete all requirements of commercial or individual clients/customers. It offers Fire, Engineering, Marine, Aviation, Motor, Miscellaneous services and Takaful covers. It has a diversified customer base and writes all classes of industrial, commercial risks and caters to retail business like travel insurance, vehicle insurance. Regarding the recognition of EFU General’s services to the industry and the economy of Pakistan, it has also received various awards.
Despite the encouraging signs of economic revival (stable external account), the risk of second wave of Covid-19 is probable to impact the economic activities in Pakistan. However, the latest economic numbers are showing signs of improvement and therefore the experts of the company anticipate improvement in insurance business in the last quarter and beyond. The latest World Bank report forecasts that the GDP growth for fiscal year 2021 is likely to be around 0.5 percent. Different sources also recorded that Pakistan suffers from financial exclusions on all fronts and insurance is no exception. Presently, gross premiums are a paltry 0.9 percent of GDP, against with the regional average of 2.2 percent and the worldwide average of 6.6 percent. Similar to the banking industry, the prime reason for this low-level penetration is that the industry is yet to look at their service from the customer lens. The customer journey from the product, sales also the claim process has main bottlenecks, which have yet to be addressed.
It is also said that in general insurance, the customer-based service is limited to auto insurance, and even the customer uptake is limited and the customer journey is convoluted in Pakistan. Domestic travel insurance, mobile phone theft, mobile phone screen, home and content insurance are virtually non-existent. In neighbouring countries with similar regulations and level of awareness, these services are now very popular. We need to determine the root cause of low penetration in Pakistan. The insurance industry must step back and look at the customer journey and make coverage, premium collection and claim payments transparent. The technology exists to provide the solution, what is required is the vision and the will to implement it.