Jan 16, 2012 | News
Islamabad—The Pakistan Credit Rating Agency (PACRA) has maintained the IFS rating of The United Insurance Company of Pakistan Limited (UIC) at “A” (Single A). The rating denotes strong capacity to meet policyholder and contract obligations. Risk factors are moderate, and the impact of any adverse business and economic factors is expected to be small.
The rating reflects UIC’s strong risk absorption capacity emanating from a robust financial base that adequately supports the company’s high growth stance. The company’s business plan predominantly focuses on wide-spread small sized business volumes. Although this has led to high business acquisition cost, the benefits are accrued in the form of low loss ratio, engendering superior underwriting performance compared to peers. The rating incorporates improved control environment supplemented by real time IT platform.
The rating is dependent on management’s ability to successfully execute its business strategy of diversification and growth, while preserving underwriting profitability. A more structured approach towards claim handling, thereby bringing clarity as to the claims processing and reporting mechanism, would remain critical for the rating. Meanwhile, strengthening of governance framework, bringing further oversight to the corporate strategy, and compliance to
the regularity matters are important. At the occasion, Mian Shahid, Chairman said that UIC will continue to serve masses and boost insurance industry as well as its image in country and abroad. He said that insurance industry is vital part of the economy which needs further support of the government and masses as well. The insurance industry should further efforts to serve masses through corporate social responsibility initiatives, said Mian Shahid.
He said that we are expanding our network by acquiring other companies and a microfinance bank. Established in 1959, is listed on the Karachi Stock Exchange. It is operating through an extensive network of 110 branches covering all major cities of the country (with high concentration in the North region). Aside from the three major types of insurance products available in the market (fire, Marine and Motor), the company is doing Crop, Livestock, and other micro insurance. Majority ownership of the company is held by family and associates of the chairman of BoD, Mian M. A. Shahid. This represents diverse number of individuals, making ownership structure complex.
Oct 17, 2011 | News
Ethical practices by insurance companies, agents stressed
Dishonesty harmful for personal life, fatal in business
Chairman of the United International Group (UIG) Mian Shahid has said that insurance is a good social welfare tool that can have a positive impact on businesses and lives of millions.
Insurance if used properly can help people in hard times by transferring their losses, he said.
Speaking at launching ceremony of UIG News, he said that insurance is popular in west but it is yet to make inroads in the east for which the insurance companies are partly responsible.
He said insurance can only be made popular when companies prefer interests of customers over their own interests and spend part of their profit on social uplift of the dispossessed.
Mian Shahid said that UIG has planned to launch a campaign to create awareness among masses regarding different insurance schemes.
He said that insurance can become a respectable venture if ethics are employed by the companies in an acceptable manner.
Ethics awareness programmes should be a continuous process across the whole insurance industry, he stressed.
For the good of the society, we should embrace a value system comprising honesty and respect for other person which must be the qualifying parameters for any insurance professional.
“Without honesty, there is no chance of a successful business relationship; dishonesty is destructive for personal life and it is disastrous in business,” he said.
There is no law against rudeness but no one would you continue to do business with someone who is rude, he said adding that those who cheat their customers fail soon.
Moral perfection can only be achieved through personal accountability and discipline which seems to be unpleasant in the beginning but pay dividends in the end.
Mian Shahid said that we have to go a long way as far as fair treatment of competitors, full disclosure and faithful control over other people’s money is concerned.
A manager who lacks moral clarity should not expect it from subordinates; he can transform good assistants into mercenaries, he said.
Published in The Nation, Islamabad dated Oct. 17, 2011
Oct 7, 2011 | News
ISLAMABAD: Trend of insuring male members of the family should be changed as putting homemakers and women entrepreneurs to risks amounts to discrimination.
Like many other sectors, insurance industry in Pakistan is excessively focused on males while women are ignored which is unreasonable, said Mian Shahid, Chief Executive Saudi Pak Insurance Company here on Friday during a meeting with Samina Fazil, founder President Islamabad Women Chamber of Commerce (IWCCI).
He said “we should not ignore welfare of women while insurance industry should introduce tailor-made solutions for domestic and businesswomen”.
Women should be enabled to take care of her family and business in times of crisis; they deserve stability and certainty which is possible if they have the opportunity to transfer any loss, he added.
Mian Shahid said that women face a series of problems as soon as they decide to jump into entrepreneurship. These include issues associating to family, society, traditions, customs, values, ethics, motherhood, insecurity, abuse etc.
A male may not require approval of family to start a business while women have to seek many approvals including that from head of family, said Mian Shahid who is also Chairman of Pakistan Society Watch.
Women in rural areas have to suffer more as they face extra resistance from men and they are seen with suspicious eyes which put a break to their growth, he observed.
“We should stop seeing entrepreneurship as a right given only to the male members of society”, Mian Shahid said.
At the occasion, Samina Fazil said that emotion attachment to family and domestic as well as other burdens take away lots of their time and energy, which make it difficult run an enterprise successfully.
Male chauvinism is still the order of the day, women are not treated equal to men, system keeps them rear seat, she added.
Many women remain in dark about the development of new technology, new methods of production, marketing etc which can help them to flourish.
Women also suffer when it comes to raising and meeting the financial needs. Bankers, creditors and financial institutes ignore assistance to women on different unfounded grounds, said Samina.
Women face exploitation by middlemen because they cannot run around for marketing, distribution and money collection.
Intermediaries continue to exploit them in the guise of helping which result in less sales and lesser profit, she said.
Published in Pakistan Society Watch.
Oct 5, 2011 | News
ISLAMABAD – Currently, the insurance penetration into the country is only 0.7 per cent of the GDP, which is one of the lowest in the world while the insurance density is also a mere $6.5 per capita.
Mian Shahid, CEO Saudi Pak Insurance Company, stated this in an exclusive interview with Dateline Islamabad here Tuesday.
Mian Shahid said the lower density of insurance reflected a tremendous scope for substantial development if right macro-environment was estab¬lished and an appropriate regulatory framework was developed.
He said like many other developing countries, the size of Pakistan’s insurance industry was relatively small in proportion to its Gross Domestic Product (GDP).
Despite its relatively small size, Shahid indicated the sector was supported by strong and transparent accounting and actuarial infrastructure. Similarly, he said the reinsurance requirements for the sector were also very clear and well-defined.
Referring to increased terror incidents in Pakistan, he said such events had made it mandatory for people to take protective measures against such mishaps. “Be it business or household security measures must be taken, like appointing security guards or getting insured,” he added.
“In the current turbulent times, insurance is perhaps the best protect ion that property owners can obtain In protect their assets against this rising peril,” he added.
With mounting demand for terrorism insurance coverage in Pakistan, lie said certain leading insurance companies in the country had been able to enter into arrangements with international reinsures.
“These arrangements enable the insurance companies to provide sufficient capacity to meet the requirements of larger business houses and multinational organizations in Pakistan,” he added.
Although, he said the insurance coverage from the losses of terrorism was still rather expensive as compared In the standard fire and allied perils coverage for property as it must be evaluated in view of the rising frequency of terrorism incidents and widening scope of possible targets.
“I even tempted to say that a I present terrorism insurance coverage is more important than the conventional property insurance covering fire and allied perils,” Shahid.
In the current turbulent times, insurance is perhaps the best protection that property owners can obtain to protect their assets against the rising peril.
He said the Saudi Pak Insurance Com¬pany Limited was one of the few companies in Pakistan offering insurance cover from terrorism losses up to Rs25 million.
He said despite economic recession in the country and reduced purchasing power of consumers, if the B2C selling approach was adopted by the insurance companies and small ticket size products were developed, which met the demand in the retail market, the insurance density and penetration into the country could be increased dramatically, thus providing an impetus to the sagging economy.
About the Saudi Pak Insurance Co. Ltd, he said the company started its operations from April 14, 2005 and since then it had managed to emerge as one of the successful companies of the insurance industry.
“Fortunately to its credit, it is jointly supported by the strong Saudi Pak Group and SilkBank Limited, a consortium of Bank of Muscat, Nomura of Japan, IFC and others,” he added.
About the financial health of Saudi Pak Insurance, he said the company had earned net profit of Rs6.1 million during the second quarter ended in June 30, 2011, showing much better performance as compared to the same period of last year during which it had to face losses of Rs7.4 million.
“The performance of third quarter is expected to be better than the second quarter of 2011,” he added.
He said the developed countries were ahead in respect of insurance, as USA, Japan, United Kingdom, France and Germany collectively held 2/3rd of the whole insurance market of the World. “Above all discussion, clearly show where our insurance industry stands,” he added.
He said if Insurance Association of Pakistan (IAP) and insurance companies look corrective measures, there was no way that our insurance industry would reach a point which was called ‘Destination’.
Published in Dateline Islamabad dated Oct. 5, 2011
Oct 3, 2011 | News
A sound insurance system can strengthen the agriculture sector of country and address the menace of food insecurity in Pakistan, an expert said.
Government as well as private sector should take steps to provide protection to life, health and assets of rural people, said Mian Akram Shahid.
Agriculture insurance can address problem of food
insecurity Production, profit, livestock yields of farmers
should be protected
Farmers could be saved from impact of disease, viruses, drought, flood, insects, natural disasters, weather, rains and other risks, he said while speaking at a forum organised by the Pakistan Economy Watch.
Shahid said that agricultural yields could go up by 25-30 per cent if cultivators try improved methods which are also covered. Similarly, Pakistan can have a better livestock yields if proper steps are taken.
Insurance companies need to be encouraged to offer wide range of schemes including crop yield insurance and crop revenue insurance, he said. Some issued impinging on commercial insurers must be tackled.
There should be a mechanism in place to provide training to companies in the area of agricultural risk management and to equip them to identify opportunities and develop products that help mitigate risks, he demanded
Mian Akram Shahid, who is also President of United International Group, said that there is a need to build the capacity of the institutions by providing the knowledge and skills required to design, price and implement agricultural insurance programmes.
Insurance does not and cannot obliterate risk, it spreads risk, he said adding that agri insurance alone was not enough to solve the problems of growers. It is also important to provide farmers with good agricultural practices and services that allow them to improve productivity.
He advised farmers to try to produce more than one product to avoid dependence on the production and price of one product. Diversification is a simple way to avoid some risks, he said.
Sep 30, 2011 | News
A sound insurance system can strengthen the agriculture sector of country and address the menace of food insecurity in Pakistan, an expert said.
Government as well as private sector should take steps to provide protection to life, health and assets of rural people, said Mian Akram Shahid. Farmers could be saved from impact of disease, viruses, drought, flood, insects, natural disasters, weather, rains and other risks, he said while speaking at a forum organised by the Pakistan Economy Watch.
Shahid said that agricultural yields could go up by 25-30 per cent if cultivators try improved methods which are also covered. Similarly, Pakistan can have a better livestock yields if proper steps are taken.
Insurance companies need to be encouraged to offer wide range of schemes including crop yield insurance and crop revenue insurance, he said.