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DEDICATIONS:

We are dedicating this project to the dearest figures in our life:


First of all we will thanks to Allah almighty for the accomplishment of our project
This project is dedicated to our parents, they taught us the best kind of knowledge
to have is that which is learned for its own sake. they taught us that even the largest
task can be accomplished if it is done one step at a time. We are also dedicating our
project to our respected sir Mai Saquib Mahmood who gave us chance to overcome
our abilities in front of you.

EFU GENERAL INSURRANCE


MONEY N BANKING

EXECUTIVE SUMMARY:
In this project on EFU we are concern to do different researches in
our project we have done company description about their vision,
mission, their industries and working of their department. Our
project is basis on:
EFU GENERAL INSURRANCE
MONEY N BANKING

1. Introduction to EFU
i. History
ii. Objectives
iii. Vision
iv. Mission
2. Organizational chart
3. Products/Services of the EFU
4. Departments of the EFU
5. Working of the EFU
6. What is financial analysis
7. Ratio analysis of EFU

For the ratio analysis we have take two year data 2011-2010

INTRODUCTION
The presentation started with the history of EFU. Eastern Federal Union (EFU), the first
insurance company of the Muslims of the Sub-continent. EFU started operating from in 1932 and
also set up offices in London, Ceylon and Palestine. After the partition EFU shifted its office to
Pakistan by establishing its registered office at and Head Office at Karachi. EFU was listed at the
Karachi Stock Exchange in 1949 and was amongst the first seven certified companies of
Pakistan. During 1961-1972, EFU achieved great success and reached tremendous heights of
business, It was the era of Mr. Bhimjee to whom the EFU would always remain indebted. Under
EFU GENERAL INSURRANCE
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his dynamic leadership, every second insured person was an EFU customer and some of the very
best brains of the country were Mr. Saifuddin N. Zoomkawala, Chief Executive and Managing
Director of EFU General was invited to make a presentation on in a joint 102nd event of 21st
Century Business & Economics Club (CBEC), Overseas Universities Alumni Club (OUAC),
21st CBEC Women Forum and Pak-China Business & Economics Forum (PCBEF). It was a
memorable gathering of the people from the corporate EFU introduced Group Term Insurance
for the first time in Pakistan. In 1970 EFU become the largest Life Insurance Company inAfroAsian countries (excluding Japan). Loss of East Pakistan in December 1971 resulted in huge loss
of business. Nationalization of life insurance companies gave another jolt to EFU in 1972. All its
assets were taken over and the EFU was left with only general insurance business. However,
EFU survived and carried on its business. When private sector was allowed to undertake life
insurance in 1992, EFU was the first to establish a separate entity EFU Life Insurance Company
and now enjoys a market share of more then 60% of the private sector life. It is also Pakistan's
first life insurance company, which got ISO 9001-2000 certification. EFU is also the innovator of
Unit Link Life Insurance. JCR-VIS Credit Rating Company Limited has upgraded the insurer
financial strength rating of EFU Life to 'AA-' (DoubleAAMinus) from 'A+' (SingleAPlus) with a
'Stable' Outlook. In 2000, EFU Group launched Allianz EFU Health Insurance Ltd. It is the First
specialized medical insurance company of Pakistan. EFU General has also been adjudged
amongst Top 25 Companies seven times by the Karachi Stock Exchange. It is also the recipient
of 24th Corporate Excellence Award of Management Association of Pakistan. Today, EFU stands
for Brand name in Insurance. Although knowing the fact that coming years of Insurance Industry
will raise countless challenges in the progress of insurance sector but efu wishes to look ahead
and march forward very firmly keeping faith in God and hard work to sustain the commitment
to meet and exceed its stakeholders expectations by modern technology, collective wisdom and
institutionalized

History
The Company was incorporated on September 2, 1932 and is engaged
in non-life insurance business comprising of Property, Marine/Aviation,
Motor and other Miscellaneous products.
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The shares of the company are quoted on Karachi and Lahore Stock
Exchanges of Pakistan.
The Principal place of business is located at EFU House, M.A. Jinnah
Road, Karachi, Pakistan.
EFU is one of the few Pakistani organizations run totally by professional
management and highly motivated field force.
Policies accepted by all institutions in the country.
Rating: Insurer Financial Strength AA, Outlook: Stable (Rating Agency:
JCR-VIS).
Client-base

comprises

of

many

leading

business

houses

and

multinational companies.
EFU gave the emerging insurance industry the leadership, the
manpower and the drive needed to grow in a situation where at one
time, three-fourths of insurance was held by foreign companies.

Vision and Mission STATEMENT


Vision
To continue our journey to be better than the best.
Mission

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To provide services beyond expectation with a will to go an extra


mile. In the process, continue to upgrade technology, human
resource and reinsurance protection

Organizational structure:
Governance:
Governess body of EFU general insurance
Mr. Saifuddin N. Zoomkawala

Mr. Hasanali Abdullah

Chairman

Managing Director & Chief Executive

C/o. EFU General Insurance Limited

EFU General Insurance Limited

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Mr. Rafique R. Bhimjee

Mr. Ali Raza Siddiqui

Director

Director

C/o. EFU General Insurance Limited

C/o. EFU General Insurance Limited

Mr. Abdul Rehman Haji Habib

Mr. Jahangir Siddiqui

Director

Founder, JS Group

C/o. EFU General Insurance Limited

C/o. EFU General Insurance Limited

EFU House, M.A Jinnah Road, Karac


Mr. Muneer R. Bhimjee

Mr. Taher G. Sachak

Director

Director

C/o. EFU General Insurance Limited

C/o. EFU General Insurance Limited

EFU House, M.A Jinnah Road, Karachi

EFU House, M.A Jinnah Road, Karachi

Management:
Management staff of EFU general insurance:
Managing Director
Hasanali Abdullah, F.C.A.
Senior Deputy Managing Directors
Mahmood Lotia, A.C.I.I.
Qamber Hamid, LL.B., LL.M.
Deputy Managing Directors
Abdur Rahman Khandia, A.C.I.I.
Jaffer Dossa
Malik Akbar Awan
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Nudrat Ali
S. Salman Rashid
Senior Executive Directors
Khurram Ali Khan, B.E.
Muhammad Iqbal Lodhia
S. M. Haider, M.Sc.
Shaukat Saeed Ahmed
Executive Directors
Altaf Qamruddin Gokal, F.C.A.
K.M. Anwar Pasha
M. Shehzad Habib
Mohammad Iqbal Dada, M.A., A.C.I.I.
Syed Kamran Rashid
Syed Rizwan Hussain
Kamran Arshad Inam, M.B.A, B.E
Deputy Executive Directors
Abdul Sattar Baloch
Aftab Fakhruddin, B.E., Dip C.I.I.
Darius H. Sidhwa, F.C.I.I.
Imran Ahmed, M.B.A., B.E., A.C.I.I.
Khalid Usman
Khurram Nasim, B.S. (Ins.)
M. Shoaib Razzak Bramchari
Mahmood Ali Khan, M.A.
Muhammad Bashir Seja
Nadeem Ahmed
S. Aftab Hussain Zaidi, M.A., M.B.A.
Salim Razzak Bramchari, A.C.I.I.
Assistant Executive Directors
Abdul Hameed Qureshi, M.Sc.
Ahmed Hussain Zuberi
Ali Kausar
Baqar Aneel Jafari, B.S. (Ins.)
Javed Iqbal Barry, M.B.A., L.L.B., F.C.I.I.
Jawahar Ali Kassim
Jehanzeb Karamat
Kauser Ali Zuberi
Khozema T. Haider Mota
Muhammad Sohail Nazir, M.Sc., A.C.I.I.
Musakhar-uz-Zaman, B.E.
Syed Amir Aftab
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Syed Asim Iqbal, M.B.A.


Syed Basit Hussain
Yawar Aminuddin

Marketing :
Marketing tean of EFU:
Senior Executive Directors
Altaf Kothawala
Jahangir Anwar Shaikh
Executive Directors
Abdul Wahab Polani
Ali Safdar
Muhammad Khalid Saleem
Saleem Tariq Ahmed
Deputy Executive Directors
Agha S.U. Khan
Haroon Haji Sattar Dada
Mir Babar Ali
Assistant Executive Directors
Abdul Wahab
Akhtar Kothawala
Khalid Mehmood Mirza
Shahab Khan
Syed Jaweed Envor
Syed Saad Jafri
Tauqir Hussain Abdullah
Yousuf Alavi

Organizational structure
Organizational structure of Gujranwala branch:

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BRANCE
HEAD

EXECUTIV
E
OFFICER

ASSISTAN
CE
SUPREDIE
NT

JOINT
OFFICER

MARKETIN
G HEAD

Branch head Amir Arif Bahtti


Executive officer Ahmad Aadeem Alvi
Joint officer TAhira Majeed
Assistance Superident Faqeer Mohammad
Marketing Head Asif bhatti

Products/Services of the institution


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AVIATION

MARINE
CARGO

MARINE
MARINE HULL
PERSONAL
ACCIDENT
WORKMENS
COMPENSATIO
N
TRAVEL
ISSURANCE

MISCELLANEO
US

LIABILITY
ISSURANCE

Insurance

MONEY
INSURANCE

MOTOR

CREDIT CARD
INSURRANCE
ENGINEERING
PROPERTY

FIRE

RISK
MANAGEMENT

WHAT IS INSURANCE
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COMPUTER
CRIME
INSURANCE

Life is the name of uncertainty and risk. We are quite sure


about our present and past but God knows what our future
will be. Therefore people living in the society have to device
some way to reduce this uncertainty and risk.
People suffer not only mentally
crises are so bad that they
towards social evils. So one
complications is to help people
word insurance is assurance
meaning

but also financially. Financial


can lead somebody easily
method to avoid all these
financially. The Origin of the
both words have the same

DEFINITIONS OF INSURANCE
Insurance is an agreement by contract to pay money to
someone if something especially a misfortune, such as
illness, death or an accident or a mishap happens to him.
It is a contract in which a person agrees to pay some cost
for the compensation of any misfortune occurring in future.
There are two terms frequently used in insurance, which are
the INSURER (an insurance company, which enter into
contract with the policyholder to compensate in case of any
mishap to him, and the INSURED (who seeks the insurance
coverage on the payment of premium).

Life Insurance:
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It is a written contract between the insured and the insurer. Term


Life: the insured is covered while the policy is in effect, usually
1020 years.
Whole Life: similar to term life, but allows the policyholder to
borrow against the policies cash value. When the term of policy
expires, the insured can get the cash value of the policy
General Insurance:
It is a non life insurance policies, including automobile and
homeowners policies, provides payments depending on the loss
from a particular financial events.
General insurance typically comprises any insurance that is not
determined to be life insurance

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Product and services of EFU


GENERAL INSURRANCE
Aviation:
No one will ever know when mankind first tried to fly, but it is clear that man envied the gift
given by nature to the animal kingdom, that is, the ability to fly. Very large sums are invested in
modern aircraft and their operation. The modern airliners cost large sums. Hence, if
compensation for death or injury has to assessed, this may run to a much larger sums. Even a
small private aircraft may be the cause of a mid-air collision with similar financial consequences.
The failure of a component manufactured by a small company may result in the loss of a fully
loaded airliner. Because such catastrophic loss may arise it is normal for aviation risks to be
excluded from many kinds of general insurance policy.
Buyers of Aviation Insurance

Commercial Aircraft Operators

Corporate and Business Aircraft Operators

Aerial Work and Air Taxi Operators

Private Owners and Flying Clubs

Air-Craft Manufacturers

Owners and Operators of Air-Ports, Hangers

Aircrew

Passengers

Shippers Of Goods By Air

Lessors (Banks, Financial Institutions)

Hang Gliders

Conventional Gliders, Balloons and Hovercraft

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Importance
It has been realized that an increase in speed from 60 m.p.h. to an estimated 1800 m.p.h. in
respect of the new supersonic aircraft, together with their ever-increasing costs would reveal the
amount of money that air-operators, manufacturers and financial enterprises are investing in the
aircraft industry and in civil air transport, and would emphasize the fact that each and every
individual company or enterprise could not afford to lose the whole, or even a part, of their
capital as a result of accident or misfortune. That is why the idea of spreading the risk by
insurance i-s regarded as inevitable, and why aviation insurance enterprises, as well as new
ventures, have been constituted and actively continued.
Types of Covered offered

Aviation Hull All Risks

Hull War and Hijacking

Spare Engines and Spare All Risk

Legal Liability To Passengers

Legal Liability To Third Parties

Legal Liability To Cargo

Legal Liability To Mail

Comprehensive General Liability

Loss Of License

Personal Accident

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Marine :
There are two types of marine insurance:
MARINE

MARINE
CARGO

MARINE
HULL

Marine cargo :
Marine Insurance is said to be Mother of all Insurances.
In Marine Insurance coverage is provided for goods in transit for both Import and Export and the
mode of conveyances on waterways, air and land routes Marine Cargo Insurance is divided
mainly into three segments i.e.
Important
The goods are covered from warehouse to warehouse the contract is usually on C&F and CIF
basis.
Export:
The goods are covered from warehouse to warehouse. The contracts can be CIF and FOB basis.
Inland Transit:
The goods are covered from anywhere in Pakistan to anywhere in Pakistan.
The covers with respect to above segments are granted as per London Institute Cargo Clauses A,
B & C.

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Whereas clause A provides widest and most comprehensive cover while clause C provides
the narrowest scope of cover.

Marine hull:
Construction Risks

During the period of the construction of a vessel, it may be insured with an insurance company
familiar with handling of such insurance. Due to the fact that a Ship-owner's Yard is essentially a
static, non-marine risk, it is possible that basically non-marine insurer will take on the risk of
covering a vessel while it is under construction, but generally it is unsatisfactory. Cover will be
required for a whole period of construction, which may last for two or three years and as the
builder frequently accepts responsibility for the launching of the vessel, its tests, sea-trials and
possibly its delivery voyage, builder's risks policies issued in the marine market include full
marine cover accordingly. The Institute Clause for Builders' Risks provides a comprehensive
form of cover in this respect. Cover can be extended to include War risks but due to the operation
of the "Waterborne Agreement"; the vessel is only insured while she is waterborne i.e. after
launching.
Period of Insurance

The customary practice is to affect Hull policies for a period of 12 months. The clauses contain,
however, the "Continuation Clause" which provides that if at the expiration of the policy the
vessel is at sea, or in distress, or at a port of refuge or of Call, the vessel shall, provided previous
notice is given to the underwriters, be held covered at a pro-rata monthly premium to her port of
destination. This clause provides protection for an insured in the event that vessel was known to
be in a damaged condition at sea or feared lost and the policy was nearing termination, naturally
making it difficult to obtain renewal of the policy. These days most renewals are arranged well
ahead (negotiations frequently commencing two months before expiry) and the need for this
clause has, therefore, been reduced.

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Types of Hull Cover


1.

Institute Time Clauses Hulls: total loss, general average and collision liability
(including salvage, salvage charges and sue and labour)

2.

Institute Time Clauses Hulls: total loss only (including salvage, salvage charges and
sue and labour)

3.

Institute Time Clauses Hulls: port risks and institute time clauses and hulls: port risks
including limited navigation

4.

Institute Voyage Clauses Hulls


Additional Insurance

1.

Institute War and Strike Clauses Hulls Time

2.

Institute Time Clauses Hulls: disbursements and increased value (total loss only,
including excess liabilities)

3.

Protection and Indemnity Associations

4.

Liabilities in respect of Seamen

5.

Liabilities in respect of Passengers

6.

Liabilities in respect of Third Parties

7.

Liabilities arising from Collisions

8.

Liabilities arising from Pollution

9.

Liabilities arising from Wreck Removal

10.

General Averag

Miscellaneous Marine Risks


There are quite a number of other marine risks, such as Ship Repairers' Legal Liability and Ship
Owners' Liabilities (usually to "on deck" shipments covered by "under deck" bill of lading),
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Terminal Operators Liability Insurance and Stevedores Liability Insurance. These represent small
but important areas within the specialized field of Marine Insurance.

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Miscellaneous:
Different types of insurance are categorize in miscellaneous
insurance and they are given and describe below:
PERSONAL ACCIDENT
WORKMENS COMPENSATION
TRAVEL ISSURANCE
LIABILITY ISSURANCE
MONEY INSURANCE
CREDIT CARD INSURRANCE
COMPUTER CRIME INSURANCE
Personal accidents:

Group Personal Accident

Personal Accident cover for individual persons

Family Package gives a discount when the whole family buys one policy

This policy will provide compensation in the event of Death, Permanent Disability or Temporary
Disability due to an Accident. Coverage is worldwide. We can add extra coverage that will pay
for medical expenses resulting from an Accident.

Workmens compensation:
The Workmen's Compensation Act provides no-fault benefits in the event of death or injury to a
'Workman' (normally with an income of less than PKRS 3,000 per month) due to an accident at
work. Employers can protect themselves in case they are required to pay under the terms of this
Act for injury to an employee by purchasing our Workmen's Compensation policy.

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Travel insurance:
Enjoy our 24-Hour Non-Stop Travel care to any destination all around the world which is
specially designed for the travelers traveling abroad. Our Worldwide Travel care offers best
coverage with Immediate Assistance and Direct Settlement of Claims in the Country of
Visit. Travel Insurance Brochure
Being a student going abroad, funds are sure to be tight therefore buying travel insurance can
help you to enjoy your time away from home with a piece of mind. With a suitable insurance
plan in hand, you have an assurance that if some mishaps were to happen related to health,
luggage, belongings or tuition fee then at least you would have your Insurance Company to put
you at ease.
Thus, EFU's student travel insurance can take that extra burden off your shoulders and make you
feel secured. EFU travel insurance plans combine comprehensive travel protection and 24-hours
emergency assistance in the country of visit. Student Travel Insurance Brochure

Liability insurance:
Liability insurance have three basic types.
Public liability insrance.
Any firm or any individual in the normal course of business or other activities may negligently
cause damage to the property of others or injury to others. This may result in that person
becoming legally liable to such persons whose property has been damaged or who have been
injured. Apart from this liability, extensive legal fees may have to be paid. Our Public Liability
Insurance policy will pay all sums which a firm or individual may become legally liable to pay
as compensation for bodily injury or illness caused to third parties.

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Product liability insurance.


Any firm that produces, repairs, services or supplies goods or products may become liable to
users of such goods if these goods are defective in any way and as a result of such defect, the
user may suffer property damage or bodily injury. Our Product Liability Insurance policy will
pay all sums that the producer or supplier becomes legally liable to pay in such a case including
the legal expenses incurred in defending himself in a court of law.

Employers liability insurance.


An employer may become liable to his employee if due to the negligence of the employer the
employee is injured at work. Our Employer's Liability Insurance policy will protect the employer
in such a case and will pay all sums that the employer becomes legally liable to pay to his
employee as compensation. In addition, it will pay for legal fees incurred in preparing a defence
in a court of law. This is similar to Workmen's Compensation Insurance as explained above.

General Professional Indemnity.


Professional lawyers, doctors, engineers, etc. run the risk of becoming legally liable to others as
a result of not properly performing their professional duties. This may include for instance, the
case where a lawyer gives wrongful advice to his client resulting in his client suffering a
financial loss. Our professional Indemnity policy will pay all sums that such a professional
becomes legally liable to pay as a result of professional negligence. In addition it will pay for
legal expenses incurred in preparing a defense in a court

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Plate and glass insurance.


Plate Glass is costly to replace and certain businesses find glass insurance an important part of
their insurance portfolio. This applies particularly to retail shops, department stores, showrooms,
etc. where shop fronts and window displays play an important role in attracting business. The
Glass Policy pays the cost of replacement of all external glass following breakage at the business
premises. The Glass Policy may be extended to cover special types of glass which are very
expensive to replace such as silvered, wired, ornamental, stained, lettered, toughened and
armored glass.

Money insurance
A business may be robbed of cash either during normal business hours or after normal business
hours. Money may be stolen whilst in transit between the bank and the office or on any other
route. Our Cash in Transit, Cash in Safe and Cash in Drawers policy will compensate the
business for such loss. The policy may be extended to cover accidental injury to employees of
the business who may be injured during a holdup.

PLATE GLASS INS

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Product Gujranwala branch


offering:
General insurance:
In general insurance three type of insurance company offers:
Property
Motor
Marine

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factories
property

business
insurran
ce

assets
shops

GENERA
L
insuranc
e

motor

private

LTV

commerci

HTV

al

BY AIR
cargo

BY ROAD
BY
WATER

marine

SHIPS
hull
VESSELS

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BIKES ,
CARS
TRUCK,
BUSES

DEPARTMNETS OF EFU GENERAL


INSURRANCE:
Gujranwala EFU general insurance has different departments some of are given and their
working are explain below:

UNDERWRITIN
G
operation
departments

ACCOUTING

CLAIM

department

genaral
department

HR
DEPARTMENT

MARKET

Underwriting department
Accounting department
Claim department
Marketing department
HR department

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Workings of Departments :
General department:
HR department:
In HR department human resource management is based on. In HR department manager is doing
different type of working such as Job Analysis, Determining wages and salaries, training and
development, implementation organization policies, job description, and many other types of job
are performing by the manager of HR in EFU.

Marketing department:
In the marketing department of EFU Manager Muhammad Arif Bhatti in
working on the main role of marketing department is to act as a guide and to
help the other departments in a company to develop, fulfill and service
products, goods and services for their customers. In the marketing
department in a company, the act and skill of communication is very
important, as this department usually has a better grasp and understanding
of the market and the needs of the customer. The many things Muhammad
Arif Bhatti is focusing in marketing department include; making sure that the
company's products focus on the target customer, keeping an eye on the
competition, creating and promoting a good, strong brand, and looking for
new markets. This department also analyzing the company's ability and
developing strategies that are within those abilities.
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Operating departments:
Undertaking department:
Manager of undertaking department Tehra Majeeb is working. In undertaking department
policies are made on which basis of undertaking they have to issues the insurance policies for the
customers. In undertaking department policies are made on the basis of the recovery claim.
undertaking department is mainly working on making good and better policies for the
organizations..
Claim department:
Manager Muhammad Ahmad Nadeem Alvi .In Claim department is representing its working by
its name claim department. At the time of signings terms and conditions of policies some
undertaking are taken from customers and recovery also include in the terms and condition.
Claim department is the department in which procedure of recovering your damages are claim.
Such as a insured car accident happens then the owner of the car he or she will fill the claim form
and put all the info required by the organization then a team from EFU will survey the car and
after considering term and condition or any agreement between company and customers they
will claim the damage of the customer.

Accounting department:
In the accounting department all the data according to receiving or paying are considered.
Receiving of money from the customers in the form of their installments of their insurance
policies and paying of money on the form of claims of the customers. This accounts department
relates with financial department but it only focus on the receiving of payments, paying of claims
and the branch salaries and their expenses.

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Financial analysis
The process of evaluating businesses, projects, budgets and other finance-related entities to
determine their suitability for investment. Typically, financial analysis is used to analyze whether
an entity is stable, solvent, liquid, or profitable enough to be invested in. When looking at a
specific company, the financial analyst will often focus on the income statement, balance sheet,
and cash flow statement. In addition, one key area of financial analysis involves extrapolating the
company's past performance into an estimate of the company's future performance.
In financial analysis we are assigning to do ratio analysis all the data is taken from EFU general
insurance 2011-2010

Ratio Analysis:
Quantitative analysis of information contained in a companys financial statements. Ratio
analysis is based on line items in financial statements like the balance sheet, income statement
and cash flow statement; the ratios of one item or a combination of items - to another item or
combination are then calculated. Ratio analysis is used to evaluate various aspects of a
companys operating and financial performance such as its efficiency, liquidity, profitability and
solvency. The trend of these ratios over time is studied to check whether they are improving or
deteriorating. Ratios are also compared across different companies in the same sector to see how
they stack up, and to get an idea of comparative valuations. Ratio analysis is a cornerstone of
fundamental analysis.
In this our project we are going to do 5 basis types of ratio:
Liquidity ratio

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Turnover ratio

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Profitability ratio

Financial leverage

Investments Ratio

Liquidity ratio:
A class of financial metrics that is used to determine a company's ability to pay off its shortterms debts obligations. Generally, the higher the value of the ratio, the larger the margin of
safety that the company possesses to cover short-term debts.
In liquidity ratio we have done two tyoes of ratio:

Current ratio
Acid test ratio

Current ratio:
A liquidity ratio that measure company ability to pay short term obligations.
Formula:
Current ratio =

CURRENT ASSETS
CURRRENT LIABILITIES

2011

2010

4214650
Current ratio= 2217000

Current ratio

Answer=1.90

Answer=1.83

Interpetation:
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3461219
1882308

Current Ratio is the comparison of the current assets and the current liabilities. It tells that to
pay Rs. 1 in the current liabilities we have Rs. 1.83 and Rs. 1.90 in the years 2010 and 2011
respectively.

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Acid test ratio:


Liquidity ratio those assets rapidly convert into cash.
Formula:
Acid test ratio=

quick asset
current liabilities

Quick asset = current assets-closing stock- prepaid expenses


2011
Quick asset=4214650 2456531
Ans=1758119

Acid test ratio=

2010
Quick asset=3461219-1754648
Ans=1706571

quick asset
current liabilities

2011

2010

1758119
Acid test ratio= 2217000

1706571
Acid test ratio= 1882308

Ans=0.79

Ans=0.90

Interpretation:
The acid test ratio is the comparison of the quick assets and the current liability. It tells us that
how much we have to pay our current liabilities in the cash or cash equivalents form.

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Turnover ratio:
The percentage of a mutual fund or other investment vehicle's holdings that have
been "turned over" or replaced with other holdings in a given year. The type of
mutual fund, its investment objective and/or the portfolio manager's investing style
will play an important role in determining its turnover ratio.

In turnover ratio will do 2 types of ratio


TATO ( Total assets turnover ratio)
FATO (fixed assets turnover ratio)
TATO:
The amount of sales or revenues generated per RUPESS of assets. The Asset
Turnover ratio is an indicator of the efficiency with which a company is deploying its
assets.

Formula:
TATO=

NET SALES
TOTAL ASSETS

2011
6224495
TATO= 24378038

2010
5846591
TATO 24541669

ANS=0.25

ANS=0.23

INTERPETAION:
TATO tells us that how much revenue is being generated out of the resources we have. The value
reported indicates that the resources are not being efficiently utilized. Even there is more efforts
required to achieve the best results.

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FATO:
A financial ratio of net sales to fixed assets. The fixed-asset turnover ratio
measures a company's ability to generate net sales from fixed-asset
investments - specifically property, plant and equipment (PP&E) - net of
depreciation. A higher fixed-asset turnover ratio shows that the company has
been more effective in using the investment in fixed assets to generate
revenues.

Formula:
NET SALES
FATO= ASSETS
2011
6224495
TATO= 759645

2010
5846591
TATO= 709085

ANS=8.1

ANS=8.2

INTERPETAION:
The fixed assets turnover ratio tells that how many times of the fixed assets are the net sales. The
highest utilization of the resources leads us to the better profitability.

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Profitability ratio:
A class of financial metrics that are used to assess a business's ability to generate earnings as
compared to its expenses and other relevant costs incurred during a specific period of time.
We will discuss 2 type of profitability ratio:

G.P Margin
N.P Margin

G.P Margin:
A financial metric used to assess a firm's financial health by revealing the proportion of money
left over from revenues after accounting for the cost of goods sold. Gross profit margin serves as
the source for paying additional expenses and future savings.
Formula:
G.P =

GROSS PROFIT
100
INCOME

2011
841544
100
G.P= 6224495

2010
G.P=

ANS=0.13 OR 13.5%

ANS= (0.06) OR (6.1)%

(359763)
100
5846591

INTERPRETATION:
The GP margin tells us that what is the ratio of the income to the direct and indirect expenses.

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N.P Margin:
The ratio of net profits to revenues for a company or business segment
Formula:
N.P margin =

2011
560948
N.P= 6224495

net profit
income
2010
(321731)
N.P= 5846591

ANS=0.09 OR 9%

ANS=(0.05)OR(5.5)%

INTERPATION:
NP margin is the operating profit ratio of the business. It tells us that the net profit is less than
10% of the income we have in our organization.

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Financial Leverage:
Any ratio used to calculate the financial leverage of a company to get an idea of the company's
methods of financing or to measure its ability to meet financial obligations. There are several
different ratios, but the main factors looked at include debt, equity, assets and interest expenses.
We are going to discuss 4 types of ratio:

Debt Equity
Debt ratio
Debtors collection period
Debtor turnover ratio

Debt Equity:
A measure of a company's financial leverage calculated by dividing its total liabilities by
stockholders' equity.
Formula:
Debt Equity=

long term debts


equity

Long-term debts= total liability-current liabilities


2011
Long-term debts =14382169-2217000
Ans=12165169

2010
Long term debts = 14950498-1882308
Ans=13068190

2011
12165169
Debt equity= 9995869

2010
13068190
Debt equity= 9591171

Ans=1.21

Ans=1.36

INTERPRETATION:

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Debt to Equity ratio is the measurement of the debt to equity. It tells that how much of the capital
structure is financed by the debt and how much is the equity section.

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Debt ratio:
The debt ratio is defined as the ratio of total debt to total assets, expressed in percentage, and can
be interpreted as the proportion of a companys assets that are financed by debt.
Formula:
debt
Debt Ratio= total assets
2011
14382469
Debt ratio= 24378038

2010
14950498
Debt ratio= 24541669

Ans= 0.58

Ans=0.60

Debtor collection period:


Debtor collection period in how many days payment will receive
Formulas:
no of days averagetrade debts
net credit sales

Debtor collection period=

Average trade debtors=

openingtrade+ closing trade debts


2

2011
2154708+ 2087819
Average trade debtor=
2

2010
Average trade debtor=

Ans=2121263.5

Debtor collection period=


2011
365 2121263.5
Debtor collection=
6224495
Ans=124 days
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2

Ans= 1987165
no of days averagetrade debts
net credit sales
2010
Debtor collection
Ans=124 days
41

365 1987165
5846591

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Debtor turnover ratio:


An accounting measure used to quantify a firm's effectiveness in extending credit as well as
collecting debts. The receivables turnover ratio is an activity ratio, measuring how efficiently a
firm uses its assets.
Formula:
Debtor turnover ratio=
2011
Debtor turnover ratio=

net sales
avg .trade debtors
2010

6224495
2121263.5

Debtor turnover ratio=

Ans=2.93

5846591
1987165

Ans= 2.93

Interpretation:
Debtor turnover ratio tells the relationship between the net sales and the average debtors. It tells
that how many times of the average debtor is the net sales of the organization.

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Investment Ratio
Return on assets:
A ratio used to compare a businesses performance among other industry members. The ratio can
be used internally by the company's analysts, or by potential and current investors. The ratio does
not however include any future commitments regarding assets, nor does it include the cost of
replacing older ones.
Formula:
Return on assets:

net profit
total sales

2011
Return on assets=

2010
560948
24378038

Ans=0.023 or 2.3%

Return on assets=

( 413321)
24514669

Ans=(0.016) or (1.6)%

Return on Equity:
The amount of net income returned as a percentage of shareholders equity. Return on equity
measures a corporation's profitability by revealing how much profit a company generates with
the money shareholders have invested.
Formula:
Return on Equity=

net profit
equity

2011

2010

560948
Return on Equity= 9995869

(413321)
Return on Equity= 9591171

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Ans=0.056or5.6%

Ans=(0.04) or (4.3)%

Earning per share: EPS


That amount company earn on per share sale one share sale is at rs10
Formula:
Earning per share=

net profit
no of s h are

2011
Earning per share=

2010
560948
1250000 /100

Earning per share=

Ans=0.448or4.8%

(413321)
1250000 /100

Ans=(0.33)or(3.31)%

Price to earnings ratio:


market price
Price to earnings ratio= earning price per s h are
2011

2010

38.15
Price to earnings per share= 4.49

(44.04)
Price to earnings per share= (3.31)

Ans=8.5

Ans= 13.30

Interpretation:
Price to earnings ratio tells that how much time of the earnings is the market price per share of
the company. However, over the year the ratio of the price to earnings is decreasing, which may
be the alarming situation. It will ultimately effect the organizational image.

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CONCLUSION:
By the grace of ALLAH ALMIGHTY we become able to complete our project assign by our
respected teacher SIR MIA SAQUIB MAHMOOD. By doing this project we have learn many
different areas of insurance company. EFU is very well establish organization. EFU is top
leading company in General insurance. Working of EFU department is their one of the strengths
of the companies they have divided their work all members of different department giving their
best to make their organization more profitability. There are many products listed at the website
of EFU general insurance but Gujranwala branch is mainly focusing on the 3 main products
thats are describe in our report motor, marine, business. Every organization has its own USP
unique selling point and their USP is the quick response on the claims. Such as Air Blue crash
EFU paid 5million to families of the passengers within no time so thats their USP. EFU hire
very well experienced and educated staff that is also one of the opportunities of the EFU. If we
talk about the Financial Condition of the organization is very good in the year 2011 but in the
year 2010 they are bearing loses as researched according to the financial statements. Last year
2010 they are bearing loses but in year of 2011 they are in profit in at the end of the year 2011
they have generated profit at Rupees 582967 but at the year ended of 2010 they are in loses by
the amount of (321731). We have conclude by our reserch is that working with EFU Is a good
decision because EPS value of EFU is 4.49 in 2011 that is better that the year 2010 (3.31) its
mean company is growing toward high earning per share value. In EFU they work like a family.
Everyone is treated with respect and without any discrimination. They donate to various
institutions in health and education sectors, for improving the lifestyle of common man. EFU
measure their our performance by results but more by quality of service

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References:
For our project we use different references for completing our project
Amer Arif Bhatti
Vice President/ Branch head EFU
0333-8109897
3rd floor Din Plaza G.T Road Gujranwala
http://www.efuinsurance.com/
http://www.investopedia.com/

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Annexure
In annexure we added:

Financial statements
Claims forms

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