Interview with Mr Zoomkawaka

EXCLUSIVE INTERVIEW

Insurance is the only vehicle in the world that shares in the time of misery Today the key word of progress for any country is Regional Development

Mr. Saifuddin N. Zoomkawala Managing Director and Chief Executive EFU General Insurance Ltd President, Pakistan German Business Forum Profile: SAIFUDDIN NOORUDDIN ZOOMKAWALA Title Held: Chairman, Managing Director & Chief Executive Citizenship & Birth: Pakistani, March 31, 1942 1964 1975 After completion of Business Administration from IBA he joined EFU in 1964 and worked in various capacities of non life insurance company.

1975 1989 In 1975 EFU Group decided to establish a joint venture insurance company in United Arab Emirates. He was posted General Manager of Credit & Commerce Insurance Limited, Dubai, which he helped in establishing and making it one of the largest composite insurance companies of Dubai. The Group decided to sell off its stake to the locals as per the new insurance law of Dubai.

1989 to-date - Managing Director and Chief Executive of EFU General Insurance Limited He came back to Pakistan and took over as Managing Director and Chief Executive of EFU General Insurance Limited in 1989.

Since then he continues to be the Chief Executive of the company.

The premium of this company has gone up from Pak Rs. 282 million in 1989 to Pak Rs. 10 billion in 2010.

Chairman EFU Life Assurance Limited EFU General as a parent company established EFU Life Assurance Limited in 1992 when the Government of Pakistan allowed the private sector to establish life assurance companies.

After the sad demise of Mr. Roshen Ali Bhimjee in 1998 Mr. Saifuddin N. Zoomkawala was elected Chairman of the Company and continues to hold the office till today.

Currently EFU Life is recognized as market leader in the private sector. In the year 2009 EFU Life s gross premium income was over Rs. 7.25 billion. The Company has set up 115 branches throughout the country and employs over 3000 persons in its 30

I&M: Thank you, Mr. Saifuddin Zoomkawala, for sparing time for an interview with Investment & Marketing . Will you share with us your entry into this industry?

Mr. Saifuddin N. Zoomkawala: I always believe that life is an accident. I have seen people aspire to be in some professions and ended up in other professions. I decided to do business administration and joined my father s business .Some friends came to sell insurance policies to my father and approached me to join the insurance industry and that is how I joined the insurance business.

I joined Life Insurance in the year 1964 and then was approached by senior people working in general insurance .In 1967 I was offered an assignment on the permanent basis in general insurance as a Trainee Officer.

Origins and Development of EFU:

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EXCLUSIVE INTERVIEW sales force and about 300 persons at its main offices in Karachi and Lahore.

Chairman Allianz EFU Health Insurance Limited In 2000 EFU group signed a joint venture agreement with Allianz Group of Germany to establish Health Insurance Company in Pakistan. This company is the only company in the country, which underwrites health insurance business for individuals and families. He was elected Chairman of this company on its establishment. The Company has grown considerably and doing good volume of business taking care of health problems of thousands in Pakistan, insuring over 250,000 lives with approximately 400 companies.

Allianz of Germany is the largest investor of Europe owning Dresdner Bank and other major industrial groups and has invested 5 million dollars in Pakistan through this joint venture.

Total EFU Group Insurance Premium was over Rs. 19 billion in 2010.

EXTRA CURRICULAR ACTIVITIES / ACHIEVEMENTS · Director on the Board of Pakistan Reinsurance Company Ltd. · President/CEO Pakistan German Business Forum (2010 2013) · Member Executive Committee, SAARC Chamber of Commerce & Industry · Member Board of Investment, Government of Pakistan · Member Aga Khan Resource Committee · Member Board of Governors Shaukat Khanum Memorial Trust and Research Centre · Member Trustee Burhani Hospital, Karachi · Member Board of Cupola Cares Foundation · Member Board of Directors Fakhr e Imdad Foundation · Member Sub-Committee for Horti-Business Finance, formed

by Ministry of Finance for coordination and implementation of all agri-business initiatives. · Member - Board of the Sindh Institute of Urology and Transplantation, Karachi · Chairman Pakistan Insurance Institute (2009-2010) · Chairman Insurance Association of Pakistan (2005) · Member Task Force, Government of Pakistan for Terrorism Insurance Risk Coverage for Pakistan market. · Member Special Task Force, Government of Pakistan for formulating the New Insurance Ordinance 2002, which is now implemented and enforced. · Member Task Force, for the formulation of Takaful Scheme and Rules for the conduct of Takaful Business in Pakistan. · Created the first and only health insurance company in Pakistan, bringing Allianz of Germany as joint venture partner with FDI of US$ 5 million and introducing Health Insurance for individuals and families for the first time in the country with great success. · Attended various seminars organized in Europe of Economic Forum in general and particularly for Insurance Sector developments.

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In the early 30s of the 20th century, under the inspiration of 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.

In 1932, Mr. Ghulam Mohammad, a far sighted man, established Eastern Federal Union Insurance Company (EFU) with financial assistance from the Aga Khan III and the Nawab of Bhopal. Mr. Abdur Rehman Siddiqui became the founder chairman. The company was originally registered at Kolkata and operated in India (undivided) and Burma.

In 1947, on the birth of Pakistan, EFU found a new home in a new country. In Pakistan, EFU 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 one time, three-fourths of insurance was held by foreign companies.

By 1961, EFU had become the flag bearer of Pakistan's

insurance industry on the world stage, and the largest life company in Afro-Asian countries (excluding Japan) under the leadership of Mr. Roshen Ali Bhimjee. It remained so until 1972 when Life Assurance business in Pakistan was nationalized. Thereafter EFU operated solely as a General Insurance Company, and was subsequently renamed EFU General Insurance Limited. Now EFU General is the second largest non-life insurance company in the country and the mother company of other insurance organizations of EFU Group.

In June 1990 the Government of Pakistan decided to allow Life Assurance business in private sector also. On 18 November 1992, EFU Life was granted a license to carry on life assurance business. It started operations immediately with Group Life products and in March 1994 launched its Individual Life products.

EFU entered the field of life assurance with the focus on the changing needs of the population. The company is committed to provide its policyholders with solutions to the problems of

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EXCLUSIVE INTERVIEW

PGBFÂ’s special interest is to support the growth and development of the small and medium size companies.

today's complex and rapidly changing financial environment by introducing innovative, and modern products.

In March 2000, Allianz Aktiengesellschaft (Allianz AG), a global leader in the insurance industry with an active presence in 70 markets across 5 continents and EFU Group signed a joint venture to form a new company for providing health insurance cover to the people of Pakistan. Allianz EFU Health Insurance Limited, approved by the Government of Pakistan, is the first specialized health insurance provider in the country and aims to play a pivotal role in developing the health insurance market in Pakistan.

Traditionally the EFU name has become synonymous with progressiveness and prompt claim settlement and now the EFU being the largest insurance group provides a full range of general, life and health insurance services.

Role of Mr. Roshen Ali Bhimjee:-

Mr. Roshen Ali Bhimjee found life insurance as a missionary work and to Mr. Bhimjee one of the best moments of his life was to give a claim cheque to a widow. He strongly believed that Life insurance can definitely helped the survivors/dependents of the policy holder. He introduced group insurance for the first time.

Initiatives:

It is very difficult to plan in a country like Pakistan because you cannot predict or forecast what will happen in the future.

It is very difficult to plan in say next 3 years or 5 years. Our companyÂ’s Initiatives and growth will be in Insurance Sector.

EFU initiated a separate health insurance in Pakistan. There is tremendous amount of scope and need for developing health insurance in Pakistan. Health Insurance companies should take

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over health care sector in Pakistan. The government should restrict itself to paying premium and leave it to the insurance companies to manage Health care.

The other Initiatives that need to be taken are in Micro Insurance which is very much required by the poor people in the country who needs protection much more than the rich. The amount involved are very small and insurance companies should have a separate division for micro insurance and should work in collaboration with SMEs and Microfinance banks.

Pakistan being an agricultural country and farmers need protection against various hazards. Crop Insurance is very important for an agricultural country like Pakistan and needs to be further developed. There is also a huge scope of Livestock/Cattle Insurance.

There is also scope to create a reinsurance company in Pakistan. There should be other companies in addition to PakRe. If private sector is shying away the government should take initiatives.

Naturally reinsurance companies cannot survive on Pakistan alone. They should be able to work in multiple countries and hedge their losses. Capital Requirement and Expertise are the two key aspects of Reinsurance. In the beginning joint venture seems like an attractive venture for Pakistan.

Today the key word of progress for any country is Regional Development. In reinsurance we should developed business with the South Asian countries like Sri Lanka, Bangladesh etc. In the South East Asian countries like Malaysia and in the Middle East and may be the central Asian countries. The region should be developed.

Human Resource

At EFU maximum weightage is given to human resources

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EXCLUSIVE INTERVIEW

because every product produced is by humans. It starts from the time an individual is recruited. Insurance personnel need to keep abreast with what is happening all over the world so there needs to be special emphasis on training and development.

The Human Resource needs to be trained and equipped on the technical as well as on the management side. EFU Training Institute trains new recruits and also retrains the existing workforce.

Synergizing with other companies

There is a lot of synergy seen between the companies since the last decade. Synergizing between banks and insurance companies. What has happened is that banks find it very lucrative to sell insurance to their clients and at the same time it is very beneficial for the insurance companies to collaborate with banks.

The Personal line business i.e individuals life insurance, health insurance ,motor car insurance is target market for banc assurance .

Insurance companies specially design products for banks to sell insurance.

The government should regulate and also ensure that banks don t overcharge and make exorbitant money by fleecing their customers.

Banks are not well versed with the insurance terminology: so the insurance companies simplify the products for the banks.

Life Insurance is simple, General Insurance is a bit complex.

There are great incentives for the bank employees; as well.

Nowadays in the life insurance sector almost half of the insurance is done in partnerships with banks.

CSR

EFU takes a lot of Corporate Social Responsibility. It is mainly involved in two sectors that are Health and Education .

Partnering with the Chinese

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China is Pakistan s closest and most reliable ally. China has assisted Pakistan in creating and setting up infrastructure projects like roads, bridges, irrigation and canal systems and Dams.

All these infrastructure projects need to have insurance cover.

We at EFU realize that we have to first understand Chinese business. We are lucky in finding two individuals in Mr.K.M. Anwer Pasha and Mr. M.U. Zaman. First assignment for them was to meet those companies who are involved in infrastructure business in Pakistan. Since then the EFU team has made great progress and have great working relationship with the Chinese companies.

Chinese Construction companies doing business in Pakistan feel comfortable in taking the risk in Pakistan and get reinsurance cover for it in China. So our company has established links with the technical department of those reinsurance companies. Chinese Insurance companies have become giants like Bank of China Insurance, Ping An insurance, China Pacific, and government company like People s insurance company of China etc.

Additional Investment From Germany

In the future there are chances of foreign investment but it all depends on the law and order and economic conditions.

Role of PGBF

As president of PGBF it is my endeavor to increase business ties between Pakistan and Germany. At PGBF there is an exchange of business delegations between the two countries. Germans have always been helpful to Pakistan.

The Board of directors of PGBF meet once a month to discuss strategies and plans to further develop business between the two countries.

Pakistan German Business Forum s special interest is to support the growth and development of the small and medium size companies.

I&M: What are the key issues and problems that you are keen to bring to the attention of the policy makers in Pakistan?

SZ: Pakistan has tremendous potential for growth. Law and order is the major issue. It is a matter of time and eventually we will come out of it. Discipline in every field should also be maintained and endorsed by policy makers to ensure progress of Pakistan.

I&M: Any other issue you like to give your comments on?

SZ: Insurance is international. What makes it International?

It is the risk sharing device known as Re-Insurance. When a loss occurs for example: the devastation caused by the Floods: the risk was shared by reinsurance companies all over the world.

Insurance is the only vehicle in the world that shares in the time of misery. Insurance is the only industry where the whole world cooperates and share with each other.n

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