Chapter 1

State Life Insurance Corporation of Pakistan

1.1 Introduction.
This report is based, upon the, findings, related, to the corporation's, operations, generally,
and specifically, in the Human, Resource, facet. An, eight weeks, internship, was,
conducted,, at, State Life Insurance Corporation of Pakistan, as a human resource intern in
the Abbottabad Zone; as the, fulfillment, of the course requirement, of, the degree of
Bachelor of Public Administration at Hazara University Mansehra. State , Life Insurance
Corporation, of, Pakistan, is the leading, insurance corporation, in Pakistan, because it was
formed, with, a bona, fide reason to benefit the people of Pakistan in a way that domestic
money, should remain inside the, country, and, should, be, invested, in, a better manner,
for, the purpose of infrastructure and development of the country. The assets, of State Life
,Insurance,

Corporation, of Pakistan are worth, over, Rs. 200 Billion, and so is the Life

Fund according to the book value each. State Life Insurance Corporation of Pakistan is
completely owned,, by the ,Government ,of ,Pakistan,, ,and ,acts ,as ,a ,beneficiary
organization for the people of Pakistan. It helps to generate funds for the developmental
projects of the country in such a way that both the policyholders and the management of
the country are benefited. State Life Insurance Corporation of Pakistan has a policy rule
that 97.5 % of the profit is distributed amongst the policyholders whereas the rest 2.5 %
of profit is utilized in the management functions. State Life Insurance Corporation of
Pakistan was formed in 1971 under the article 11 (1) of the Life Insurance
(Nationalization) Order 1972, (President Order No. 10 of 1972); Ministry of Trade,
Federal Government of Pakistan. State Life is a market leader in both the terms i.e. in
growth and as well as in the market shares.

1.2 Purpose of Studying the Corporation

I had ,many ,other ,choices ,to ,conduct ,over ,my ,studies ,but ,still ,I ,chose ,this
,organization ,because ,this ,organization ,was ,completing ,the ,expectations ,that ,I ,had

,from ,any ,of ,the ,organizations,. ,Some ,of ,the ,important ,elements ,which ,were ,made
,necessary ,by ,me ,are ,as ,follows,: ,

1 . 2 . 1 ,Excellent ,Corporate ,Culture,

, , , , ,

,In ,the ,development ,of ,an ,enterprise,, ,the ,corporate ,culture ,plays ,a ,guiding ,role ,in
,consolidating

,employees,,

,enhancing

,the

,commitment

,to

,the

,organization

,and

,satisfaction,, ,encouraging ,employees ,willingness ,to ,work,, ,and ,constraining ,and

,guiding ,the ,behavior ,of ,employees,. ,In ,a ,word,, ,an , ,excellent ,corporate ,culture ,is ,the
,core ,competing ,force ,for ,an ,enterprise ,to ,maintain ,sustainable ,growth,. ,I ,joined
,State ,Life ,Insurance ,Corporation ,of ,Pakistan ,because ,I ,believe ,them ,posses ,and
,maintain ,a ,well ,established ,corporate ,culture ,where ,the ,employee ,values ,and
,standards ,are ,kept ,in ,high ,esteem,. ,

1 . 2 . 2 ,Applied ,Theoretical ,Practices,

, , , , ,

,Since ,State ,Life ,Insurance ,Corporation ,of ,Pakistan ,is ,known ,to ,concern ,systematic
,processes ,and ,procedures ,as ,their ,mode ,of

operation I believe it was a good

opportunity for me to hone my management and marketing skills in an organization

where these skills are highly valued. Besides this they provided me a good opportunity to
act as a human resource person for the complete time period ,of ,eight ,weeks ,and
,provided ,me ,with ,the ,opportunity ,to ,practice ," ,Human ,Resource ,Management,"
,theoretical ,practices ,in ,the ,practical ,form,.

1.2.3 Experience in the Market

In my career in the future Id like to work in the market of Pakistan so it was only natural
that I conduct study ,on ,an ,organization ,that ,has ,its ,roots ,in ,the country ,since ,the
,making ,of ,the ,country ,and ,is ,well ,experienced ,in ,the ,local ,markets,.

1.2.4 Wide Range of Business

State Life Insurance Corporation of Pakistan has wide range of operating ,,, business ,units
,working ,under ,its ,umbrella ,and ,due ,to ,this ,level ,of ,diversification ,a ,lot ,of
,knowledge,, ,experiences ,and ,practices ,are ,transferred ,in ,between,, ,which ,can ,be ,a

very learning experience for an intern. State Life Insurance Corporation of Pakistan has
spread its roots throughout the country such that they had to divide the province in to ,
various Regions, then ,to ,divide ,regions ,into ,Zones,, ,then ,to ,Sub,- ,zones,, ,then ,to
,Sector ,Offices,,

and then to area offices.

Chapter 2
Organization Overview
2.1 Introduction to State Life Insurance Corporation of Pakistan
The, Life ,Insurance ,Business ,in ,Pakistan ,was ,nationalized ,during ,March ,1972,.
,Initially ,Life ,Insurance ,business

of ,32 ,Insurance ,Companies ,was ,merged ,and ,placed

,under ,three ,Bema ,Units ,named ,

,A,, , ,B, ,and , ,C, ,Bema ,Units,. ,However,, ,later

,these ,Bema ,Units ,were ,merged ,and ,effective ,November ,1,, ,1972 ,the ,Management ,of

the Life Insurance Business was consolidated and entrusted to the State Life Insurance
Corporation of Pakistan. State Life Insurance Corporation of Pakistan is headed by a
Chairman ,and ,assisted ,by ,the ,Executive ,Directors ,appointed ,by ,Federal ,Government,.
,Up

to ,July ,2000 ,the ,Corporation ,was ,run ,by ,Board ,of ,Directors ,constituted ,under

Life Insurance (Nationalization) Order 1972. In July 2000, under Insurance Ordinance
2000, the, Federal ,Government ,reconstituted ,the ,Board ,of ,Directors ,of ,State ,Life
which runs, the affair of this Corporation.
2.1.1Objectives

To run life insurance business on sound line.

To run life insurance business on sound line.
To ,provide ,more ,efficient ,service ,to the policyholders.
To ,maximize ,the ,return ,to ,the ,policyholders ,by ,economizing ,on ,expenses ,and

increasing the yield on investment.

To make, ,life ,insurance ,a ,more ,effective ,means ,of ,mobilizing ,national
,savings.

To widen ,the ,area ,of ,operation ,of ,life ,insurance ,and ,making ,it ,available to as
large a section of the, population ,as ,possible,, ,extending ,it ,from ,the
3

comparatively more affluent sections of society to the common man in towns and

villages.
To use ,the ,policyholders ,fund ,in ,the ,wider ,interest ,of the community.

2.1.2Mission
To remain the leading insurer in the country by extending the benefits of insurance to all
sections of society and meeting our commitments to our policy holders and the nation.
2.1.3Quality Policy
To, ,ensure ,satisfaction ,of ,our ,valued ,policyholders ,in ,processing ,new ,business,,
providing ,after ,sales ,service ,and ,optimizing ,return ,on ,Life ,Fund through a quality
culture and to maintain ourselves leading life insurer in Pakistan.

2.2 Board of Directors

Mr. Shahid Aziz Siddiqi

Chairman

Mr. Shafqat Naghmi

Director

Mrs. Spenta Kandawalla

Director

Mr. Aslam Faruque

Director

Mr. Amin Qasim Dada

Director

Mr. Rasheed Y. Chinoy

Director

Syed A. Wahab Mehdi

Director

Syed Hur Riahi Gardezi

Director

Mr. Akbar Ali Hussain

Secretary Board

2.3 Management
4

There, ,is ,a ,huge ,hierarchy ,of ,the ,management ,in ,State ,Life ,Insurance ,Corporation ,of
Pakistan ,and ,there ,are ,thousands ,of ,employees ,working ,under ,its ,umbrella ,it ,some
,of

the, ,important ,managerial ,categories ,are ,mentioned ,below:

2.3.1Chairman
Mr. Shahid Aziz Siddiqi

Telephone

Email

021-99202830

chairman@statelife.com.pk

021-99202870
2.3.2Executive Directors
Syed Arshad Ali

021-99202828

edmkt@statelife.com.pk

Mr. Muhammad Yahya

021-99202843

edpgs@statelife.com.pk

Mr. Shoaib Mir Memon

021-99202875

edcd@statelife.com.pk

Mr.
Khan (Acting)

Muhammad

Izqar

021-99202829

edba@statelife.com.pk

021-99202818

scybrd@statelife.com.pk

021-99202833

dhinv@statelife.com.pk

Secretary Board
Mr. Akbar Ali Hussain
2.3.3Divisional Heads
Mr. Ansar Hussain
General

Manager

Investment
Mr. Sohail Hashmi

021-99206863

General

dhra@statelife.com.pk
Manager

Research & Analysis

Mr. Sher Ali Khan

021-99204582

General

Manager
5

Special

Project

under

Chairman Sectt.
Mr. Muhammad Izqar Khan 021-99202863

dhba@statelife.com.pk

General

Manager

Finance & Accounts

Mr. Abdul Hafeez Sheikh

021-99202871

dhiae@statelife.com.pk

General

Manager

Internal Audit & Compliance

Dr. Muhammad Yousuf

021-99204591

dhpgs@statelife.com.pk

General

Manager

Personnel & General Services

Lt. Col. (Retd.) Mohsin Ali

021-99206168

gmre@statelife.com.pk

General

Manager

Real Estate
Mr. Akbar Ali Hussain
Deputy

021-99202818

scybrd@statelife.com.pk

General

Manager

Corporate Affairs
Mr. Saleem Khaliq
Deputy

021-99204590

dhcd@statelife.com.pk

General

Manager

Information Technology
Mr. Shahrukh Sabzwari
Deputy

021-99204571

dhact@statelife.com.pk

General

Manager

Actuarial
Mr. Nadeem Bessey
Deputy

021-99202890
General

Group & Pension

dhgp@statelife.com.pk
Manager

Mr. M. Yahya Chamadia

021-99202873

Deputy

dhphs@statelife.com.pk

General

Manager

Inspection & Evaluation

Mr. S.H. Kazmi

021-99202851

Deputy

dhmkt@statelife.com.pk

General

Manager

Marketing
Mr. Nabil Ghafoor Zada

021-99202873

Deputy

dhre@statelife.com.pk

General

Manager

Project & Maintenance

Mr. Nasimul Haq

021-99202873

Deputy

dhre@statelife.com.pk

General

Manager

Real Estate Management

Mr. Shahid Aziz Khan021-99202867
Deputy

dhlaw@statelife.com.pk
General

Manager

Legal Affairs
Mr. Faisal Mumtaz
Deputy

021-99202838

dhphs@statelife.com.pk

General

Manager

Policy Holder Services

2.3.4Departmental Heads
Dr. Mrs. Ghazala Nafees
Deputy

021-99202821

dpcma@statelife.com.pk

General

Manager

Medical
Mr. Atta ullah Khan
Deputy

021-99202823
General

Staff Training

dpstd@statelife.com.pk
Manager

Miss Mumtaz Musa

021-99204521

Deputy

dpgs@statelife.com.pk

General

Manager

General Services
Mr. Mohsin Abbas

021-99202857

Assistant

dpfmd@statelife.com.pk

General

Manager

Field Man Power development

Mr. Muzafar Ahmed

021-99202819

Assistant

dpasp@statelife.com.pk

General

Manager

Corporate Communication
2.3.5Regional Chiefs
Mr. Madad Ali Anjum 042-99205121-2

rccentral@statelife.com.pk

General

Manager

Central Region Lahore

Mr. Maqsood Ahmed 051-9204935
Deputy

rcnorth@statelife.com.pk
General

Manager

Northern Region Islamabad

Mr. Tahir Ahmed Khan
Deputy

061-9200670

rcmultan@statelife.com.pk

General

Manager

Multan Region Multan

Mr. S.H.Raza

021-99217035-6

Deputy

General

rcsouth@statelife.com.pk
Manager

Southern Region Karachi

2.4 Business Units of State Life Insurance Corporation of Pakistan

State, ,Life ,Insurance ,Corporation ,of ,Pakistan ,enjoys ,an ,enormous ,position
,throughout ,the

country ,due ,to ,its ,business ,units,. ,In ,each ,of ,the ,region and zone

following business types are being observed.

8

Individual Insurance Plans

Group Insurance Plans
Group Pension Plans
Insurance Plans for Gulf

2.4.1 Individual Insurance Plans

State Life, ,Insurance ,Corporation ,of ,Pakistan ,has ,a ,vast ,number ,of ,insurance ,plans
,for

the individuals. The total number of Insurance Plans offered by State Life Insurance

Corporation of, ,Pakistan ,is ,round ,about ,77,. ,Some ,of ,the ,important ,plans ,are
,mentioned

below with some details about each.

2.4.1.1 Whole Life Assurance Plan

It, ,is ,a ,unique ,combination ,of ,protection ,and ,savings ,at ,a ,very ,economical ,premium,.
,Death ,at ,any ,time ,before ,age ,85 ,years ,terminates ,payment

of premiums and the sum

insured and attached bonuses become payable. In the , event ,the ,insured ,survives ,to the
policy, ,anniversary ,at ,age ,85 ,years,, ,the ,policy ,matures ,and ,the ,sum ,insured ,plus
bonuses ,become ,payable,. ,Under ,this ,plan the rates of bonuses are usually much higher
than the other plans and they help in increasing ,not ,only ,protection ,but ,also ,the
investment ,element ,of ,the ,policy ,substantially,. ,This ,plan ,is ,best ,suited ,for
,youngsters ,who

have ,at ,initial ,stages ,of ,their ,careers ,and ,cannot ,afford to pay high

premiums. Individuals who anticipate requirement of a lump sum in far future ,can ,also
,claim

this plan.

2.4.1.2 Endowment Assurance

Its, ,a ,safest ,and ,surest ,method ,of ,guaranteed ,cash ,provision ,either ,at ,a ,specified
,time ,or ,at ,death ,

(,Allah ,forbid,). ,Under ,these ,policies,, ,the ,sum ,insured ,plus

,bonuses ,are ,payable ,at ,the ,end ,of ,the ,specified ,number ,of ,years ,or ,at ,death ,of ,the
,life ,insured ,if
,death,,

earlier,. Premiums ,are ,payable ,for ,the ,specified ,number ,of ,years ,or ,till

if earlier. The benefits under ,the ,plan ,can ,be ,further ,increased ,by ,attaching
9

,supplementary

covers. For details of supplementary covers, please click here. The plan

serves the requirements ,of ,a ,family ,in ,various ,shapes ,by ,way ,of ,financial ,help at
retirement, education of children or provision of capital for business.
2.4.1.3 Sadabahar Plan
Sadabahar, is ,an ,anticipated ,endowment ,type ,with,-profit plan that provides lump sum
benefit at ,certain ,stages ,during ,the ,premium,- ,paying ,term ,or ,on ,earlier ,death,. In
addition, this plan has a built-in Accidental Death Benefit (ADB) rider so that the
policyholder gets an additional sum assured in case of death due to an accident. This plan
is a safe instrument ,for ,cash ,provision ,at ,the ,time ,of ,need,. ,With ,this ,plan,, the
policyholder can secure greater protection and continued prosperity for the family at an
affordable, ,cost,. ,Admissible ,Ages ,and ,Terms ,this ,plan ,is ,available to all members of
the general public, aged from 20 to 60 years nearest birthday. Both ,males ,and
,femalesmay

purchase this ,plan,. ,Terms ,offered ,under ,this ,plan ,are ,12,, ,15,, ,18,, 21,

24, 27 and 30 years.

2.4.1.3.1 Survival Benefits
On, completion ,of ,one,- ,third ,of ,the ,policy ,term,, ,20,% ,of ,basic ,sum ,assured ,can
,be

taken by ,the ,policyholder,. ,Another ,20,% ,of ,the ,sum ,assured ,can ,be ,taken ,on

completion, ,of ,two,-third ,of ,the ,policy ,term ,and ,the ,remaining ,60,% ,of ,basic ,sum
assured, plus ,accrued ,bonuses , (,if ,any,) ,shall ,be ,payable ,at ,the ,end ,of ,the ,policy
term ,in the ,event ,of ,survival ,of ,the ,assured,. ,If ,the ,option ,to ,withdraw ,an
installment, of 20,% ,sum ,assured is ,not ,exercised ,on ,the ,due ,date ,or ,within ,6
months after ,the ,due ,date,, ,a ,special ,bonus ,will ,automatically ,be ,added ,to ,the
policy, at the ,end ,of ,6 ,months,. ,In ,this ,event,: ,On ,death ,of ,the ,assured ,while ,the
,policy
,Sum

is ,in ,force,, ,the ,special ,bonus ,will ,be ,payable ,in ,addition ,to , (,1,) ,Basic

Assured, (2) ,Other Reversionary ,Bonuses ,accrued ,on ,the ,policy ,and, (3) the

amount ,of any installment left with ,State Life,. On the ,maturity ,date,, ,the ,special
,bonus ,will ,be ,payable ,together ,with ,all ,the ,installments ,of ,the ,sum ,assured
,remaining ,with ,State ,Life,, ,in ,addition ,to ,regular ,reversionary ,bonuses ,accrued
,on

the policy.

10

So ,long ,as ,the ,policy ,remains ,in ,force,, ,the ,policyholder ,may ,surrender ,the
unclaimed, ,installment ,of ,sum ,assured ,together ,with ,the ,related ,special ,bonus,.
The aggregate, cash surrender ,value ,of ,the ,two ,shall ,not ,be ,less ,than ,the ,amount
, ,of

the said unclaimed ,installment. ,The ,reversionary ,bonuses ,as ,per ,usual ,practice

,will

continue to be allotted each year on the basic sum assured (if in force) as and

when Actuarial Surplus is declared. However, the unclaimed installments of the sum
assured and related ,special ,bonus ,will ,not ,participate ,in ,State ,Lifes ,Actuarial
,Surplus,.

2.4.1.3.2 Death Benefits

,The ,full ,basic ,sum ,insured ,plus ,accrued ,bonuses ,are ,payable ,on ,death ,of ,insured
,any ,time ,while ,the ,policy ,is ,in ,force,.
,an

In ,addition,, ,if ,death ,occurs ,as ,a ,result ,of

accident,, ,additional ,amount ,equal ,to ,one ,basic ,sum ,assured,, ,subject ,to

,maximum ,limit,

will ,be paid. ,The usual ,maximum on ,the ADB of Rs. 4 ,million

,will ,apply ,and ,premium ,will ,be ,calculated ,accordingly.

2.4.1.3.3 Bonuses
This ,policy ,will ,participate ,in ,State ,Lifes ,surplus,. ,Rates ,of ,bonus ,applicable
,will ,be ,25,% ,higher ,than ,those ,on ,anticipated ,endowment ,plan,. ,The ,bonuses ,are

announced ,after ,each ,two ,years ,and ,then ,these ,rates ,are ,identified,. ,The ,bonus
,once ,announced ,is ,attached ,to ,the ,policy ,and ,is ,not

removed even if in future loss

is observed.
2.4.1.4Anticipated Endowment Assurance Plan
This ,is ,a ,modified ,form ,of ,endowment ,assurance ,and ,is ,also ,called , ,Three ,Payment
,Plan.

Besides fulfilling ,the ,long,- ,term ,financial needs, it also helps in meeting the

short-term financial exigencies. As the name ,suggests,, ,the ,plan ,offers ,three ,payments
throughout ,term ,of ,the ,policy,. ,The ,plan ,offers ,survival ,benefits ,equal ,to ,25% of sum
insured ,on ,completion ,of ,1,/ ,3rd ,and ,2,/ ,3rd ,term ,of ,the ,policy,. ,If ,the policyholder
does not withdraw the ,survival ,benefits,, ,a ,very ,attractive ,special ,reversionary ,bonus
is available. On completion ,of ,term ,of ,the ,policy,, ,the ,remaining 50% sum insured plus
accrued bonuses shall be payable. If ,the life ,insured ,expires ,during ,term ,of ,the ,policy,
11

sum insured, accrued bonuses,, ,unclaimed ,survival ,benefits ,and special reversionary
bonuses are payable. The ,plan ,is ,suitable ,for ,the ,individuals ,who ,have ,long-term
financial needs but ,also ,anticipate ,requirement ,of ,money ,relatively ,earlier,. ,TPP helps
fulfilling these short-term ,financial ,needs ,without ,terminating ,the ,actual ,contract.
2.4.1.5 Shad Abad Assurance Plan
Shad ,Abad ,Plan ,is ,an ,extended form of ,endowment ,assurance,. ,The ,benefits ,under
the policy increase manifold in ,the ,event ,of ,death ,of the life insured. ,On ,completion ,of
term of policy, ,sum ,insured ,plus ,bonuses ,attached ,to ,the policy are payable,.
,However,,

on death during the policy ,term,, ,the ,death ,benefit ,consists of double of sum

,insured ,with ,accrued ,bonuses,. ,In ,case ,of ,death

,consists

due to accident, the ,death ,benefit

of four times the sum insured ,plus ,bonuses,. ,The ,coverage ,can ,be ,further

,widened ,by ,attaching

,requirements ,of ,those

supplementary covers with the ,policy,. ,This ,plan ,meets ,the

who appreciate the basic savings ,purpose ,of ,endowment

,assurance ,but ,also , ,like

some additional ,cover ,to ,protect ,loved ,ones ,in ,case ,they

,die,, ,Allah ,forbid,, ,before ,maturity.

2.4.1.6 Jeewan Sathi Assurance Plan

This is a joint life ,plan ,and ,covers ,lives ,of ,two ,partners ,say ,husband and wife
simultaneously. ,Premiums ,are ,payable ,till ,the ,end ,of ,the ,specified ,term ,or ,till ,death
,of

either of the insured persons, if earlier. The plan contains extensive benefits; an

overview of which appears as under:On the death of the first life, the sum insured will be
paid to the survivor. Further premiums under the policy will be waived, but the insurance
protection of the second life will continue. Also, the policy will continue to participate in
profits of the Corporation. On death of the second life, again the sum insured will be paid
together with the attaching bonuses. In this event the policy will terminate.
If the second life survives the term of the policy, he or she will be paid sum insured
together with the attached bonuses, even though the sum ,insured ,has ,been ,paid once, on
the ,death ,of ,the first life. If both the lives survive the term of the policy, the sum insured
will be paid to them jointly, only once, together with the attached bonuses. Different
supplementary covers are also ,available ,for ,increasing ,coverage under the policy.JSP is
12

best suited for those married couples who want to enjoy insurance coverage for a
comparatively lesser premium. Moreover, housewives who are otherwise not insurable
can also enjoy the benefits of insurance policy through this plan.
2.4.1.7 Child Education and Marriage Plan
Child Education & Marriage Assurance is a plan for the protection of childs future. It
provides a lump sum benefit for the child at the completion of the policy term. On
completion of term of the policy, full sum insured together with ,the accrued bonuses
become payable to the policyholder. Please click here ,for ,the ,details ,of bonuses
currently available ,for ,this ,plan,. ,If the policyholder ,dies

(,Allah ,forbid) before

completion of the term, a ,family income benefit of ,Rs ,240 ,per ,1000 ,sum ,insured ,per
,annum ,is ,paid

to the child until the ,completion ,of ,policy ,term,. ,Further,, ,future

,premiums ,under ,the ,policy

,insured ,and ,continues ,to
,the ,completion ,of

are waived and policy remains in force with full sum

participate in State Lifes ,surplus ,and ,receive bonuses. Upon

policy term, the child gets two options of either getting the ,proceeds

,in ,a ,lump ,sum ,or ,in

five equal installments.

Continue the policy in the ,same manner ,as ,earlier ,by ,switching ,the ,plan ,for ,the
benefit of another child.Get a refund of ,all ,the ,previous ,premiums ,paid ,till ,the ,death
,of

the child or the cash value of the policy ,, ,whichever ,is ,higher ,and ,terminate ,the

contract.Continue the policy without naming ,another ,child ,in ,which ,case ,the ,benefit of
Refund of Premium will not be available.Child Education & Marriage Plan ,is ,suited ,for
,the ,parents ,who ,are ,conscious ,about ,the ,future ,of ,their ,children,. ,The ,term ,of ,the

plan is such that the lump sum benefit becomes payable when ,the ,child ,attains ,a
,predetermined ,age

of 18, 21 or 25 years. These ages may be selected considering the

occasion at which children generally need ,financial ,assistance ,for ,higher ,education,,
marriage,, ,or ,setting ,up ,business,. ,Depending ,upon ,your ,individual ,needs,, the plan is
available in two separate versions of with and without built-in family income benefit. In
addition to parent, ,this ,plan ,can ,also ,be ,affected ,by ,grandparents,, ,uncles,, ,aunts or
any other person who is paying for the maintenance of the child.
2.4.2 Group Insurance and Pension Plans
13

There are several group and pension plans and each of the plans has its own significance
and characteristics,. ,Some ,of ,the ,plans ,and ,schemes ,are ,mentioned ,below,: ,
,2,. ,4.2.1

Term Insurance Scheme

2.4.2.1.1
Product subscription / features
Group ,Term ,Insurance ,Plan ,provides ,life ,insurance ,coverage ,to ,the ,member ,of a
group, such as the employees of an employer. ,The ,amount ,of ,coverage ,of ,each
,member ,is ,determined

with reference to either his designation or salary or

employment category or some ,other ,similar ,variable,.

2.4.2.1.2
What need does it fulfill?
This plan provides insurance ,protection ,to ,the ,members ,of ,a group at a very
affordable minimum possible cost, 24 hours coverage around the world.By promoting
,a

sense ,of ,financial ,security ,amongst ,the ,employees ,it ,contributes to improving

the working environment for the employer resulting in ,higher ,productivity,. ,In ,most
,cases

the employer is legally obliged to provide insurance cover to ,his ,employees,.

This plan helps the employer to fulfill this requirement,. ,Premiums ,are ,tax,deductible for the employer. Total premium under ,group ,term ,insurance ,is ,lower ,as
,compared ,to ,sum ,of ,premium ,of ,all ,policies ,if ,issued ,individually ,to ,each ,life,,
,due ,to ,savings

in expenses.

2.4.2.1.3
The Benefits of Plan
On death of any insured member the sum assured on his life is paid for the benefit of
his ,surviving ,family,. ,This ,benefit ,is ,payable ,regardless ,of ,the ,total ,number of the
deaths even ,if ,the ,total ,amount ,paid ,out ,exceeds ,the ,total ,premiums ,received
,under ,the ,policy.
,profit

However, if in ,any three,- ,year ,period ,State ,Life ,earns a ,net

on any policy,, ,then ,some ,share ,in ,the ,profit ,is ,passed ,on ,to ,the

, ,policyholder,, ,depending
,share ,can ,go ,up

upon the ,total ,number ,of ,members ,in ,the ,scheme,. ,This

to 90% in case of large sized schemes.

2.4.2.1.4
What riders can be added?
There are many riders that can be ,attached ,to ,this ,plan,. ,Some ,of ,the ,commonly
,attached ,riders ,are ,as

2.4.2.1.4.1

follows:

PTD (Accident) Rider

14

Under this ,rider ,the ,insured ,member ,is ,entitled ,to ,payment ,of ,the ,sum
,assured ,in ,case ,of ,any ,accident ,causing

permanent ,and ,total ,disability,, which

includes loss of ,two ,limbs ,or ,two ,eyes ,or ,loss ,of ,hearing ,in ,both ,ears ,or
,severe ,facial ,disfigurement,. ,If ,the ,disability

is ,permanent ,but ,not ,total ,then

,some ,percentage ,of ,the ,sum ,assured ,is ,payable ,depending ,upon ,the ,severity
,of ,the ,disability,. ,In ,this ,regards ,the ,same ,schedule ,of ,disabilities ,is
,applicable

as is prescribed under the labor laws. In case of a temporary

,accidental ,disability ,causing

,at ,the ,rate ,of

absence from work ,a fortnightly benefit calculated

Rs. 3,000 per month or the monthly ,salary ,whichever ,is ,less ,is

,payable.

2.4.2.1.4.2
A.D.B. Rider
Under this rider the death benefit of an insured ,member ,is ,doubled ,if ,the death
was caused by an accident,.
2.4.2.1.4.3
Natural Disability Rider
Under ,this ,Rider ,if ,an,, ,insured ,member is rendered ,incapable ,of ,pursuing
any occupation or ,vocation ,for ,gainful ,employment ,due to permanent disability
caused by disease or sickness ,then ,he ,is ,entitled ,to ,the ,sum assured as benefit.
2.4.2.1.4.4
Critical Illness Rider
If an ,employee ,contracts ,any ,of ,the ,following ,critical ,illnesses ,while insured
under this rider then ,he ,is ,entitled ,to ,the ,rider ,sum ,assured ,as ,benefit.
Covered critical illnesses ,include.

Heart attack

Coronary Artery by-pass surgery

Stroke

Cancer

Kidney Failure

Major organ transplant such as heart, kidney or liver

The insured member must survive ,for ,at ,least ,31 ,days ,after ,contracting ,the ,illness
,to ,become ,eligible ,for ,the ,benefit,. ,Some ,restrictions ,apply ,during ,the ,first ,two
,years

2.4.2.1.5

of ,coverage,.

Suitable For
15

The ,plan ,is ,suitable ,for ,employers ,who ,desire ,to ,provide ,financial ,security ,to
their employees by means ,of ,insurance ,coverage ,or ,for ,members ,of ,a ,professional
,body ,or ,association ,or ,some ,welfare
,avail ,insurance
,
,2.4.2.2Provident

association ,or ,a ,social ,club ,who ,desire ,to

protection on a ,collective ,basis. ,

Fund Insurance Scheme

The ,provident ,fund ,and ,insurance ,scheme ,is ,a ,plan ,that ,covers ,the ,both ,of ,the
,aspects ,such ,that ,the ,insurance ,and ,the ,benefits ,after ,the ,retirement.

This gives the

risk coverage ,at ,both ,of ,the parts ,that ,is ,it gives one completerisk coverage against the
life and as well as it gives the benefit after if the job has expired or lay off.
2.4.2.2.1
Group Provident Fund Insurance Scheme
Group Provident Fund Insurance Scheme provides life insurance coverage to the
members ,of ,the ,provident fund scheme ,of ,an ,employer. The amount of coverage of
each member depends upon his age and the amount of his provident fund balance at
any time.
2.4.2.2.2
What Needs Does It Fulfill?
,Young employees normally have short ,service to their credit and consequently their
Provident Fund balance is also quite meager. In case of unfortunate death of such a
person the provident fund amount is not adequate for meeting the financial needs of
the family such as schooling of the children, their marriage expenses and housing
accommodation. Group Provident Fund Insurance Scheme is specially designed to
meet such an eventually since the benefits under the scheme are on a sliding scale.
,
,

2.4.2.2.3

The benefits under a typical scheme are as follows:Age

18
31
41
51
56

Bracket
30
40
50
55
59

Benefit
4 times the fund balance.
3 times the fund balance.
2 times the fund balance.
1 time the fund balance.
1/2 times the fund balance.

Table 2.1
16

The younger employees enjoy a higher multiple of the fund balance since the average
amount of their fund balance is smaller but their requirement for insurance is greater.
2.4.2.2.4
Benefits of Group Provident Fund Insurance Scheme
On the death of any member of the provident fund scheme his family is paid a lump
sum amount equal ,to ,the ,amount ,of his fund balance on the date of his death
multiplied by a factor depending upon the age of the employee at death. The factors
applicable ,for ,a ,typical ,scheme ,are already given above however the employer in a
particular case may adjust these ,factors ,to ,suit ,his ,own ,special ,requirements.If the
scheme has 200 or more members then at the end of three years the fund is also
entitled to some share in the profits depending upon the size of the scheme.

2.4.2.2.5
What riders can be added?
Any rider which can be added with group term insurance plan can also be added with
this plan such ADB, PTD (Accident), NDB or Critical Illness Cover.
2.4.2.2.6
Suitable for
The plan is suitable for any employer who maintains a provident fund scheme for his
employees ,and who ,appreciates ,the ,benefits ,of ,providing ,the ,maximum ,possible
insurance coverage to his employees. Some employers may appreciate the benefits of
group insurance but they may avoid higher coverage under their group term insurance
policy since the cost of this coverage would either have to be borne by them or if they
recover the cost from the salaries of their employees then some of the employees
might object to it.For such employers this scheme is very suitable since it does not
require any explicit premium contribution from the employer or the employees,
instead the cost of the scheme is recovered from the annual investment return earned
by the provident fund. In a typical case, if a fund is earning a return of around 12%
per annum, then with the introduction of this scheme, this return may reduce to about
11 or 11 % per annum.
2.4.2.3.House Building & perquisites Insurance Scheme

17

Under this ,plan ,each ,member of the group is insured for the total amount of loan
outstanding against ,him ,inclusive ,of ,accumulated ,interest,. The amount of Insurance is
the actual amount of loan outstanding on the date of death whereas the premium is
charged on the average ,loan ,outstanding ,over ,the ,whole ,policy year.
2.4.2.3.1
What need does it fulfill?
It ,provides ,financial ,security ,to ,employers ,and ,financial ,institutions ,against ,the
risk of untimely death ,of ,any ,of their ,indebted ,employee ,or ,client,. ,Very often the
family of the deceased person is not is a position to repay the loans taken out by him,
especially if the deceased person was the sole breadwinning member of the family. In
such a ,case ,the ,insurance ,coverage ,provides ,an ,assurance ,to ,the ,creditor that ,he
would, be able ,to ,recover ,his ,capital ,without ,causing ,hardship ,to ,the distressed
family. ,The creditor is ,also protected from ,the ,headache ,of ,constantly monitoring
cases of delayed repayments of loan in hardship cases caused by unforeseen death of
a bread winning family member. The premium due under this policy may be
recovered by the creditor from the borrowers along with the loan repayment
installments.
2.4.2.3.2
Benefits of Group House Building & perquisites Insurance
In case of death of an ,insured ,member ,of ,the ,scheme ,the ,total ,amount of the loan
outstanding, against ,him ,including ,accumulated ,interest ,is payable to the
policyholder. ,In case ,State ,Life ,earns ,a ,profit ,on ,any ,policy during a 3-year
period, the policyholder is ,also entitled to ,some ,share ,in ,the ,profits ,depending
,upon

the size of the group.

2.4.2.3.3
What riders can be added?
PTD (Accident) and NDB ,rider ,may ,be ,attached ,with ,this plan. These riders
provide insurance cover against permanent disability due to accidental and natural
causes rendering the insured member unable to earn a livelihood for himself and his
family.

2.4.2.3.
Suitable for
This plan is suitable for employers who have a scheme for providing loans to their
employees for house building, purchases of conveyance or any other goods of
18

household use. It is also suitable for banks that are in the business of granting loans to
their clients for purchase of house or conveyance or for some business venture.
Similarly leasing companies and other financial institutions with similar facility may
find this plan quite attractive.
2.4.2.4. Pay Continuation Scheme
Manpower is still considered as one of the most important elements of productions in
spite of the dramatic growth of microchip based automation in all walks of life, especially
in commerce and industry. The overall efficiency of an organization therefore depends
upon the quality of the manpower of its employees. The more devoted, hardworking and
loyal the employees the higher the reward to the employer in the form of greater
efficiency and profitability. Quality manpower can be attracted by offering a good
employee benefits package based on ensuring security and peace of mind of the
workforce so that a greater commitment is obtained from them. This is why the
enlightened employer pays particular attention to the welfare and well being of their
workforce through various employee benefits scheme.
One of the functions of such schemes is to provide protection to the employees
dependants in the event of his death. Progressive employers do provide group insurance
which pays a lump sum to the dependants. This however does not last long. What is
required in addition is a regular monthly income for a period of time. To meet this
Requirement State Life proudly presents a plan, which offers invaluable protection to the
employees family during his working life. The familys regular monthly income is
protected for 15 years or until age 60 whichever is earlier. In this way coverage is
provided for pay upon the death of the employee. This is illustrated by the following
example:

Suppose the pay of an employee is Rs 2000/- per month. If death takes place at
age 47 then the benefits payable will be Rs 2000/- per month up to age 60, i-e., for

a period of 13 years. Total amount payable Rs.3, 12,000/If death takes place at age 35 then the benefit payable will be 2,000/- per month
for a period of 15 years. Total amount payable Rs. 3, 60,000/19

Annual premiums will be calculated on the basis of the employees pay and his age and
will be payable at the beginning of each scheme year. If this policy qualify for profit
commission it will be payable in accordance with the rules at the end of 3 years.Cover
without medical evidence is allowed on the same basis as group term with the monthly
benefits being converted into a lump sum equivalent. The total of the benefits so arrived
at should, however not the maximum allowable under the policy exceed. The overall
benefit is that if one has come across all the regulations mentioned then even if he is
affected with any of the causes as a result of the recession or any other still he/she shall
be provided with the same amount of salary as agreed in the policy.
2.4.2.5. Group Endowment Insurance Scheme
Group Endowment Scheme is a unique saving and protection scheme through which the
employees of an employer can enjoy insurance protection throughout their service and
also get a lump sum cash amount upon their retirement if they survive up to retirement.
2.4.2.5.1
What Need Does It Fulfill?
In Pakistan most employers do not operate any pension scheme for their employees
although some employers may have a provident fund scheme or a gratuity scheme.
The expected benefits at retirement under a typical provident fund scheme and
gratuity scheme combined are woefully inadequate for a retiring employee for
maintaining his standard of living after retirement unless he supplements these
benefits with his own personal savings. Keeping this in view some employers may
wish to encourage a habit of saving amongst their employees for their own welfare.
Group Endowment Insurance Scheme can be a means of introducing a compulsory
saving scheme for the employees under the sponsorship of the employer. Participation
in the scheme is usually compulsory. However, if participation in the scheme is
voluntary, at least 75% of eligible employees must participate.
2.4.2.5.2
Benefits of Group Endowment Insurance Scheme
Under this scheme each employee is provided insurance protection for an amount
which may be flat or depends upon the designation or salary of the employee. The
amount of insurance is payable on maturity or death if it occurs earlier. In most cases

20

the term of the endowment insurance for each employee is determined in such a way
that the policy matures at or near his retirement date.
2.4.2.5.3
Profit Participation
The endowment insurance is issued on a with profits basis. The same bonus rate is
applicable as for the corresponding individual endowment insurance policies. It gives
risk coverage both at the individual level and as well as the corporate level. If Whole
Corporation needs same benefit simultaneously State Life will still guaranty it.
2.4.2.5.4
Premium Rates
The same premium rates are applicable as for individual endowment policy but with
the added attraction that in group form some volume discounts are also applicable
depending upon the size of the annual premium.

2.4.2.5.5
Surrender Value
The policy acquires Surrender Value in respect of a member after insurance cover has
been enforced for at least two years on that member and no premiums are in default.
2.4.2.5.6
Loan Facility
Under this scheme if the member needs immediate liquidity and a policy has acquired
Surrender Value in respect of member, he/she can avail a maximum loan of 80% of
the net surrender value of the policy.
2.4.2.5.7
Continuation Privileges
If an employee leaves the service of the employer, he can surrender his policy against
the Net Surrender Value. He is also provided with the option of continuing his
endowment insurance coverage in an individual capacity without any evidence of
good health, for the same sum assured and term as he was enjoying during his
service. The premium rates applicable to the policy are the same as are generally
applicable to the same class of business in and individual capacity.
2.4.2.5.8
What riders can be added?
The ADB, PTD (Accident) and NDB can be added to this policy if desired. Against
all these riders additional charges are to be paid by the claimers so that one ensures
the benefits claimed against each of the rider.
21

2.4.2.5.9
Suitable For
This plan is suitable for employers who desire to inculcate a habit of saving amongst
their employees in addition to providing them insurance against premature death.
2.4.2.6.Group Pension Scheme
Foreword we, at State life, have become increasingly aware of the predicament of
progressive employers wanting to better the lifestyle of their employees by providing
financial security and job satisfaction, but not being able to do so, due to lack of
availability of avenues and opportunities. This booklet is a guide to the State Lifes
Pension Scheme that enables an employer to provide substantial benefits to employees
and ensure a higher state of well being for them. It explains the institution, administration
and benefits of the pension scheme and with the help of expert professionals in our
Pensions Division, we can assist you in availing it, in your own and your employees
interest. Our representatives will only be too pleased to be of any service to you.
2.4.2.6.1
Introduction
Once the working life of an individual is over, or he has retired, what will he live on?
This is a question which every individual faces during his working life and is of equal
importance ,to ,a ,concerned ,employer,. ,Personal ,savings,, Provident Fund and
Gratuity are the normal assets he acquires. If not spent prudently, these assets can
fritter away in a short time.State lifes Pension Scheme is the only source which
provides a steady monthly income, when other sources of income stop.This booklet
explains step-by-step the nature of the Pension Scheme, how it operates and what its
benefits are to the employer and the employees.
2.4.2.6.2
What is Pension Scheme
,Basically it ,is ,a saving, or calls it a contribution, which is collected during the
working life ,of an individual and ,invested ,profitably,. After retirement the individual
is entitled to a steady monthly income from a fund built up from ,the ,earlier ,savings,.
,In

a sense, it is a reward to the employee, granted today, while money is to be

received on retirement.
2.4.2.6.3
Why a Pension Scheme
We advise a pension scheme due to following benefits to the Employees:
22

After retirement when the monthly paid check stops, the individual starts

receiving a regular monthly income in the form of a pension.

While contribution to the scheme, the individual gets a tax concession.
The individual, after retirement, need not fear of a drastic reduction in his

standard of living.
All pensions are completely tax-free.
Retirement comes as planned and not abruptly as a shock.

2.4.2.6.4
Benefits to the Employer
The benefits associated to the employer are as follows:
Contributions to the Pension Scheme by the employer are treated as business

expenses and deductible in full.

The knowledge that at the end of the career, the employee will get a regular
pension helps to build up his job loyalty and the adherence to the job, to the

employers satisfaction.
Employer does not have to find money to compensate an employee when he

ceases to work.
Shows that the Management cares for their staff and is concerned about their

welfare.
Attracts new employees.
Retirement of personnel is planned in advance, removing uncertainty both for

the employer and the employee.

Promotion channels in the management hierarchy are unclogged.

2.4.2.6.5
Comparison with Provident Fund and Gratuity
The comparison is given below between the provident fund and gratuity:
2.4.2.6.5.1
Provident Fund
This is like a savings bank. The contribution of the employer as well as the employee
along with interest accumulated over the years is handed over to the employee on his
retirement.However, in case an employee wishes to leave before retirement is due,
employers contribution may not have to be paid; or only part payment may be made.

2.4.2.6.5.2
Gratuity
Gratuity is exclusively the employers contribution for the benefit of the ,employee.
From half to a full ,months ,salary ,is ,credited ,for , , ,every year ,of service. Reserves
23

are set aside in the balance sheet but they do not attract tax concession, unless it is a
funded scheme. The security of the employee to receive the gratuity is dependent on
the continued existence of the employer and his profits, except in case of a funded
scheme.
2.4.2.6.5.3
Pension Scheme
In comparison with the aforementioned two retirement benefits the Pension Scheme
has distinct advantages:
Payments through Pension Scheme are guaranteed for life.
A pensioner can look forward to his retirement with confidence and security.
Pension Scheme is the only method through which regular income accrues to

an employee after retirement.

The payment of the pension is not dependent upon the fortune of the

employer.
Lump sum comparable to those received from Gratuity or Provident Fund, can
still is drawn by commutation or the pension while maintaining a steady
monthly income.

2.4.2.6.5.4
How State Life can help you with the Pension Scheme?
State Life maintains a full-fledged pension Department capable of handling each and
every scheme in the most competent and professional manner. It has actuaries,
lawyers and other experts, besides offering a unified administrative, technical and
investment service. An employer can relieve himself of the tedious and cumbersome
work by using the professional service offered by State Life, the major ones being:

Designing a Pension Scheme according to an employers exact requirements,

in addition to determining the rate of contribution etc.

Preparation of explanatory documents, if required, for consideration by

employees.

Assisting the employers legal advisers with the preparation of Trust deed
and Rules.
24

Providing reasonable assistance in negotiations with the Central Board of

revenue for approval of the scheme.

Maintenance of Individual records of members of the scheme, their

contributions, the employers contribution, and pension accrued etc.

Facilities for payment of pensions, when due

2.4.2.6.6
Security
All policies issued by State Life are guaranteed and enjoy full financial security,
backed by the Government under Article 35 of Life Insurance Nationalization Order
1972.
2.4.2.6.7
Payment of Pension
The pension will be payable by monthly installments; commencing from the
retirement of member and ceases upon his death.
2.4.2.6.8
Guaranteed Payments
By incorporating a Guaranteed Pension period, payment can be ensured for a defined
period say 5 to 10 years, whether or not a pensioner is alive after retirement, if,
however, a pensioner survives the guaranteed period, pension will continue
throughout his lifetime.
2.4.2.6.9
Supplementary Benefits
They may be termed as supplementary, but are indeed those invaluable finishing
touches that make the picture complete. Employees would not feel secure unless their
families were provided for in the event of their untimely demise. At a little extra cost
employees may be given peace of mind by providing these benefits, some of which
are listed below:
2.4.2.6.9.1

Widow's

Pension

(upon

death

in

service)

The pension will be payable to the wife of a member if he dies while in service.
Normally, a widows pension is one half of the members pension entitlement.
2.4.2.6.9.2

WIDOWS

PENSION

(upon

death

after

retirement)

The pension is payable to the wife if the member dies after retirement. In this case
also a widows pension is one half of the pension the member was receiving. The
25

widows pension, in either case would be payable for life but would cease in the event
of remarriage.
2.4.2.6.9.3

Orphan's

Benefits

The inclusion of orphans benefits in Pension Scheme along with the widows
pension, gives the scheme a level of completeness. A normal scale of orphans benefit
is 33% of the widows pension per child, payable upon the childs attainment of age
18 or earlier marriage. Limit is imposed on the number of children who can claim
such benefits.

2.4.2.6.9.4
Retirement Aspects
Pension will be payable to a member according to a predetermined scale on the
normal retirement date fixed by the employer.
2.4.2.6.9.1
Early Retirement
A member who retires before his normal retirement date on account of becoming
incapacitated, or for any other reason, may be granted a reduced immediate pension
to commence on the day following the actual date of retirement.
2.4.2.6.9.2
Late Retirement
A member who remains in employers service after the normal retirement date will
receive an appropriately increased pension on retirement. It will not exceed the
amount of pension even though employee continue to remain employed after the
maturity time period but still the actual amount will be provided.
2.4.2.6.9.3
Withdrawal Benefits
If a member withdraws from the service of the employer before the normal retirement
date due to any reason and without any entitlement to early retirement pension, his
future contribution, or contribution made on his behalf, will cease. Benefits to be paid
on withdrawal will depend upon the withdrawal from service rules of the scheme.
In such a case one of the following procedures may be adopted:
2.4.2.6.9.4

Refund

of

contribution

If a member withdraws from the contributory scheme a refund is made of all the
contributions made by the employee.
26

2.4.2.6.9.5

Deferred

Paid-Up

Pension

A withdrawing member may be allowed a deferred paid-up pension of the amount

accrued to his account on the date of withdrawal. The reduced pension will
commence on his normal retirement date.
2.4.3. Insurance Plans for Gulf
In gulf there is a complete setup of State life insurance corporation of Pakistan that deals
both in the individual plans and as well as group plans. All the plans which are discussed
above are provided in the Gulf for their residents along with the same kinds of benefits.

2.5. Operational Structure

The basic structure of the Corporation consists of Four Regional Offices, Twenty-Six
Zonal Offices, a few Sub-Zonal Offices, 111 Sector Offices, and a network of 461 Area
Offices across the country for Individual Life Insurance; Four Zonal Offices and 6 Sector
Offices with 20 Sector Heads for Group & Pension are involved in the Marketing of Life
Insurance Plans policies and products offered by State Life and a Principal Office. The
Zonal, Offices deal ,exclusively ,with ,Sales ,and ,Marketing,. Underwriting of Life
Insurance Policies and the Policyholders Services. Regional Offices, each headed by a
Regional Chief, supervise business activities of the Zones functioning under them. The
Principal Office, based at Karachi, is responsible for corporate activities such as
investment, real estate, actuarial, overseas operations, etc.Figure 2.1

27

28

2.6. Major Achievements

The major function of the State Life Insurance Corporation of Pakistan is to carry out
Life Insurance Business; however, it is also involved in the other related business
activities such as investment of policyholders fund in Government securities, Stock
market, Real Estate etc. The major achievements of State Life are as under:On the
commencement of the operations, the Corporation took a very important step by effecting
reduction up to 33% in the premiums on the past and potential Life Policies for the
benefit of the Policyholders.State Life is profitable organization and it paid Rs.2.242
billion as dividend to the Government of Pakistan since its inception in 1972.State Life
has played very vital role in the economy by providing employment to the people of the
country as permanent employees and as part of its marketing force and by investing the
huge funds in different sectors of the economy. The Investment Portfolio of State Life as
at 31.12.2007 stands at Rs.161.966 billions.
Investment portfolio also includes investment in Real Estate which stands at a book value
of Rs.2.331 billion as at 31.12.2007 whereas it fair value is around Rs.22.923 billion in
the same period.The Paid up Capital increased from Rs.10 million in 1972 to Rs.900
million in 2007.The Premium income increased from Rs.0.317 billion in 1972 to 18.717
billion in 2007. Similarly Investment income including rental income increased from
Rs.0.81 billion in 1972 to 17.505 billion in 2007.Total statutory fund of State Life stands
at Rs.156.7373 billion in 2007 as against Rs.1.494 billion in 1972.State Life is smoothly
striving towards its objective of making life insurance available to large section of the
society by extending it to common man. As at December, 2007 the total number of
policies enforce under individual life were 2.349 million and number of lives covered
under group life insurance were 4.062 million.

2.7. The Nature of Business

The State Life Insurance Corporation of Pakistan (the corporation) was incorporated in
Pakistan on November 1, 1972 under the Life Insurance Nationalization Order, 1972. The
corporations Principal Office is located at State Life Building No. 9, Dr. Ziauddin
Ahmad Road, Karachi,. ,It ,operates ,in Pakistan through 26 zones for individual life
29

business, 4 zones for group life business and in the gulf countries (comprising of UAE,
Kingdom of Saudi Arabia and Kuwait) through zonal office located in Dubai (UAE).The
corporation is engaged in ,the ,life ,insurance ,business,. ,For ,the ,purpose ,of ,the ,Life
,Insurance

and to attain ,the ,core ,business ,activities ,State Life Insurance Corporation of

Pakistan primarily focus upon its sales team that generate and sustain the business.In the
country there are several ,businesses ,that ,too ,deal ,in insurance stuff and there are a great
potential for the increase in the business and its customers ,but ,at ,the ,moment ,State ,Life
Insurance Corporation of Pakistan is having above 54 percentage of the total market
share throughout the country.

2.8. Main Offices

State Life Insurance Corporation of Pakistan has ample of offices throughout the country
and are countless but still some of the major of the offices are mentioned as follows:
2.8.1. Dera Ismail Khan

State

Life

building,63-P

Circular Road
2.8.2. Faisalabad

State

Life

building

Goal Market,Circular Road

State

Life

building

#2

Liaquat Road
2.8.3. Gujrat

State

Life

G. T. Road

30

building,120-121

2.8.4. Hyderabad

Gul

Center

164 Hyderabad Cantt

State

Life

building

50 Thandi Sarak
2.8.5. Islamabad

State

Life

building

Life

building

Plot

#7

(Phase-1)Blue Area

State

9,33-E

Buland Markaz

Peoples

Media

Foundation

building

Life

building

#5,60-A

Sector G-8 Markaz

State
Blue Area

State

Life

building

on

plot

building

(PhaseI), China Chowk,Blue Area

2.8.6. Karachi

State

Life

&

5A

Abdullah Haroon Road

State

Life

Building

I.I. Chundrigar Road

31

1&

Annex

State

Life

building

#1A,

1B

&

IC

I. I. Chundrigar Road

State

Life

building

2,

2A

&

2B

Wallace Road

State

Life

building

Dr. Ziauddin Ahmed Road

State

Life

building

Shahreh Liaquat

State

Life

building

5C

Zaibunnissa Street, Saddar

State

Life

building

Life

building

Life

building

M. A. Jinnah Road

State
Dundas Road

State
Dr. Ziauddin Road

State

Life

building

#12

Abdullah Haroon Road

Jason

Trade

Center

Shahre- Faisal

State

Life

building

Zaibunnissa Street, Saddar

32

5B

State

Life

building

#11

Abdullah Haroon Road

2.8.7. Lahore

State

Life

building

#1,23

Shahrah-e Quaid-e-Azam

State

Life

building

#2

Lytton Road

State

Life

building

4,

63

Regant St.,Shahra - e Quaid e - Azam

State

Life

building

#5,

63

Regal St. Shahrah-e-Quaid-e Azam

State

Life

building

#6,

building

building

#10,

12

Regal St., Shahrah-e-Quaid-e Azam

State

Life

Macloed Road, Patiala Ground

State

Life

Bank Square, Shahrah-e-Quaid-e-Azam

State

Life

building

Bank Sq., Shahrah-e-Quaid-e-Azam

2.8.8. Larkana

State

Life

1539/2 Ward C,Qaid-e-Awam Road

33

building

2.8.9. Mirpurkhas

State

Life

building

Life

building

1312/1,Ward B
2.8.10. Multan

State
Chowk Nawan Shahar
2.8.11. Peshawar

State

Life

building

#1

The Mall
2.8.12. RawalPindi

State

Life

building

Kashmir Road

State

Life

building

#1

The Mall
2.8.13. Sukkur

State

Life

building

Minara Road

2.9. Major Riders those are attached to various Policies

There are many riders that one can attach to the policy of various kinds but some of the
important riders are mentioned below. The benefits of each rider will be studied in the
later chapters.
o AIB

(Accidental Death & Indemnity Benefit)

34

o
o
o
o
o
o
o

ADB
FIB
WP
H&S
TIR
RPR
GI

(Accidental Death Benefit)

(Family Income Benefit)
(Waiver of Premium Benefit)
(Hospital & Surgical Benefit)
(Term Insurance Rider)
(Refund of Premium Rider)
(Guaranteed Insurability)

2.10 Investments
State Life Insurance Corporation of Pakistan invests its funds in accordance with the
provisions contained in Insurance Ordinance 2000, Insurance Rules 2002 and SRO(309)
K of 1970 as amended to date by the Government of Pakistan.
2.10.1Govt.

Securities

These include instruments issued by Government of Pakistan such as Treasury bills,

Pakistan Investment Bonds etc.
2.10.2Approved

Govt.

Securities

These include instruments as Wapda Bonds, Provincial Securities/TFCs etc.

2.10.3Loans
These include loans in the form of Term finance certificates etc.
2.10.4Equities
These include shares of listed and unlisted companies
2.10.5Immovable

Property

These include buildings, plots etc.

2.10.6Investment Portfolio 2008

Table 2.2

35

As at 31-12-2008
(Rs.
Particulars
Govt.

in

millions)
Portfolio
Securities 126,188

TFCs/Approved Govt. 1,335

Securities

24,097

Equities

15,745

Bank

Deposits 2,437

Investment properties 13,268

Figure 2.2

Policy Loans
183,070

2.10.7. Investment Income

Table 2.3
As at 31-12-2008
(Rs.
Particulars
Govt.

millions)
Portfolio
Securities 13,084

TFCs/Approved

Govt. 149

Securities

2,523

Equities

694

Bank
Investment
Policy

in

Deposits 342
properties 1,308

Figure 2.3

Loans 1,086

Other Income
19,186

36

2.11. Bonuses:
o It is an amount of dividends given to the Shareholders of the Corporation.
o It is not the interest over what one has invested but it is the return on the investment.
o The Bonus rates are not fixed; they are changed after every two years looking at the
earnings of the corporation; such that 97.5 % of earning is provided to the
policyholders in the form of bonuses.
o Besides this some special kinds of additional bonuses are too announced to benefit
the policyholder at maximum.
o For each of the plan there is a changed bonus rate. Some of the bonuses charts are
attached in the appendix 1.

Chapter-3
Human Resource Management
3.1 Structure of Departments
The structure of State life insurance Corporation of Pakistan is the biggest amongst all.
The basic structure constitutes of the following main headings:
3.1.1 Board of Directors
There are five members of the board of directors under whom regional chiefs and whole
corporation operates.
3.1.2 Executive directors
There are four executive directors who works accordingly as the board directs and they
disseminate their orders into the corporate employees.
3.1.3 Regional Chief

37

Regional Chief is the main body to whom each person has to report in order to get the
final targets. There are four main regions throughout the country and each of the regions
in Pakistan has got its own regional Chief. The duties of Regional Chief are to keep
complete information of his region such that assigned targets are being achieved and each
person in the region is working as a group or a team.
3.1.4 Zonal Heads
The second to the Regional Chief is Zonal head. There are 26 zones throughout the
country and each of the zonal head has to coordinate as a liaison between the regional
chief and his zone such that there is complete coordination between all the zones in order
to maintain the success. Zonal Head has maximum powers within the zone and he is
answerable for all the dealings with in his zone.

3.1.5 Sector Head

Each ,zonal ,head ,has ,one sector head that assists him in managing the zone. He is the
liaison between the management ,and ,the ,employees,. ,There are ,111 ,sector ,offices
,throughout

the ,country,, ,but ,there are only 20 Sector Heads who have to take care of

each of the office of group insurance ,and ,pensions ,plans,. ,He ,is ,to ,arrange the
meetings for the targets and ,he ,is ,to ,ensure ,the ,training

, ,for

the new and existing

employees. He enjoys liberty to do majority of the works for the organization like to
increase the motivation by arranging various events and he is the person who monitors
the performance of everyone in the down line.
3.1.6 Sub Zonal Head / HR Manager
Sub,- ,zonal ,Heads are ,the ,people ,who operate the sub zonal offices under each zone.
They are subordinates to both Zonal ,Chiefs ,and ,Sector ,heads ,and ,is ,responsible ,to ,be
answerable for all the events of their zones. Usually big cities are announced as subzones for the purpose of managing the business easily. Recently two new sub-zones are
created in the Hazara Devision under Abbottabad Zone that is Haripur and Mansehra and
both of these are allotted with own sub Zonal Heads. They are the incumbents who are
38

responsible for the regularization of the employees and promoting the same to Area
Managers. HR Managers and Sub Zonal Heads are one and the same thing in said
organization.
3.1.7 Area Managers
There are several of the areas under the zones and each of these is too provided with
separate offices. ,There ,are ,583 area managers who are working under the sector offices.
Area manager is promoted with the efforts of the sales persons themselves. Area manager
is directly the team leader and under him there is a proper team that deals with the
marketing, promotion and sales. He enjoys a unique liberty of permanent salary and the
commissions as well.
3.1.8 Sales Managers
It is a temporary post which is assigned to the senior sales persons such that who are
upgraded from the sales officers but still have not become the area managers or are not
subject to be area managers. They too are paid as on the basis of commissions but the fact
is that they will have to act as a team and as well as individual sales person. Their job is
easier than that of the other sales persons because they get benefit from the sales of the
sales persons under them no matter they work or not.
3.1.9 Sales Officers
Sales person is promoted to be a sales office as he achieves the first two years targets. He
too has the benefit of the commissions and as well as the commissions earned from the
sales of his team. There are at least twelve sales people in this team and each helps him to
achieve his goals.
3.1.10 Sales Person
Sales person is also known as the sales representative and he is the life blood of the State
Life and is responsible for the survival of the corporation in the market. Therefore each
and every person of the State Life has to remain sales person for certain time period or to
achieve certain targets. Sales persons have the toughest job amongst all the employees
39

and have a vast number of it. On the daily basis there are so many sales persons hired to
benefit the company as well as the people and to increase the sales.

3.2 Number of Employees working in the State Life at each level

Although there are so many sales persons who are joining and leaving the organization on
daily basis but still there is a body who monitors at zonal basis that how many people
have been hired and how many have been dropped. Therefore there is no exact number of
the employees working in the state life insurance corporation of Pakistan; still the raw
number of the employees is as under.
Board of Directors:

05

Executive Directors:

04

Regional Chiefs:

04

Zonal Heads:

26

Sector Heads:

111+20 = 131

Area Managers:

583

Besides these there are so many of the sales managers, sales officers and sales
representatives therefore it is difficult to provide their exact numbering.

3.2. Human Resource Management:

Human Resource plays a vital role in the success of every service
organization. The positive attitude could only be created in a conducive
environment, which can make the staff dedicated towards the
organization and its objective.SLIC is the employer of choice. The
whole SLIC family comprises of committed and dedicated members
with passion to serve in their respective ,functional ,areas,. ,The Bank
has challenging work environment where merit and performance help
the individuals to explore their true potential. As a caring employer the
Bank ,enables ,the ,employees ,to ,excel ,and ,grow in highly congenial
40

employment conditions and culture. The career path is full of

challenges and opportunities. The Bank has absolutely open culture
where members share and communicate freely.

3.3 HRM Mission and Values:

The mission of HRM is to provide more talented Human Resource in all
SLIC functional areas in relation to competition keep motivated all the
employees and maintain total industrial harmony.

3.4 SLIC Values:

People make the organization.

People collectively yield results.

People have ambitions and aspirations to be distinguished and

rewarded.

People form the human capital to be developed and invested in.

3.5 Roles of HR Department:

There are lots of roles of Human Resource Management and some of
them are as follows.

HR management helps in recruiting the staff. Their main object is

to search potential candidates. For this they try to attract these
potential candidates by offering good salary package.

HR management also conducts interviews and helps in decision

making for selection of candidates.

HR management plays important role in training the staff. They

identify and select the employees who have the potential and
need training. It helps the employees to be equipped with
required and latest skills.

HR management is also responsible for company's performance.

It set department's objects aligned with organization objectives
and try to achieve the task at required time frame.
41

HR management compensates people and makes a plan to give

rewards to deserving employees.

HR management also helps in solving employees and customers

problems.

The

HR

Department

helps

in

negotiating

with

employees and unions.

HR management

also motivate people/employees which helps

the employees to stick and work for the company for a long time
and make them company's loyal employee.
3.6. Human Resource Planning:
Human resource planning is the process by which management
ensures that it has the right number and kinds of people in the right
places, and at the right times, who are capable of effectively and
efficiently completing those tasks that will help the organization
achieve its overall objectives. Human resource planning then translates
the organizations objectives into the quantity and mix of workers
needed to meet those objectives. Human resource planning can be
condensed into three steps:

Assessing current human resources.

Assessing future human resource needs.

Developing a program to meet future human resource needs.

3.7. HR Practices:
State Life Insurance Corporation of Pakistan adopts a number of HR
practices, that are listed below:
3.7.1 Job Analysis:
Job analysis is the process of defining the jobs within the organization
and the behaviors that are necessary to perform those jobs. What
minimum knowledge, skill, and abilities are necessary for adequate
performance? How the requirements can be fulfilled? These are
questions that job analysis can answer.

42

Information ,obtained ,through ,job ,analysis allows management to

draw up a job description and job specification. The former ,is ,a ,written
,statement ,of ,what

a jobholder does, ,how ,its ,done,, ,and why its

done. It typically portrays job content, environment, and conditions of

employment; ,the ,job ,specification ,states ,the ,minimum acceptable
qualifications an incumbent must possess to perform a given job
successfully,. ,It ,identifies ,the ,knowledge,, ,skills ,and ,abilities ,needed
,to ,do ,the ,job ,effectively,.

The job description and job specification are

important documents when managers begin recruiting and selecting

new hires. The job description is used to describe the job to potential
candidates. The job specification keeps the managers attention on the
list of qualifications necessary for and incumbent to perform a job and
assists in determining whether candidates are qualified.
3.7.2. Job Description:
Each employee will receive a job description from the delegate
detailing specific duties and responsibilities. He/She is required to fulfill
his / her responsibilities as mentioned in the job description. This will
help the organization

Ensuring enhanced individual performance

Monitoring and measuring of achievements

Identifying both high and low performers

Placement of right person on the right job

For each individual employee the duties and responsibilities are

defined in job description, which helps each one to improve his work
because he knows how to perform their duties.
SLIC,in order to achieve its organizational goals, need to have
comprehend understanding of what each job entails and the skills,
abilities and other credentials needed to perform these jobs.

43

3.7.2.1 Annual Job Objective:

The in-house development of Annual Job Objective (AJO) is the priority
project

on

the

agenda.

The

, development

, implementation , of , this , project , can , only

effort

and

ownership

at

grass-root

, and

, subsequent

be achieved through team

level.

AJO

will

assist

the

Management in enforcing principles of merit, accountability, justice

and transparency its core benefits are:
Ensuring enhanced individual performance
Monitoring and measuring of achievements
Identifying both high and low performers
Rewarding high performers
Career planning of employees
Placement of right person on the right job
Development of need based training system
Improving job satisfaction, motivation and employee loyalty
To enable us to make the AJO exercise meaningful, the job
descriptions for all positions will have to be prepared, such as
Regional Business Chief
Regional Operations Chief
Regional Risk Management Chief
Regional Compliance Chief
Branch Managers
Branch Operations Managers
44

In the light of Job Descriptions, job objectives for Executives/Officers

holding different positions in the field as well as at Head Office are to
be prepared.
The above exercise is an integral part for considering future
reward/promotions. With the implementation of the above system,
SLIC had significant improvements in performance and ensure
enhancements in job satisfaction and employee motivation.

3.7.3 Job Specification:

The job specification keeps the managers attention on the list of
qualifications necessary for and incumbent to perform a job and assists
in

determining

specification

whether

must

be

candidates

done

are

according

qualified
to

Job

or

not.

Job

description.

Job

specification is done for the following reasons

To develop the criteria for potential pool of candidates

To select he best among those pool of candidates

To ensure that each candidate has the qualification required for

that job.

The

job

specification

states

the

minimum

acceptable

qualifications an incumbent must possess to perform a given job

successfully.

45

3.7.4 Job Evaluation:

Job evaluation at SLIC is done by the manager depending upon the
performance of the employees. Employees are evaluated with the help
of employee evaluation form which provides the true picture of
employee performance. Each departmental head evaluates the jobs
and ranks it as per criteria. The common grouping to help out in tasks
performance is:

Executives

Officers

Sales Persons

Secretarial staff

Clerical staff

Non clerical staff

3.8 Recruitment and Selection:

The core recruitment objective at SLIC is to attract the high quality
individuals at all levels to fulfill the business needs of each insurance
company unit. The candidates are identified through direct unsolicited
applications, advertisements in the newspapers, hiring services of
head hunters/consultants, retrieving applications from our existing
data bank and employee referrals etc.
The hiring philosophy is based upon merit, and selection procedures
are well defined and systematic. Recruitment/selection focus is to
select the right person for the right job, with strong emphasis on
honesty & integrity besides technical competence.
3.8.1 Recruitment:
Recruitment can be defined as the process of discovering potential
candidates for actual or anticipated organizational vacancies. Every

46

organization

has

its

own

recruitment

policy.

According

to

the

recruitment policy of SLIC, the requirements are:

Candidate must be a citizen of Pakistan

He/She must be adequate enough to have FSC or FA Certification

or relevant degree,

He/She should have attained the age of 18 years but not

exceeded the age of 35 years.

3.8.2 Procedure of Recruitment:

There are certain steps involved in the procedure in recruiting to SLIC.
Applications are invited from candidates on prescribed forms against
the vacant posts advertised in the newspapers. Application forms
received are scrutinized and eligible candidates are called for written
test. Test is conducted and candidates who qualify the written test are
called for interview. Interviews are held at Sector Head office. After that
the candidates have to undergo a medical check up by the prescribed
doctor. Appointment letters are sent to the selected candidates, who
have to present themselves before the Head Office for signing the
following documents.

Secrecy Bond

Security Bond

Service Agreement Bond

Appointed candidates are kept on probation for 3 months.

3.8.3 Recruitment Sources:
Recruitment is the process of locating, identifying, and attracting
capable applicants. Which sources management uses depends on the
type or level of the job and the state of the economy. The greater the
skill required or the higher the position in the organizations hierarchy,
the more the recruitment process will expand to become a regional or
national search.
47

There are two sources of recruitment:

3.8.3.1 Internal Recruitment
Current Employees

Former Employees

3.8.3.2 External Recruitment

Direct Recruitment (Advertisements)

Employee Referrals

College Recruiting

Customers

3.8.4 Recruitment Criteria:

There are mainly four categories of personnel required for induction in
SLIC. Details are enumerated as under:
3.8.4.1 Experienced Insurers:
The bank has to rely on induction of trained manpower available in the
market. These insurers are selected from those who either approach
directly or respond to the advertisements, in different grades
commensurate with their qualifications and experience.
3.8.4.2 Management Trainee Officers:
The intake of young and qualified university graduates into any
organization, on a regular basis, is a commonly practiced ,management
,technique,.

,The

,purpose

,is

to establish a solid contact with the

developments of the outside world by injecting fresh blood. These

young employees bring in an amalgam of knowledge and talent and
also help create an environment, within the organization, that is live
with enthusiasm and novel ideas.
3.8.4.3Technical supporting staff:
For recruitment of such staff while priority is given to the candidates
from insurance companies and financial institutions, yet applicants
from other autonomous, semi-autonomous and private institutions,
48

who have good knowledge and exposure in the respective fields are
also screened and selected. Some of the major classes in this category
are:

Secretaries

Typists

Assistants / Clerks

Computer Operators

3.9. Recruitment Procedure:

As a part of our manpower development plan and depending upon the
advance information available about permission for opening of new
branches, aFORECAST shall be prepared, spelling out the manpower
requirements. Taking stock of the existing applications, which have
already been scrutinized and the desirable candidates are short-listed.
3.9.1. Advertisement:
Advertising requirement is given in the information media if required.

Ads are given in two daily National Newspapers (Colored

newspaper)

Online advertisements

Conducting a "Talent Hunt" in the local market.

3.9.2 Job Description Documents:

JDDs is a cornerstone of a meaningful employment relationship with
each individual employee. For a company to achieve its organizational
goals, it needs to have a full and complete understanding of what each
job entails and the requisite skills, abilities and other credentials
needed to perform the job. The employees, on the other hand, to
perform well on the job, need a clear comprehension of the different
functions and job responsibilities they have been assigned. This allows
them to direct their energy and skills to maximum advantage, and lays
the

framework

for

an

equitable
49

and

effective

performance

management

system.

Human

Resource

Division

now

maintains

updated Job Description Documents for each unique role or position in

the organization. It may please be noted that No Changesin the Organ
grams/Structure/Reporting Lines or Job Description Documents can be
made without prior approval of HRD. All employees are, therefore,
advised to refrain from making any changes to these documents. In
case certain changes are required in the document/structure, the same
may please be intimated to HRD, which shall send its approval of the
same after due consideration. Line Managers/employees may print
JDDs pertaining to their job role/position and get them signed off from
their Line Managers. Whenever new employee joins the bank, his/her
JDD should be printed from the Intranet and singed copy must be sent
to HRD. Similarly, whenever employee has been assigned a new Job
e.g. upon transfer, the new JDD must be signed off and submitted to
HRD. In short, each employee must have a signed off copy of his/own
JDDs of the duties that he/she is performing. This document will be
utilized throughout the year for performance planning, monitoring and
evaluating.

3.10. Selection Procedure:

Having obtained relevant information about candidates and carrying
out a detailed scrutiny of their service record, proper synopsis will be
prepared

for

each

Branch/location.

The

encompass following information

a) Personal Data
b) Academic and professional qualifications.
c) Experience/existing salary
d) Likely designation/salary to be offered.

50

synopsis

will

generally

3.10.1. Venue Selection:

Having completed all formalities specified above, the time and venue
for selection would be determined and intimated to the selection
board/committee and the candidates in advance.
3.10.2. Basis of Selection:
While interviewing the candidates, each member of the Selection
Committee gives his opinion on Interview Feedback Report or CV.
Selection is based on majority opinion and the obvious merit. Among
other considerations, the criteria i.e. merit will be determined on the
following basis:

Educational Qualification

Professional Qualification

Place of residence vis--vis location of branch where staff is

required.

Experience in Insurance/Marketing.

Experience in the position applied for vis--vis job description,

in case of specialized positions.

a)

Past achievements in marketing etc.

Result of the written test - if held.

Result of the final interview.

Candidates

selected

would

be

short-listed

and

taking

into

consideration the requirements of the Branch/Head Office as per

approved, the positions will be filled in by offering the letters of
appointments in the approved scales by the competent authority.
However, experienced candidates drawing higher salaries could be
considered for advance increments in their grade with the previous
bank or could be taken in higher grade and offered employment
accordingly.

51

b) Candidates rejected by the Selection Committee would be politely

informed if deemed necessary.
3.10.3 Verification of Antecedents:
It will be ensured that the antecedents of all employees are verified
from their last employers and reports regarding their conduct, honesty
and integrity are obtained particularly of those employees who served
in financial institutions. Appropriate disciplinary action shall be taken
against those employees who misquoted about their past experience,
conduct and qualifications.
3.10.4Personal Record of Employees:
a) A personal folder of each employee will be maintained which shall
contain, duly completed prescribed application form, appointment
letter and such other papers deemed necessary for his employment
including the Staff Record Cards containing a summary of record of
each personnel.
b) The personal folder of all employees will be maintained at Human
Resource Division for updating records. However, duplicate copy of
personal folder respecting employees of the branches

will be

maintained at the branches also.

c) Seniority list of all categories of employees shall be maintained by
the Human Resource Division
d) The Human Resource Division at Head Office will control / check all
the personal folders of all employees.

3.11. Selection Device:

Following are the selection devices, which are being adopted at SLIC.

The application
52

Test

Interviews

3.11.1 Application:
SLIC requires handwritten applications from a candidate who is
applying for the job. The reason for requiring hand written application
is to check and verify it when the candidates are giving tests. After
receiving the applications HR department shortlists the candidates.
3.11.2 Test:
SLICwhile hiring a new person relies heavily on the test. Even
Interview is considered to be a formality that is just fulfilled, as
pointed out by one of the employees of the organization. The test is
based on objective and subjective approach and it includes questions
regarding basic general knowledge, computer literacy, business and
accounting.
3.11.3 Interview:
The interview panel consists of 2-5 members and the interview is not
very formal, they have an informal type of interview and they defined
the word Informalas, where the candidate is made feel easier while
answering questions.
The interview panel/committee consists of 5 members as already
mentioned, and these members include following persons from
different departments:

One person from Board of directors

One person from Marketing Department

One person from Commercial/Consumer Sales

One person from Finance Department

One person from HR department

The main consideration in interview is given to:

53

Academic Records

Written and Verbal Skills

Physical Appearance

3.12 Employee Orientation:

It brings employee familiarity with the organization.
3.12.1 HR Induction:
An induction is the process by which a member of staff is given the
information they need and makes necessary contacts to enable them
to do their job, to understand the organisation and how to operate
within it, and to feel welcome into the new role. Inductions must take
place for new staff joining the organisation, for staff that are
transferring between divisions, and for new members of staff from
other areas of SLIC. The responsibility for ensuring that inductions take
place suits with the line manager.Starting a new job can be an exciting
and challenging. SLIC recognizes that it can also be quite difficult as
you are trying to get to grips with lots of new information and
understand how things work within a new organization.
Like most organizations SLIC has policies and procedures, which enable
it to work efficiently and effectively.

Importantly they ensure that

employees are treated consistently and fairly.

This Induction has been prepared with three main objectives:

Enable you to settle into your new post quickly and effectively

Assist you in meeting your responsibilities for managing staff

Help you to familiarize yourself with the day-to-day workings of

SLIC.

Initially designed for new line managers, this course is also suitable to
those individuals without direct report responsibility but where a good
understanding of HR policies is necessary.
54

A pack of documents

containing key policy guides will be given to all attendees to retain for
their own future reference.
The induction provides a brief overview covering:

Who your HR Team is and what we do?

How to find HR information?

Pay & Benefits

Recruitment

Induction

Performance Management

Managing Attendance

Employee Relations

Changes to contractual Terms & Conditions

Workshops

The new comer is also informed about the company and its policies.
Following information is provided to the new comer:

The new comer is given copies of necessary documents

He is informed about the department he will be working in

He is informed that whom he has to report

His immediate supervisor

Information

Overload is

avoided

and

the working

policies

are

introduced gradually.
3.12.2 Pre-joining Formalities:
Once the employee is selected and appointment letter is being issued,
following formalities to be completed:

Submit the acceptance letter issued by the Human Resource

Divisions within the time frame.

Arrange the fitness report from the approved hospital.

55

Report the designated branch.

3.12.3 General Orientation:

Representative from the training and development view the preview of
the organization, the core values, the organizational structure, the
policies that the new employee has to follow, salary and other benefits
that the new employee will be eligible for. Employees are oriented to
SLIC by:

Dinners.

Training.

Farewell after the completion of training.

Executive Managers checking of tasks and jobs performed.

3.13 Training and Development:

The bank has an Operations Department. It deals with the training and
development of all level of employees.SLIC ensures that employees have
the necessary skills to perform current and future jobs. Because of the
new technology and the quality movement in this field, SLIC believes in
work performed by teams. Hence, managers and employees develop
skills to be successful in a team environment. Because many
employees value work that is personally rewarding and does not
interfere with non-work activities, the HR management also helps
employees identify their work interests and goals and cope with issues
such as balancing work and family roles. Human Resource deals with:

Ensuring that employees have the skills needed to perform their

current job

Preparing employees for future work roles

Identifying employees work interests, goals and values and

other career issues

The bank arranged high value customized training program for the
selected mangers that which starts at least 2 months before the
56

commencement of the New Year, in order to make it easy for the new
employees to socialize. SLIC also conducts events such as seminars to
help the female employees. In which female branch mangers of the bank
from various regions participate.
As a result today SLIC is on the top in terms of highest number of employees
who obtained positions and passing the diploma examination. SLIC
facilitates its employees with on the job training, conducting seminars and
workshops, through job rotation technology based training along with off- job
training. SLIC believes in pre/post training tests for existing employees and
post training test for the new employees.
Training is a process of continuous improvement, because of which
significant results have been achieved. Development in concerned with
the future needs rather than present needs. They develop their
employees in staff colleges whenever they needed they place them on
the jobs these management trainees are multi skilled and can perform
each and every task whenever needed. SLIC grants incentives to those
employees who improve their education.
3.13.1 Importance of Training:
Money spent on training can provide huge returns to the company.
Intensified competition, technological changes, and the search for
improved productivity are increasing skill demands of employees. Skills
deteriorate and can become obsolete if not enhanced through training.
3.13.2 Assessing Training Needs:
Ideally, employees and managers

alike

should

be

continually

undergoing training to keep their skills current. In reality, few

organizations have not made a commitment to providing their staff
with continual learning, nor do employees voluntarily take the initiative
to seek out training opportunities and SLIC is one of them. Training is
provided on an as-needed basis, and the decision as to when that
57

need lies with individual managers. The manager while assessing that
whether the individual needs training or not ponders on the following
points:

New equipment or processes are introduced that may affect an

employees job.

A change is made in the employees job responsibilities.

There is a drop in an employees productivity or in the quality of

his or her output.

There is an increase in safety violations or accidents.

The numbers of questions employees ask or their colleagues

increases.

Complaints by customers or co-workers increases.

3.13.3 Training Methods:

Most training takes place on the job. Some skill training is too complex
to learn on the job. In such cases, it takes place outside the work
setting.
3.13.3.1 On -the -job Training:
Popular on the job training methods include job rotation and mentor
relationships. Job rotation involves lateral transfers that enable
employees to work at different jobs. Employees get to learn a wide
variety of jobs and gain increased insight into the interdependency
between jobs and a wider perspective on organizational activities. The
new employee works under the observation of an experienced worker,
who acts as a model whom the newcomer attempts to emulate. Both
job rotation and mentoring apply to the learning of technical skills.
Interpersonal and problem solving skills are acquired more effectively
by training that takes place off the job.

58

3.13.3.2 Off the- job Training

There are a number of off the job training methods that are used to
make available to employees. The more popular in practice with SLIC
are classroom lectures, videos, and simulation exercise. Classroom
lecture are well suited for conveying specific information. They can be
used effectively for developing technical and problem solving skills.
Interpersonal and problem solving skills may be best learned through
simulation exercise such as case analyses, experiential exercises, role
playing, and group interaction sections, complex computer models, are
another kind of simulation exercise, which in this case is used to teach
technical skills. Off the job training can rely on out side consultants,
local collage faculty, or in house personnel.
3.13.4 Employee Development:
SLIC ensures that employees have the necessary skills to perform
current and future jobs. Because of the new technology and the quality
movement in this field, SLIC believes in work performed by teams.
Hence, managers and employees develop skills to be successful in a
team environment. Because many employees value work that is
personally rewarding and does not interfere with non-work activities,
the HR management also helps employees identify their work interests
and goals and cope with issues such as balancing work and family
roles. Human Resource deals with:

Ensuring that employees have the skills needed to perform their

current job

Preparing employees for future work roles

Identifying employees work interests, goals and values and

other career issues

Employee development is a necessary component of a companys

efforts to improve quality, to meet the challenges of global competition
59

and social change, and to incorporate technological advances and

changes in work design. SLIC works on the following types of training.

Basic literacy skills

Technical skills

Interpersonal skills

Problem solving skills

Ethical training
3.14. Compensation:
Besides interesting work, pay and benefits are the most important
incentives that companies can offer employees in exchange for
contributing to productivity, quality and customer service ,. ,Also,, ,pay
,and

benefits are used to reward employees membership in the

company and attract new employees. ,The ,positive ,influence ,of ,new
,work

,designs,

new technology, and the quality movement on

productivity can be damaged if employees are not satisfied with the

level of pay and benefits or believe pay and benefits are unfairly
distributed.
3.14.1 Pay Allowances and Other Concessions:
The list of Allowances and other concessions are given blow;

Pay

House Rent Allowance

Special Duty Allowance

Education Allowance

Entertainment Allowance

Reimbursement of Residential Telephone Expenses

Utilities

Increments / Allowances

Furniture, Fixture & Electrical Appliances for Executives

60

Entitlement of Cars for the Executives

Conveyance Allowance in lieu of 2nd Car for Senior Executives

3.14.2 Wages and Salaries:

Wages and Salaries administration is one of the most important
Managerial

function,

it

deals

with

all

aspects

of

employees

compensation. Wages/ Salary is the remuneration paid to the

employees in return for their services. It can save an organization cost
involved with high turn over while attracting, retaining and motivating
capable and productive employees. It is a means of measuring the
relative value of a job to an establishment; with this objective the most
highly valued jobs to receive the highest pay and lowest values to
receive the least. Such measurements can be used as a foundation for
determining and equitable wage/salary structure.
The jobs are being evaluated on the basis of mental and physical
efforts and accountability that is why the jobs are grouped in to grades
according

to

measurable

difference

in

leaves

of

duties

and

responsibilities.
NBP has determined its Wages/Salaries structure to attract, retain and
motivate quality employee keeping in view the local market and
financial commitment of the establishment.
3.14.3. Bonuses
When SLIC was nationalized following amount of bonuses were paid to
the employees:

Officers:
4 bonuses per year, i.e. 4 bonus basic salaries

Executives:
4 bonuses per year, amount as bonus: of basic salary

Clerical/Non- Clerical Staff:

61

3 basics and one gross salary

But after privatization this systems is removed and replaced with
percentage system and now bonuses are given once a year based on
performance evaluation.

At grade A+ 25%

At grade A 20 %

At grade B 15%

At grade C 10%

3.14.3.1 Increments:
The Competent Authority will determine the increment of an
employee.

An increment cannot be claimed as a matter of right but it

depends at the discretion of the Competent Authority. In
deserving cases the Competent Authority may allow more than
one increment on the basis of performance

3.14.4 House Rent Allowances:

An employee shall be entitled to receive from bank a house rent
allowance or house rent ceiling on such scales and on such terms and
the Competent Authority may determine conditions as from time to
time. The present rates of house rent allowance/ ceiling are given
below
House allowance has been increased from 47.5% to 50% of the basic
pay.

Executives - 42.5% of Basic Salary

Officers - 44% of Basic Salary

Clerical - 37% of Basic Salary

Non-Clerical - 38% of Basic Salary

62

3.14.5 Utility Allowances:

Utility allowance has been increased from 10% to 12% of the basic pay.
3.14.7 Maternity Allowances:
Existing

Revised

At home

Rs.12, 000

At hospital

Rs.8, 000
Rs.10, 000

Rs.12, 000

3.14.8 Loans:
Loan facility is given only to those whose basic salary is equal to or
more than it. There are three types of loan given to employees.
Car Loan:

The limit for providing this kind of loan is now increased to RS

450,000

The markup rate has been reduced as compared to previous

years from 3 to 4%. The markup rate previously applicable was
10 %, and now it is brought down to 6.5%

House Building

The house building loan is provided only to those who have

worked at least for 3 years with the SLIC regularly

There is no limit for this type of loan

The markup rate is 5 % for officers and executives

The markup rate is free for clerical and no clerical staff

In case of death of an employee before retirement the whole of

house building loan is waived off.

63

3.14.9. Encashment of Privilege Leaves instead of Casual

Leaves:
Un availed privilege leave(maximum 15 days)may be allowed to be encashed instead of casual leave to OG-1, 11,111 at the end of the year
only basic pay to be paid.
3.14.10. Funeral Expenses:
Funeral expenses for executives increased from Rs.18, 000 to Rs.25,
000.
3.14.11. Pension and Benevolent Funds:
The demand raised by the SLIC Officers association regarding revision
of pension formula for the calculation

,of

,gross

,pension

and

enhancement in benevolent fund grant has been taken to and will be

resolved.

3.15 Hospitalization Policy:

SLIC has an effective hospitalization policy that covers the following
areas.
3.15.1 Hospitalization Expenses:
In addition to medical reimbursements allowed to SLIC regular
employees

for

outdoor

,medicines,

as per entitlement defined in the pay scales, the

employees

shall

be

consultation

allowed

fee,

laboratory

,reimbursement

,of

,tests

,and

hospitalization

expenses as per following rules

3.15.2 Basis of Entitlement:
Sons up to the age of 23 ,years ,and ,daughters ,up ,to ,their ,marriage
,shall

be entitled to hospitalization. Those

,employee ,concerned ,that

,dependents

,of

,the

are entitled to free medical treatment by

,virtue ,of ,their ,previous,/present

employment shall not be entitled to

hospitalization.

shall

All

employees

be

required

to

undertaking to the above affect as specified by the Bank.

64

furnish

an

3.15.3 Entitlement of Hospital:

Employees/their dependents shall be entitled to avail treatment from
any hospital of their choice.
3.15.4. Entitlement for Illness:
Employees/their dependents shall be entitled to hospitalization for
surgery and serious illness requiring indoor hospitalized treatment,
excluding maternity cases.
3.15.5. Nature of Expenses:
All expenses in hospital including room rent, laboratory tests, surgeon
fee, medicines, any other relevant charges, shall be covered in
hospitalization expenses

3.16. Maintenance Function:

NBP focus on the maintenance of their employees through following
ways.
3.16.1 Benefit Administration:
a) Casual Leave:
Casual leave up to 10 days in a calendar year may be granted to the
employee provided not more than three days leave taken at a time.
This leave may not be combined with any other kind of leave.
b) Sick Leave
Total sick leave with pay shall not exceed 30 days. The sick leave can
not be accumulated and entitled shall lapse at the end of each
calendar year.

Leave for Female Employees

a) Maternity Leave
This leave may be granted for a period of not exceeding 60 days at
one time.

Maternity leave shall be granted only three times during

the entire service.

65

b) IDDAT Leaves:
A female employee on the death of her husband may be granted IDDAT
leave on full pay. This leave shall be sanctioned outside her
accumulated earned leave balance.
c) Ex Pakistan Leave:
This leave may be granted to employee if he/she proceeds abroad for
higher studies, private visit, for performing hajj or for a medical
treatment.

3.17. Performance Management System:

It is the process by which SLIC evaluates it performance. Moreover it is
about the employee performance and the accountability. As the world
is now global village and your competitor is watching you, so the
organizations need high performance. At the same time the employees
need back on their performance guide for their future behavior.
So the output of the organization depends upon the feedback provided
to the employee timely. Especially the newcomer to the organization
needs to understand their jobs and their work setting. The longerservice employees also want positive feedback on the good things they
do. So SLIC is an organization where the management feels about the
employees. The employees feel sense of belongingness in return. HRD
section always takes this opportunity to evaluate the performance of
the employees. The appraisal system also helps the management of
the SLIC to help the managers with placement, pay, and other HR
decisions. The HRD section of the SLIC carries out the appraisal for the
following uses;
It allows the employee, the Manager to take necessary about the
improvement

of

the

performance.

The system also helps in promotion and pays increase of the deserving
66

employees after their evaluation and also prepares the next person for
the succession plan. Performance factors include:

Professional knowledge

Decision making ability

Ability to deal with emergent situations

Improving corporate culture

Ability to visualize and plan

Acquaintance with technological enhancement

Ability to implement decision

Customer relationship

Communication skills

Ability to create and guide team work

The Performance Management System for SLIC is divided into three

main areas
Planning
Monitoring
Evaluation
3.17.1 Planning:
Planning involves following the conventions of a comprehensive PMS
policy and defining measures of performance through the incumbents
job description, specific goals set for the year, and behavioral
capabilities needed for the job. During this stage, the manager must
communicate the performance standards and weightings for the role
using key accountabilities and behaviors. This should result in a
discussion with the jobholder jointly agreeing upon on actions to meet
role expectations. For the planning process, the following documents
are included as part of this report:
67

a) Defining JDDs A detailed write up defining Job Description

Documents and explaining the sections of their related JDD Template.
b) Job Description Document A form / template designed to capture
all necessary elements of a unique role. EE&T will provide all JDDs for
each unique role in NBP as agreed upon in the new organizational
structure.
c) Goal Setting Form A form designed to set goals that are based
upon key accountabilities in the job descriptions for the ensuring
evaluation period.
d) About Job Families A detailed write up on the job family concept
and its application to performance evaluation system.
e) Job Family Matrix A classification of SLIC Departments into job
families and details of both basic & advanced attributes associated
with each.
3.17.2 Monitoring:
Monitoring involves monitoring performance of the incumbent based
on these measurements throughout the year. This process involves
identifying performance gaps and taking remedial action through
regular feedback and coaching provided on a relatively informal basis.
If needed, interim reviews can be conducted (after a 6 month period)
using a shortened PMS form.
3.17.3 Evaluation:
Evaluation involves completing the PMS template according to the PMS
policy in which managers formally assess performance based on
objective grounds and provide relevant feedback and recognition to
deserving

candidates.

Through

this

assessment,

improvement

opportunities are discussed and agreed upon by the incumbent and

68

his/her supervisor. To complete the performance evaluation process,

following documents for SLIC are designed and enclosed:

Performance Management Policy A formal write up on SLICs

proposed performance management policy entailing both the
theory behind evaluation and details explaining sections of the
correlating performance evaluation template.

Performance Evaluation Template A form / template designed to

evaluate performance of SLIC executives and officers. This
template is directly linked to the performance management
system proposed by EE&T in bringing about the major change in
the way reward and promotion is perceived at SLIC.

The employee does not have a direct access to his or her ACR
but his performance is evaluated and continuous feedback is
provided so that he/she can improve/correct/rectify his or her
performance on regular basis and eliminate any shortcomings if
there exist any.

After the completion of the Annual Confidential Report in paper the HR

department enters this data into the database. On the basis of
evaluation several benefits are offered in terms of promotion and
reward. In the performance evaluation there are some traits that are
monitored:

Discipline and punctuality

Team spirit initiative and drive

Intelligence

Loyalty and devotion

Fitness

Interpersonal relationship skills

Honesty

Creativity and innovation

69

3.18. Organizational Career Management:

NBP provides career opportunities to its employees.
3.18.1 Promotion:
The criteria for promotion to a specified post are based on merit and
seniority. An employee is promoted if;

He has satisfactory performance records

Meets performance criteria

Clear recommendation in his ACR for promotion

If there is a departmental proceeding underway against the employee

or there is a penalty levied upon him other than censure or warning in
the last three years than such employee will not be promoted.
3.18.2 Demotion and Expulsion:
Organizational policies are set and are provided to the employees at
the time of joining the organization. The employees are demoted to a
lower rank if their performance remains the same for three consecutive
years.
Sometimes employees are not demoted but a higher rank is created in
the organization to change the status quo for the employee who is
demoted.
The person is expelled from the organization on course of bad conduct
if found convicted in law and on account of fraudulent activities.
3.18.3 Resignation:
When the employee decides to resign he should in writing inform the
HR department about his resignation three months prior to the
resignation

and if the employee fails to provide three months prior

notice about his resignation he will have to pay three months gross
salary amount to SLIC.

70

After the employee has filed for resignation the HR department will
send a query to all the branches with which the employee has any
transactions to know whether he still or does not have these
transactions and if the report is found ok than the head of HR
department will accept his resignation and will inform the branch
manger of the branch in which the employee works about his
resignation accordingly.
3.18.4 Retirement:
HR department writes to the employees CC line manager for providing
retirement data. The line manager arranges an informal meeting with
the employee to discuss the plan and confirms employee right to
request for continued working. The line manager writes to employee
confirming the CCR HR. meeting. The employee can choose to retire at
65. Normal retirement procedures are applied.
3.18.5 Labor Management Relation:
The society for labor welfare is formed in SLIC which works in cohesion
with the management to create a good and conducive environment to
provide,

Immediate relief in case of an accidental causality

Provides some benefits to the heirs of the on job deceased

Arrange variety shows for the families of employees

Arrange

educational

funds

employees.

71

and

provide

benefits

for

the

3.19 Functions of Major Marketing Department

The functions of the marketing department vary position to position within the
corporation as mentioned below;
3.19.1 Regional Chief
The function of the Regional Chief is to look after all the zones and to make sure that the
zones are working as they were directed.
3.19.2 Zonal Heads
Zonal heads are responsible for the procurement of the business to achieve the set
business targets of the corporation and let them to delegate into the downstream
effectively.
3.19.3 Sector Heads
The function of sector head is that he sets the targets for each area manager and helps
them to cope up with all kinds of problems those come into their way.
3.19.4 Area Managers
The function of area manager is to report sector heads on the weekly basis and to report
the progress and updates to him. Besides this they work as field officers and help them to
finalize the prospects and call each of the potential prospects on behalf of the
Corporation.
3.19.5 Sales Managers
Sales managers have to maintain a team of minimum of four sales officers and they work
directly as a sales representatives as well as the team leaders and sometimes helps the
sales persons to deliver the presentations to potential customers as well. They check the
progress of the sales officers and respond to the area managers.
3.19.6 Sales Officers

72

Each sales officer must have a team of twelve sales representatives working as a team
with him such that whatever problem occurs to any of the sales rep they can solve it and
they are continuously in search of the new recruitment and hiring such that to employ as
much people as they can to benefit both corporation and the individuals.
3.19.7 Sales Representative
It is the lowest ranked position in the State Life insurance Corporation of Pakistan but it
is the most important of all. They bring all the business to the corporation besides this
they sustain and expand the business which is why they are most important of all in the
whole corporation and are being treated as all individuals with some empowerment in
taking immediate but correct and true decisions when needed.

3.20 Marketing Strategy

The marketing strategy of State Life Insurance Corporation of Pakistan is allow the
organization and its workforce to use its resources to increase sales and scope of the
business, such that achieving competitive advantage, and obtaining the maximum level of
customers satisfaction. Besides this ensuring satisfaction level for the valued policy
holders and enabling the quality sales service facility to them.

3.21 Service Planning, Development and Management

As State Life Insurance Corporation of Pakistan is deeply involved in to the servicing
sector ,as ,a ,customized ,service ,provider to the whole country therefore there is huge
involvement of proper planning, development and management. All the three portions
could be , ,explained ,as ,follows ,under ,the ,roof of State Life Insurance Corporation of
Pakistan. Some other places where these elements are observed are mentioned below:
3.21.1 Planning
It is the most important of the remaining where to ensure the quality of the services first
of all planning is done ,to ,find ,out ,various ,opportunities for the corporation at sector
level and then at global level. Therefore a proper planning ,committee ,is ,formed ,at each
sector that is responsible ,to ,identify ,various ,opportunities ,for ,the ,corporation ,in ,order
73

to be successful in ,the ,market ,and ,ensure ,the ,best quality services. Besides this before
any of the potential prospects is contacted a proper planning is done by the sales person
that how will he go and act in front of it such that the customer should not feel any shy or
restriction or hesitation in order to meet and hears him. Planning aspect is commonly
observed at the preparation of the insurance plan for the customer in which proper
documentation, and its analysis study is conducted and way of implementation and
contact is too discovered with the help of the area manager or sector head.
The next level of planning is observed when after sales services are being provided and
the time when future installments of the policy plan are being taken from the same
customer and the method design with which customer feels safer and convinced to submit
it. The final level of planning is observed when new customers are being attracted or
when the existing business is being expanded.
3.21.2 Development
Development is now not just the need but the cry of State Life Insurance Corporation of
Pakistan. As it was formed in 1972 since then there is very minor development in the
managerial tactics; though there is huge development in the reserves, infrastructure,
business, money, savings and corporate worth but still the managerial and marketing
aspects needs to be upgraded. Like the management is uses traditional techniques rather
than the total quality management tools to control and manage the whole organizational
setup. This is why the processes are not that much effective and efficient.
Secondly the sales reps of Corporation are being given trainings in the same old
traditional fashion which do not even uphold up with the need of the day, people feel
insecure if they are treated in the traditional way. Therefore there is huge opportunity in
the development of the organization for which there is a separate department working
under marketing department which is known as FMD department where training and
developmental programs are carried out.
3.21.3 Management

74

The management at Corporation is well aware of all the pros and cons of the organization
which is why they are continuously acting upon to resolve up into a better ending. The
management ,is ,completely ,empowered ,up ,to a ,certain ,level ,such ,that an employee
can take immediate decision at his own to resolve any problem in a best manner. The
management hierarchy at State Life is one of the best hierarchies and is ,well ,arranged,.
,Everyone ,knows ,that ,who ,has ,to ,report ,whom ,and

how, there is no confusion between

the roles and all the top managers of the Corporations have ,passed ,through ,the
,fundamental ,sales ,representative ,approach ,as ,a ,result

of which too few management

issues are observed even though there is a very large ,number ,of ,the employees of the
organization. The ,management ,has ,got ,no ,complexities ,or ,misconception ,but if any
problem arises ,it ,is resolved at once. ,The ,management ,is ,well ,trained and is very
cooperative,, ,as ,it ,is ,the ,corporation ,of the public not individual; hence all the rules and
regulations followed are up to the public opinion.

3.22 Major Competitors of Corporation

The major competitors of the ,corporation ,are ,EFU , (Pvt.) Limited, NJI (Pvt.) Limited
and Shaheen Insurance (Pvt.). There are several other insurance corporations as well
which offer the same kind of services. The competitors of the organization are too weak
to grapple the maximum market because they cannot offer the returns which State Life
are offering and they competitors are themselves uncertain about their stability. The
maximum reserve which competitor has is EFU with 14 Billion rupees whereas State Life
enjoys the Reserves above 194 Billion Rupees and Life fund of above 200 Billion
Rupees.

3.23Future Prospects of Corporation

The ,future ,prospects ,of ,the ,Corporation depends upon the capabilities of the Sales rep,
such that the list of the future prospects ,is ,updated ,on ,the ,daily ,basis and as a result the
appointments form the expected ,prospects ,are ,taken ,few ,days before than they are
presented so that the client remains in a state where he is interacted ,regularly ,with ,the
,sales ,persons,. ,The ,futures ,larger ,prospects ,includes ,the

75

employees of the large

corporations and organizations like Askari Bank and National Bank to be provided
individual life insurances and as well as the Group insurance policies.

76

Chapter 4
SWOT Analysis
SWOT analysis is said to be the measurement of strengths, weaknesses, opportunists and
threats within and outside the organization. Every organization has to face them and
make them beneficial for the organization accordingly. SWOT analysis of SLIC is as
following :-

4.1Strengths
Strengths are the key of the organization as a result of which it survives; therefore the
strengths of SLCP are as follows:
4.1.1 Strong brand name
State Life has been in the insurance business for over 38 years and during thistime the
company has grown from a smalllife insurer to one ofthe world's largest financial
institutions. Further, its customer oriented service, strong distribution network in the
Pakistan and positive financial ratings allcontribute to its brand image, which can be
leveraged suitably.
4.1.2Major casualty insurer
State Life is the main home insurer in the Pakistan. One out of every three insured people
in the Pakistan is insured by State Life, meaning that State Life is the main life insurer in
the country. The company is licensed to sell insurance products in all the districts,
anadvantage over other insurance companies operating there.
4.1.3 Extensive distribution network
State Life has about 3,579permanent employees working across the Pakistan and nearly
56,448 agents who are trained to sell State Life insurance products and 2,000 staff
members.
4.1.4 Market Share
State Life had about 58% of the market share throughout the country for the year 2009.
Whereas the total market share is still above 60% in Pakistan.
4.1.5 Guarantee
77

To each of ,the ,policyholder ,SLCP provides the guarantee against his savings from the
government of Pakistan under the article ,11, (,1,) ,of ,the ,Life ,Insurance ,
(,Nationalization) Order 1972,, , (,President ,Order ,No,. ,10 ,of ,1972,); ,Ministry ,of
,Trade,, Federal Government of Pakistan.

4.1.6 Premium Rates

SLCP is the ,only ,insurance ,corporation ,in the Pakistan which opts for the stable and
same premium rates deposit to the corporation by the policyholders throughout all the
policy years.
4.1.7 Customer Services
SLCP provides hundred percent customized services to the customers. There is a huge
shift from the standardization to the customerization and customization even at the mass
level due to intense customer care.
4.1.8 Variety of products and services
There is a wide variety of products and services those are being offered by the SCLP for
its customers and the policy holders. The total number of the policies being offered to the
individuals is above seventy and so for the group policies.
4.1.9 Insurance Consultants
SLCP is providing excellent and well trained agents for the consultancy to the people
who are willing to make a best use of their savings and who desire for to participate into
the infrastructure development of the country without wasting any personal monitory
capital.
4.1.10 Market repute
SLCP has a good repute in the market due to several reasons, out of those the most
obvious are meeting all the claims of the policyholders well in time and compensating
them if any delay occurs form the corporation side in such a way that they are paid with
the penalty. Besides this SLCP has invested in a lot of ways towards the infrastructure
development and to upgrade the atomic energy centers of Pakistan.
4.1.11 Expertise at partner level at Marketing
There are two dimensions where SLCP is providing the partnering; one dealing with the
customers in a way that they share values in between each other and forming a bond of a
partner and the other is while doing marketing SLCP if is not able to sell a policy to
78

anyone sells at least a partnership offer to him/her so that the human life value enhances
and people become aware to the benefits associated with insurance.
4.1.12 Relationship selling
SLCP is not just selling off policies and then forgetting everything, rather sales people
establishes a long term relationship with each of the policyholder in order to provide a
guaranteed after sales services to prospects and satisfying them with solving their
problems.
4.1.13 Value added services
SLCP is providing services to their customers who are beyond their expectations in a way
that besides offering protection to the prospects savings, SLCP is offering protection
against the devaluation and then coverageagainst many medical issues.
4.1.14 Segments distribution and assignment
A well defined technique is used by the managers of the SLCP such that each zone is
divided into various sectors and each sector has got fighting fit segments with area
managers assigned to each.
4.1.15 Well defined Selling Process
The core activity at SLCP is its selling process. It has been built slow and steady and now
it is the most sophisticated amongst all the processes of the corporation. There is proper
teaching for the prospecting, approach, preparation, closing, and follow-up of the sales
person with repeatedly practice all over.
4.1.16 Providing Services to Accounts
The key to the SLCP is to satisfy their accounts no matter what to be done which is why
while providing services to the accounts the sales person is trained and prepared well in a
way that no problem is left behind for them and all their excavations are solved.
4.1.17 Time Management
Being the insurance company and completely depending upon its sales and the
investment teams SLCP has to make sure the most and accurate use of the time without
wasting even a single minute, therefore there is a proper team to ensure the time is used at
maximum and effectively to benefit both the accounts; internal and external.
4.1.18 Coordination
Coordination between the Managers, Sales officers and the Sales representatives is most
necessary thing to be pondered by the SLCP, which is why on daily basis coordination
79

schedules are kept between the sales representatives and sales officers, whereas on
weekly basis between the sales officers and managers to ensure efficient and effective
coordination.

4.1.19 For Everyone

The point which distinguishes the ,SLCP ,from ,all ,other ,insurance ,providers ,is ,that it is
the only organization ,which ,is ,for ,everyone,, ,even a person who saves Rs. 300 a month
can be a policy member at SLCP, which others cannot offer even.
4.1.20 Employees satisfaction and motivation
Employees and Sales people are the internal customers for the SLCP, which is why there
are wide variety of offerings by the SLCP for their ,employees ,and ,the Sales ,people ,in
,order ,to ,motivate ,them,. ,Like ,SLCP ,offers ,its ,managers , ,with ,fuel ,bonus ,when ,they
,reach ,area ,managers ,or ,above,, ,besides ,this ,there ,is ,a huge incentive for the sales
people in the form of commission and the salaries. There is one another incentive that
motivates the employees that is all the employees who pass two years in SLCP become
members of group insurance facility provided by the SLCP even though none has to pay
even a single rupee to achieve it. Besides this there are several tours nationwide and
worldwide for the successful sales people. Finally but above all sales person who brings
on the maximum business to the firm is praised with the gold medal, and this practice is
conducted every month besides this his photo is displayed along with the target achieved
on the wall of fame.

4.2 Weaknesses
None system in the world is perfect, everyone has got some internal weaknesses, the
weaknesses of SLCP are as follows:
4.2.1 Respond to immediate changing needs
The customers need something unique for each encounter, which is why it happens
sometimes that a prospect replies with a satisfaction with same services but the within
short span of time he claims for the needs other than he specified for.
4.2.2 Dealing with multi-disciplinary actions due to size
The size of the employees as well as the offices is too vast to be monitored and controlled
according to the desires. This is why dealing with the disciplinary actions within the
organization becomes difficult to be handled.
4.2.3 Territory problems
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There is a huge gap between the territories assigned and territories serviced by the sales
representatives that is why territory problem prevails from the start till now in a sense
that a sales person leaves his territory and starts seeking the business in other territories
as a result some of the territories remain not serviced.
4.2.4 Total Quality Management
The element of TQM remains silent throughout the selling process, a sales rep is unaware
about how to service a prospect with complete service as a lot of sales reps are not having
huge educational degrees.
4.2.5 Education Level of Sales Persons
Majority of the sales persons at SLCP are literate till the bachelors level of the education
and mostly are not even BA, which is why it is difficult for them to understand any
technical or advanced equipment like laptops or graphical presentations.
4.2.6 Resource allocation for sales
A sales person is only provided with the techniques that how to prepare and conduct the
sales, none facility of transportation or approaching the prospect is provided. This is why
there is too much gap between the expected sales and the actual sales.
4.2.7 Managing Forecasting
The sales persons are unable to forecast that what a prospect needs or demands for the
future, neither a manager in the ,office ,is ,unable ,about ,what will not be expected trends ,
,in the near future nor lacks ,the ,ability ,of ,forecasting,.
4.2. ,8 ,Attracting the ,People,
,SLCP ,lacks ,the ,key

to ,attract ,the ,people ,and ,the ,prospects ,with ,the ,unique ,selling

,prepositions ,though ,SLCP ,is ,having ,a ,lot ,of ,policies ,which ,have ,no ,match ,for ,them
,in ,the ,market

as a whole.

4.3 Opportunities
Opportunities to a system are necessary to enhance the business success; therefore
opportunities to SLCP are as follows:
4.3.1 Cost conscious management
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SLCP can become a cost conscious management only if they conduct a proper feasibility
report of their operations as well as if they calculate the life expectancy through
analytical studies and avoid early payments re-back.
4.3.2 Small business insurance market
Already SLCP is offering policy to a person who is an earner and saved up to Rs 300 in a
month, so if SLCP want it can penetrate into the small business like such for the students
who gets a large portion of their pocket money in to waste whereas if they want to save
they can easily and then utilize the sum assured in a good way with three to four times
profit upon it in a better way.
4.3.3 World Traveler Insurance
SLCP is giving insurance to only the people who are on board at the flights of PIA but
there is no facility for the tourists who want to travel various countries across the world
that is why SLCP can introduce world traveler insurance and get large premiums for short
term.
4.3.4 Insurance Risk Management
SLCP is ,having ,a ,vast ,opportunity ,to ,introduce ,for ,the ,first ,time ,in ,Pakistan ,the ,risk
,management ,insurance ,for ,various ,individuals ,and the corporate world as well. This
will not just overcome the risk of the prospects but as well as bring on ample of capital
for the SLCP to meet its long terms debts as well if any.
4.3.5 Paperless transaction and policy system
A huge opportunity of availing the ,complete ,use ,of ,the , ,technology ,especially the
,computer ,so ,that all ,the ,transactions ,and policy procedures are made through it and
work is made guaranteed and bona fide success at the spot.
4.3.6 Well established positions with well defined marketing niche
SLCP can introduce well ,established ,positions ,and ,the well ,defined ,marketing ,niche
,for ,the new sectors and sub zones because there is huge probability of territory jumping
in the new segments.
4.3.7 Improving Presentation Techniques
The salespersons should be given trainings regarding improved and better techniques for
which ,the ,salespersons ,that ,are ,having ,aptitude ,of ,doing ,better ,and ,brings ,on ,better
,policies ,should ,be ,sent ,to ,various ,institutes ,which ,teach ,proper ,presentation
,techniques ,to ,convince ,the ,customers,. ,
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,4.3.8

Developing the Sales force

To motivate the sales force SLCP should introduce a policy that any salesperson who
achieves the target which he had to achieve in a year will be counted as a single year at
,its ,completion,. ,With ,this ,they ,will ,get ,promotions ,sooner and they will strike hard to
accomplish their targets sooner and ultimately too many will get the ultimate ,benefit,. ,
,
,4,. ,3,.9

Defining the Scope of Territories

There are approximately nine to ten problems ,and ,issues ,which ,a territory ,faces ,after ,it
,has ,been ,established, but if SLCP defines the scope of ,the ,territories ,clearly ,from ,the
,procedure ,of ,analysis ,till ,the ,methodology ,of ,reporting ,and ,coordinating ,with ,the
,officers ,of the salespersons then the probability of problems would decrease.
,4,. ,3,. ,10 ,Converting ,the ,Strategic ,Sales ,Plan ,into ,Tactical

Sales Plan

SLCP deals with the ,strategic ,sales ,planning ,procedures ,and fails to delineate them into
the tactical ones; therefore it should establish certain plans and procedures as well.
4.3.11 Marketing Information ,System,
,The ,use ,of

technology is too much low in the ,works ,and ,tasks ,accomplished ,by ,the
SLCP therefore if MIS is introduced in the operations of ,the ,SLCP,, ,it ,would ,make it
easier for them to identify their potential customers as well as ,their ,present ,customers,
and how to gratify with their ,needs ,as ,well,.
4.3.12 Marketing Decision Support System
,The ,MDSS ,will ,help ,SLCP ,in

many ways; they would have the database not only for
their employees but as well ,as ,the ,complete ,record ,of ,their ,customers both actual as
well as potential. It would also make ,it ,easier ,for them ,to ,interact with in ,the
,organization ,as well.

4.4 Threats
There are so many of the reasons and circumstances which a system cannot avoid ,at
,their occurrence so the ,threats ,to ,SLCP ,are:
4.4.1 High Interest Rate Increases
The rate of interest is increasing all ,over ,the ,world as a result of recession, which is why
SLCP is facing the threat of not taking the investments form the institutions which in
return are charging high interest rates.
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4.4.2 Increasing Property Prices

SLCP invests its capital into the purchase of the property to ,secure ,the ,primary
,investment ,of ,the ,policyholder,, , ,but ,now ,the prices of the property are increasing on
the daily basis which is a great big threat for it.

4.4.3 Regulatory Changes

SLCP ,is ,facing ,the ,threat ,of regulatory changes which are being continuously imposed
and then changed by the government of Pakistan upon it and as well as by the State Bank
of Pakistan for its operations.
4.4.4 Competition
There is increase in the number of the competitors since the formation ,of the ,company
,and ,many new ,firms ,have ,emerged ,which are providing the services almost nearer ,to
,the ,SLCP and harming the brand name in many ways.
4.4.5 Increasing ,Cost,
,The ,increasing ,cost , ,and ,need ,for ,insurance

might hit a point where a backlash will

occur, because to service the accounts is becoming difficult ,and ,out ,of ,it ,the
,commission ,paid , ,to ,sales ,people ,is ,leaving ,behind ,too less for the corporation itself.
4.4.6 General Threats
Government regulations on issues like health care, mold ,and ,terrorism ,can ,quickly
,change ,the ,direction , ,of ,insurance,. Increasing expenses and lower profit margins had
already hit hard on the smaller insurance companies.
4.4.7Environmental Threats
There is a threat of both the internal and external environmental threats to the SLCP in ,a
,way ,that ,there ,is ,too ,rapid ,change ,in ,the ,environmental ,processes ,but ,responding ,to
,them ,is ,not ,certain ,that ,is ,SLCP ,is ,not ,sure ,about ,which ,changes ,to be adopted, to
which should go counter, and which should be modified.
4.4.8 Political Threat
In Pakistan each and every setup which is somehow associated with the political
influences is under a threat of change that is the change in the policies and regulations
imposed by each ,new ,government ,body ,after ,every ,four ,of ,five ,years,. ,
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4.4.9 Technological Threat

SLCP lacks technology already, and the technology advances each eighteenth month
therefore the technological change is resulting into a great big gap between where a firm
should stand and at which position ,it is ,at ,the ,moment. ,

,4,. ,4.10

Socio-cultural Threat

As SLCP is in a region which is dominated by Muslim majority ,who ,are ,the people who
have complete faith in Islam, which is why if one ,person ,fakes ,the ,proceedings of any
activities of SLCP as non-Islamic the whole society restricts from ,taking ,policies ,form
,SLCP.
4.4.11 Economic Threat
As Pakistan is an underdeveloped country ,therefore ,economic ,threat ,prevails ,with ,the
SLCP in many senses, amongst which the installment of the premiums for coming years
is not sure, almost 2 percentages of the total policyholders dont pay off with the new
installments of their policies.

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CHAPTER 5
Conclusions and Recommendations
Learning as an Internee

The actual purpose of internship is the basic learning of practical and professional
approach of the studies. As an internee in SLCP I have been assigned different duties.

My internship of 08 weeks includes 42working days. The whole work done by me

can be well illustrated by distributing among ten weeks depending upon the nature of
work, thereto.

5.1 Conclusion
It ,was ,really ,a ,good ,experience ,as I have learnt a lot about the practical environment of
the offices, particularly about the sales representatives and their tasks I have learnt for the
first time. In my opinion working environment of ,large ,business ,groups ,is not much
different from that of theoretical study of management.

5.2 Recomendations
,Top

management should ,use ,up,- ,to-,date ,marketing practices rather to use orthodox
ideas. This is the age of advertisement ,and ,they ,should ,advertise ,their ,product ,rather
use push strategy. They should emphasize on pull strategy as well. They have good,
energetic, experienced marketing and sales team they should use it constructively.

They should divide their zones for marketing and sales teams in various territories
and should send their teams to each territory so that corporation can form niche over
there as well.

They should pay much attention ,to ,promotional ,tools. They should advertise their
services. They are only using personal selling type of promotions ,, ,which ,are
although enough to have a good positioning in the market yet not enough to grapple
majority of the market. They should use other promotional tools as well.

They should pay much attention to their employees promotion. They should use
better performance appraisal system,.
86

The Strategic decision-making should be adopted. In this way everyone will feel
sense of responsibility and their productivity will increase. Their loyalty with the
organization will also increase.

They should also ,improve ,their ,employee ,recognition program. In this way the
employees will ,be ,more ,satisfied with their jobs and ultimately will be beneficial for
the organization ,in ,terms ,of high productivity.

Skills and performance based performance appraisal program should ,be ,applied and
should ,not ,rely ,on ,, ,one ,, ,persons ,formulated ,ACR,.

Employees should be promoted on ,the ,basis ,of ,their ,achievement ,and potential.

Employees ,should ,not ,be ,rotated ,in different territories,, , ,as ,, ,sales persons are the
ultimate friends of the ,people ,in ,any ,territory ,assigned ,rotating them will lose the
accounts.

Sales Representatives should ,be ,given ,a bit ,of ,the ,permanent ,salaries as well
because not everyone ,is ,able ,to ,meet ,the ,sales ,every month.

Glossary
SLCP/SLIC

State Life Corporation of Pakistan

MIS

Marketing Information System

MDSS

Marketing Decision Support System

No

Number

TPP

Three Payments Plan

EFU

Eastern Federal Union

NJI

New Jubilee Life Insurance

Pvt.

Private

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5.14 References
5.14.1 Personal References:
1. Mr. Shafqat Hussain Jafri (Sector Head Abbottabad Zone Abbottabad)
2. Mr. Asfandyar Farooq Khan

(Sales Representative Abbottabad Zone)

3. Mr. Muhammad Babar

(In charge FMD)

4. Mr. Umair Ali Nisar

(Finance Manager)

5.14.2 Electronic References:

1. http://www.statelife.com.pk/ (accessed on 14/10/2014)
2. http://www.statelife.com.pk/html/corporate_profile.htm (accessed on 14/10/2014)
3. http://www.statelife.com.pk/html/objectives_mission.cfm (accessed on 14/10/2014)
4. http://www.statelife.com.pk/html/board_of_directors.htm (accessed on 16/10/2014)
5. http://www.statelife.com.pk/html/management.htm (accessed on 16/10/2014)
6. http://www.statelife.com.pk/doc/2006/org_chart3.pdf(accessed on 18/10/2014)
7. http://www.statelife.com.pk/html/performance_highlights.htm(accessed on 18/10/2014)
88

8. http://www.statelife.com.pk/html/investments.htm(accessed on 19/10/2014)
9. http://www.statelife.com.pk/html/bonus_rates.htm(accessed on21/10/2014)
10. http://www.statelife.com.pk/html/whole_life_assurance.htm(accessed on26/10/2014)
11. http://www.statelife.com.pk/html/individual_life_claims.htm(accessed on03/11/2014)
12. http://www.statelife.com.pk/html/real_state.htm(accessed on04/11/2014)
13. http://www.statelife.com.pk/html/insurance_gulf.htm(accessed on 14/11/2014)
5.14.3 Published References:
1. 30th Annual Report (2011);State Life Insurance Corporation of Pakistan.
2. Robert S (1999),The GE Way Field book Mc.Graw Hill.
3. Best Practices For Transforming Your Organization, Irwin
Professional

Publishing.

4. Dauphinias G W, Pederson P O, Admany H G (1995);

5. Lawson and Emily (2003) The Psychology Of Change Management

Special Edition.

89