atlas re insurance project final

8/6/2019 Atlas Re Insurance Project Final

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PRESENTED TO:

SIR LIAQAT ALI KHAN

PRESENTED BY:

ASAAD BILAL AHMED MI09MBA001

ATIF SATTAR Mi09MBA005

RIZWAN JAVAID Mi09MBA007

MUDASSAR BASHIR Mi09MBA018

HAMAYUN G. DASTIGEER Mi09MBA021

SHAHID HASSAN Mi09MBA028

YASIR QAYYUM Mi09MBA039

SAMMAR ABBAS Mi09MBA046

ADNAN AKHTAR Mi09MBA051

SABIR HUSSAIN Mi09MBA076

ORGANIZATION SELECTED:

INTERNATIONAL GENERAL INSURANCE COMPANY

TOPIC:

REINSURANCE ARRANGEMENTS AT IGI INSURANCE COMPANY


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TABLE OF CONTENT

Acknowledgement

Executive summary 04

Introduction 07

Purpose of reinsurance 08

History of reinsurance 09

Research question 12

Types used in atlas 13

Preferable reinsurance at atlas 18

Financial results 21

Method of claim recoveries 22

Objective of study 25

Methodological notes 26

Study of organization 27

Reinsurance arrangements 29

SECP circular 31 Atlas cover 33

Scope of cover 34

Benefits of cover 37Bibliography 39


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Conclusion 40

ACKNOWLEDGEMENT

I deem it as a great opportunity to offer my heartiest gratitude to my

venerable teacher Mr.Liaquat Ali Khan, Lecturer, Hailey college of

Banking and Finance, University of Punjab for his great efforts to make us

under stand and to conduct this kind of activities of giving the great

opportunity for learning beyond your existing area of scope.

It would obviously be injustice not to mention the name of the people

involved to make this assignment possible and helped their utmost to make

me understand the overall operation of the company as of their best

knowledge.

I am thankful to all Operational Managers (Atlas insurance co Ltd.)

Lahore Region,

for their nice co-operation and proper guidance throughoutmy internship. I will be missing my duties, if I do not express my heartiest

and sincerest sense of gratitude to all of them for providing me grand

exposure to gain multifarious experience, May Allah The Almighty bless my


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parents and well-wishers who are the permanent source of prayers for me

and my successes in this world and after this world.

EXECUTIVE SUMMARY

HISTORY AND DEVELOPMENT OF REINSURANCE

The earliest reinsurances first appeared in transport, especially marine

insurance, at a comparatively late date (14th or 15th centuries). Marine

insurance in antiquity was conducted chiefly by individuals, more or less in

a speculative manner, without a statistical foundation and without

retrospective data on loss experience

Purposes of Reinsurance

Reinsurance achieves to the utmost extent the technical ideal of every

branch of insurance, which is actually to effect

(1) The Atomization

(2) The Distribution

(3) The Homogeneity of Ris

What are their reinsurance arrangements?In the answer of this question we were told that

YES they do get reinsurance for there products that are majorly

o FIRE INSURANCE


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o MARINE INSURANCEo MOTOR INSURANCEo ENGINEERING INSURANCE

Types of reinsurance used at Atlas Insurance?

The types of reinsurance used at Atlas insurance company are

o Facultative reinsuranceo Surplus treaty reinsuranceExcess of loss reinsurance

Preferable Reinsurers of the Atlas Insurance?

The reinsurers that are preferred by the Atlas are followings;

FINANCIALS

2010 2009


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(Rupees in thousand) (Rupees in thousand)

Gross premium 1,024,858 910,738Profit for the year

before tax

327,130 237,194

Taxation:Current 87,590 53,284Deferred (3,110) (5,146)Prior year

deferred(8) -

84,472 48,138

Profit for the year

after tax

242,658 189,056


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HISTORY AND DEVELOPMENT OF

REINSURANCE

Introduction

During the past few years there has been a quickening of interest

internationally in the major aspects of reinsurance history, theory and

practice. The peculiar development of the national and international

economy of the European countries since the World War has apparently

made reinsurance the backbone of the whole of private property insurance.This accounts far the greatly extended literature on the subject in recent

years. Classic doctrines of risk, theorems in the calculus of probabilities,

principles of insurance law, long neglected, are being brought forward by

writers on reinsurance. There is vitality and depth in recent reinsurance

literature which has been lacking in the literature of the direct lines for

many a decade.

Fundamentals

In the most widely accepted sense, reinsurance is understood to be that

practice where an original insurer, for a definite premium, contracts with

another insurer (or insurers) to carry a part or the whole of a risk assumed

by the original insurer. By insurers we mean all persons, partnerships,

corporations, associations, and societies, associations operating as Lloyd's,

inter-insurers or individual underwriters authorized by law to make

contracts of insurance. We may define insurance as an agreement by whichone party, for a consideration, promises to pay money or its equivalent, or

to do an act valuable to the insured, upon the happening of a certain event

or upon the destruction, loss or injury of something in which the other

party has an interest. The insurance business is the business of making and

administering contracts of insurance.


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Risks Carried bythe Insurer

The need for reinsurance arises out of the fact that a first or primitive

insurer bears two distinctly different major risks

(1)

The risk that the events insured against will happen among a number of

homogeneous risks

(2)

The risk that certain events insured against will happen among a

heterogeneous group of risks to one or several insureds entitled by contract

to an exceptional payment in money or its equivalent,

or entitled toexceptional, costly service.

Purposes of Reinsurance

Reinsurance achieves to the utmost extent the technical ideal of every

branch of insurance, which is actually to effect

(1) The Atomization

(2) The Distribution

(3) The Homogeneity of Risk

Reinsurance is becoming more and more the essential element of each of

the related insurance branches. It spreads risks so widely and effectively

that even the largest risk can be accommodated without unduly burdening

any individual.

One of the major purposes of reinsurance is to permit the original insurer

at least to break even on his transactions.


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Historyof Reinsurance

The earliest reinsurances first appeared in transport, especially marine

insurance, at a comparatively late date (14th or 15th centuries). Marine

insurance in antiquity was conducted chiefly by individuals,

more or less ina speculative manner, without a statistical foundation and without

retrospective data on loss experience. Single ships and their cargoes in

ancient times often had a value disproportionately large to other private

holdings, and the whole of the private fortune of an insurer often hung on

the outcome of a single voyage or marine adventure. The perils of the sea

were greater also, considering the rudimentary state of the shipbuilder's

art.

It can readily be understood why marine underwriters wanted someone toshare their risks. After having effected insurances, whether on the ship, on

the cargo or on both, or on the lives of the captain and crew, an underwriter

often would become worried and try to sell parts of his contract to others

and necessarily at a higher rate. At first risks on parts of voyages were

assigned to others, usually the more dangerous parts.

First Recorded Reinsurance Contract

The first reinsurance contract on record relates to the year 1370 , when an

underwriter named Guilano Grillo contracted with Goffredo Benaira and

Martino Saceo to reinsure a ship on part of the voyage from Genoa to the

harbor of Bruges. Grillo offered to retain the risk on the voyage through the

lk~editerranean and to transfer to Benaira and Sacco the risk from Cadiz

through the Bay of Biscay and along the French coast. Other arrangements

of this kind were, no doubt, made in single instances for many years, but

reinsurance contracts in the modem sense of the word were unknown.

As early as the twelfth century, marine insurance began to be transacted

through the so-called "Chambers or Exchanges of Insurance," which had for

their object, first, the promotion of the marine insurance business on a

solid basis and, second, the settling of disputes arising among merchants


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and others concerned in bottomry and respondent contracts. In later years,

these Chambers or Exchanges of Insurance became corporate bodies and

instead of remaining confined to the original function of regulating and

registering insurance made by others, actually undertook an insurance

business themselves. With the establishment and functioning of Lloyd's in1710, there was a marked decline in the transaction of insurance business

through these Chambers or Exchanges.

There is a suggestion of reinsurance practice in the "Antwerp Customs" of

1609. Some mention of reinsurance practice is to be found also in the

"Guidon de la Mer," a code of sea laws in use in France from a very early

date. These marine regulations were consolidated and published at

Bordeaux in 1647, and at Rouen in 1671. The author of the consolidations

was said to have been Cleirac.

With the shift of centers of commerce from the south, south west and west

of Europe to the north, England's foreign trade grew. Marine insurance

followed in its wake. Some underwriters found they could effect

reinsurance with others. Underwriterswere accustomed to assign parts of

risks to others at lower rates, and these reinsurers had hopes of finding

other persons who would take parts of these risks at still lower rates. This

traffic in premium differences was so greatly abused that in 1746 it was

forbidden. (19 Geo. II, c 37, Section 4). Under this statute, reinsurance was

permitted only if the party whose risk was reinsured was insolvent ,

bankrupt or in debt and if the transaction was expressed in the policy to be

a reinsurance. The statute was more or less of a dead letter and was

repealed by 27 and 28 Vict. c 56, Section I on July 25, 1864.


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PROJECT

REINSURENCE

ARRANGEMENTSOF

ATLAS GENERAL

INSURANCE

COMPANY


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Research Questions

The questions that were asked by me and other group members regarding

the reinsurance arrangements of ATLAS GENERAL INSURANCE

COMPANY were as follows;

oWhat are there reinsurance arrangements?

o The type of reinsurance theyuse at ATLAS?

o Preferable reinsurers of ATLAS?

o The comparison of reinsurance ceded and claimrecoveries?

oWhether the companyitself is accepting reinsurancebusiness or not?

oAre the present arrangements adequate or not?

Now below we will discuss all the answers that we get from the sources.


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What are their reinsurance arrangements?

In the answer of this question we were told that

YES they do get reinsurance for there products that are majorly

o FIRE INSURANCEo MARINE INSURANCEo MOTOR INSURANCEo ENGINEERING INSURANCE

But the reinsurance business they place is with international reinsurance

companies not the reinsurance companies in Pakistan. That will beexplained further in next sections of project.

Types of reinsurance used at Atlas Insurance?

The types of reinsurance used at Atlas insurance company are

o Facultative reinsuranceo Surplus treaty reinsuranceo Excess of loss reinsurance

Facultative Reinsurance

It is a type of reinsurance in which

each risk is covered or reinsured

individuallytaking its individual

particulars in mind


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Now we will see that how it is used in Atlas General Insurance Company


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Use at Atlas Insurance

Facultative Reinsurance is used by the company where it is not being

covered by the Treaty reinsurance arrangements of the company.

The risk exceeding the treaty reinsurance is placed under facultative typeoff reinsurance.

It is mostly in fact entirely placed outside the country, The reason behind

this fact is that our Pakistani reinsurance companies are not authorized for

Facultative reinsurance arrangements. So the payments of premiums to

Reinsurance companies are made by the way the way of Remittances in

foreign bank accounts.

Surplus treatyReinsurance

It is a type of reinsurance

in which reinsured could

cede onlythose risks over

a certain size .i.e. that are

surplus to its retention

it is a type it is on reinsureds will that which of the risk is to be placed with

reinsurers and which risk is to be retained with himself means no

reinsurance.

Now we will see how it works at Atlas Insurance.


Surplus treaty reinsurance is used at Atlas mostly for the Property

Insurance. That the risk they think is of higher values or sustains high

degree of risk is placed with reinsurance companies abroad.


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Right now there are a number of Surplus Treaties, which Atlas insurance

has placed with international reinsurance companies and are preceding.

A definite percentage of each risk placed is accepted by Atlas itself and the

rest is demanded or claimed by Reinsurers working abroad. Payment of

premiums is made by the way of foreign currency remittances in foreign

banks.

Excess of Loss

The balance of anyloss which

exceeds that agreed limit will bemet byreinsurers, usually up

to a contractual maximum that

is termed as layer and the

amount retained as deductible

It is basically a Non-Proportional type of Treaty reinsurance. where certain

limit is retained by reinsured itself and over and above amount is to be born

by reinsurers in the form of layers.

If there are more than one layers then all of these layers may be accepted by

the same reinsurers or may be by different reinsurers


It is used at Atlas Insurance for placing the risk or reinsurance relating the

Motor risks. It is also placed outside the country not in Pakistan.


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Preferable Reinsurers of the Atlas Insurance?

The reinsurers that are preferred by the Atlas are followings;

Now we will discuss all of these one by one;

Swiss Reinsurance Company

They are a leading and highly diversified re/insurance company. Theirinnovative products and services are tailored to meet the preciserequirements of Property & Casualty and Life & Health clients. As a pioneerin insurance-based capital market solutions, They combine financialstrength and unparalleled expertise to create tangible client benefits.

Ratings As a reinsurer Swiss re is the one of the leading reinsurers of theworld. Due to their quality services its rating as reinsurer isA.


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Atlass Reason for Preference

When we went in to the fact that why is Swiss re beingpreferred by the Atlas Insurance, The reason we came to know was it is oneof the top 5 worlds best reinsurers.Their customer relationship, claim history, financial strength, and manyother facts are perfectly matching with the Atlas Insurance.Thats why it is one of the major choices of Atlas Insurance.

Hannover Ruckversicherung AG

Hannover Re,

with a gross premium of around EUR 11 billion,

is the third-largest reinsurer in the world.

It transacts all lines of non-life and life and health reinsurance and has a

network of subsidiaries, branches and representative offices on all five

continents with a total staff of roughly 2,200.

Ratings

The rating agencies most relevant to the insurance industry have awarded

Hannover Re very strong insurer financial strength ratings (Standard &Poor's AA- "VeryStrong" and A.M. Best A "Excellent").

Atlass Reason for preference

Atlas Insurance prefer the Hannover Re for the following reasons

o Strong market positioning - one of the leading reinsures worldwideo Top rating (S&P: AA-; A.M. Best: A) ensures attractive new businesso Approved strategy: volume is vanity, profit is sanityo Strong risk management both qualitative and quantitative


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Tokio Marine & Fire Insurance Company

It is one of the well known reinsurers of the world

and specially Japan. Its basic specialization is in Fire and Marine

reinsurance. So Atlas prefer it in any such kind of Reinsurance required.

Ratings

It is renowned reinsurer so is granted higher ratings by rating agencies

relating to insurance industry. The ratings granted to it isA.

Atlass Reason ofPreference

Now the point comes that why it is preferred by Atlas so the answer for thisquestion is that Atlas itself is basically an Japanese Group of companies.

Thats why it has preferred to work with Japanese reinsurer. Other facts are

there too. That is its financial stability, Better strategy, Ratings worldwide,

and many others.

Thats why it is one of the major choices of Atlas Insurance.

Sompo Japan Insurance Incorporation

It is one of the leading reinsurers of the world. Having an extended

network of branches. That means they have extended business and

products. Now Sompo Japan and Nipponkoa Insurance have established

the Joint Holding Company, NKSJ Holdings, Inc.

Ratings

Its Ratings according to rating agencies of Insurance industry isA.

Atlass Reason ofPreference

The point is one because of their Japanese Incorporation, their

status in market, ratings.


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The comparison of Reinsurance ceded & Claim

Recovery?

AS per the answer of this question we were told that from the reinsurers as

are described above Claims recovery has not been a matter of dispute ever.

The reason is their good relationship and the market status of

both of these organizations Comparison of reinsurance ceded

& claim recovery

Financial results

Followingis the overall performance of the company for the year endedDecember 31,2010:

2010

(Rupees in thousand)

2009

(Rupees in thousand)

Gross premium 1,024,858 910,738Profit for the yearbefore tax

327,130 237,194

Taxation:Current 87,590 53,284Deferred (3,110) (5,146)Prior year

deferred(8) -

84,472 48,138

Profit for the yearafter tax

242,658 189,056

Un-appropriatedprofit broughtforward

560 1,284


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Profit available

for appropriation

243,218 190,340

*Appropriations:Transferred togeneral reserve

(21,000) (22,000)

Proposed bonusshare @20% (2009 :@ 10%)

(73,823) (33,556)

Proposed cashdividend @ 40%(2009 : @ 40%)

(147,646) (134,224)

(242,469) (189,780)

Unappropriated

balance carried

forward

749 560

NOTE:After analyzing previousyears accounts anddoingcomparisonofit with

current year .It has been extracted that revenue income isincreasing and

there isdecline inclaim ratio, where ascommission and expensesshowing

increasing trend .Over allunderwriting result issignificant.

Method of Claim Recoveries

On studying the organizations working wecame to know that the premiums are paid by the way of foreign

remittances, into the foreign currency accounts of the reinsurers.

Now the method by which the Claim is received, the claim is settled after a

decided period of time, By the way of settlement of accounts. That means


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the accounts maintained are exchanged after a fix period of time showing

debit or credit balance. Which means either the payment is to be made or it

is to be received.

The major point of discussion was the comparison of business ceded and

the claim recoveries for each class of business. That is explained as under

For Motor insurance where the frequency of accident is higher the business

ceded is almost equitable to the claim recoveries.

For Marine insurance that is mostly ceded with Tokio Marine & Fire

Insurance Company, its frequency is quite low. Business ceded is of higher

value but claims are not frequent. But it is taken to prevent the company,

because although it is of low frequency the loss is sever.

For Fire Insurance the claims are frequent as it is of high frequency, So

accordingly is business ceded. For this Class of business only huge risks are

presented before reinsurer.

For Engineering Insurance claims are not frequent but are sever. So

business are ceded but recoveries frequency is low.

Is Atlas itself accepting Reinsurance or not?

As the question arise that either company itself issue reinsurance or not,

The answer of this question that we get was Atlas Insurance is itself a

Captive Insurance Company of Atlas Group of companies.

So, basically it is formed to cover the risks of its parent group of companies.

As far as the question of reinsurance arise so its answer is

YES they accept Reinsurance business but not at higher level so they may

be known as Reinsurers .


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Are present arrangements adequate?

As the Atlas has maintained its reinsurance arrangements with lead

reinsurers of the world so it maintaining a very strong reinsurance

arrangements that is according to the needs of the time that have graded

Atlas as a leading insurer of Pakistan.

As far as improvements are concerned, always there is a room for

improvements. But still Atlas is a Competing Insurer of Pakistan.


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OBJECTIVES OF STUDY

All the study that we have made was made to know about following facts;

o The Requirements for Reinsurance

o Reinsurance arrangements mostlyused

oReinsurance arrangements of Atlas

o Reinsurers Preferred

o Reasons for Preference

o Pakistani Reinsurance Industry


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Methodological Notes

Following given are the methods and sources by which we get our data

regarding this project;

Source of Data

The sources by which we collected Data

o Personal Visitso Official website ofATLAS INSURANCE

COMPANY

Limitation of Data

Reinsurance is a topic that is spread widely, it was not possible for us to

cover the topic completely. We have limited our data up to following points

Types of Reinsurance being used at Atlas

Their Preferred Reinsurers

Claim recovery related each class of business at Atlas Insurance


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ORGANIZATION OF STUDY

The Atlas Insurance Limited (Formerly Muslim Insurance Co.Ltd) was founded in 1934 by Dr. Sir Mohammad Iqbal and is the

oldest insurance company in Pakistan. Atlas Insurance made steady

progress and became one of the leading company in the field of life

insurance in the country. Unfortunately, it came under Government

appointed management from 1961 to 1979. In the mean time, the life

business was nationalized in 1972 and the company lost major

segment of its business. Later in the year 2006, the name of the

company has been changed from Muslim Insurance Company Ltd. to

Atlas Insurance Limited.

Atlas Insurance Limited (AIL) is providing efficient service to its

Clients and also paying good dividends to its shareholders regularly.

The equity of the company has grown from Rs. 1.6m in 1979 to Rs.

970.5 million in 2007. Investments at cost have grown from 3.4m to

over Rs. 920m. In 1996 the company paid one of the largest single

claim in the country of over Rs. 380.0m which speaks of the inherent

strength of the company and the satisfactory re-insurancearrangements.

The company enjoys full support and backing of the Atlas

Group and has re-insurance arrangements with world

renowned re-insurers like Swiss-Re, Hannover-Re, Tokio

Marine & Nichido Fire Insurance, Sompo Japan Inc.


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AIL was also assigned a Financial Performance Rating of 7 on a

scale of 1-9 bythe world renowned Credit Rating Agency, A.M.

Best Companyof New Jersey,USA.

To provide prompt and efficient service to clients AIL hasdeveloped a branch network all over the country. It has also

developed team of professionals always striving to excel in

service.

In line with the Atlas Group philosophyand commitment, Atlas

Insurance is being managed in accordance with good

international practices and entrepreneurial norms and customs

as followed bythe reputable international insurers.

Atlas Insurance is a financiallysound and a professionally

managed companyand has been awarded the "KSE Top 25

Companies Award 2005", the onlyinsurance companyselected for

this prestigious award.

The companywas also adjusted as one of the "Top 5 companies"

in the financial sector bya joint committee of the Institute of

Chartered Accountants ofPakistan (ICAP) and the Institute of

Cost & Management Accountants ofPakistan (ICMAP) and was

awarded the "Best Corporate Report Awards for the year 2003, 2006 &

2007.

The Pakistan Credit Rating Agency(PACRA) an affiliate of Fitch

Ratings Ltd, London, has upgraded Atlas Insurance Financial

Strength (IFS) rating "A+".The rating denotes strong capacitytomeet policyholder and contract obligations, while the risk

factors are moderate, and the impact of adverse and economic

factors is expected to be small.


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SUMMARY OF REINSURANCE ARRANGEMENTS FOR THE

YEAR

XYZ COMPANY

Rupeesin Million

Cover Type of Treaty (Per Risk Basis

)

Retention andNo. of Lines

(Surplus )

Reinsurer Rating

Name Share

Fire

Fire Fire 1stsurplus

Treaty

RetentionNo. of Lines

Treaty

Capacity(Inc.Ret)

Rs.20.0020.00

Rs.420.00

Swiss-ReHannover -Re

B.E.S.T-Re

PRCLBroker

Malaysian Re

Labunan -Re

45.0030.00

7.50

7.50

5.00

5.00

AA

A-

AA

A-

A-

Fire

2ndsurplus

Treaty

Retention

No. of Lines

Treaty

Capacity

Rs.250.00

PRCL

Broker

B.E.S.T-Re

Malaysian Re

Labunan -ReAfrica -Re

35.00

25.00

17.00

12.5010.00

AA

A-

A-

A-A-

Fire 3rd

surplus

Treaty


Treaty

Capacity

Rs.600.00

BrokerB.E.S.T-Re

PRCL

95.00

5.00

A-

AA

Total Capacity Non Group Companies Rs. 1,270.00

Marine

1stsurplus

Treaty


TreatyCapacity(Inc.Ret)

Rs.10.00

30.00Rs.310.00

Swiss-ReHannover -Re

B.E.S.T-ReMalaysian RePRCL

45.0030.00

12.505.007.50

AA

A-A-AA

2ndsurplus

Treaty


Treaty Rs.150.00

BrokerB.E.S.T-Re

PRCL

95.005.00 A-

AA


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Capacity

Total Capacity Marine Rs. 460.00

TerrorismQuotaShare

Treaty

RetentionTreaty

Capacity(Inc.

Ret)

(90/10)

Rs.10.00Rs.100.00

Retention

Hannover -Re

PRCL

10.00

75.0015.00

N.A

AAA

Total Capacity Terrorism Rs. 100.00

Engineering 1stsurplus

Treaty

Retention

No. of LinesTreaty

Capacity(Inc.Ret)

Rs.6.00

100.00

Rs.606.00

PRCL

Broker

B.E.S.T-ReMalaysian

ReLabunan -

Re

Africa Re

Kuwait

ReArab- Re

33.00

15.0015.00

11.005.0010.00

10

AA

A-A-

A-A-BBB

BB

2ndsurplus

Treaty


Treaty

Capacity

Rs.600.00

Al WastInsurance

Broker

B.E.S.T-Re

PRCL

95.00

5.00

A-

AA

Total Capacity Engineering Rs. 1,206.00

Misc.

GeneralAccident

Treaty


Treaty

Capacity(Inc.Ret)

Rs.5.0030.00

Rs.155.00

Hannover ReB.E.S.T-Re

PRCL

62.0032.50

5.00

AA-

AA

All Lines

SurplusTreaty

Retention

No. of LinesTreaty

Capacity

Rs.200.00

Broker

B.E.S.T-RePRCL

95.005.00

A-AA


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Total Capacity General Accident Treaty Rs.

355.00

Travel

Quota

Share

Treaty

Ratio (80/20) Retention

Broker

Various LloydsSyndicates

20.00

80.00

N-A

A

Motor

Excessof

LossTreaty

1st Layer : 1.00 M Xs

0.75 M2nd Layer : 8.250 M

Xs 1.750 M

Hannover Re

PRCLB.E.S.T-Re

Malaysian Re

70.00

5.0015.00

10.00

A

N.AA-

A-

Wherther Companyitself accepting reinsurance ,claim handling process ,

reinsurance premium reserves andline slip

SECURITIES AND EXCHANGE COMMISSION OF

PAKISTAN

Circular No. 17 of 2006SECP/ID/06/2006 December 4, 2006

Subject: REINSURANCE TREATY ARRANGEMENTS

FOR THE YEAR 2007This is advised to all the insurers that for the Reinsurance Treaty Arrangements forthe year 2007, at least 50% of total reinsurance treaty arrangement must be placed

only with

reinsurers having at least A rating by Standard & Poors or equivalent rating by

other

reputable international rating agencies. Remaining part of the treaty arrangement

may be

placed with reinsurers having at least BBB rating by Standard & Poors or

equivalent

rating by other reputable international rating agencies. No part of reinsurancetreaty

arrangement can be placed with reinsurers with below BBB rating by Standard

& Poors or

equivalent rating by other reputable international rating agencies.

The requirement of rating given above shall, however, not apply to Pakistan

Reinsurance Company Limited being a state-owned reinsurance company.


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It may please be noted that the Commission shall not entertain the requests to issue

any reinsurance capacity certificate.

All the insurers are advised to submit the documentary evidence in respect of their

reinsurance treaty arrangements made for the year 2007 to the Commission latest

by January

31, 2007 pursuant to section 41 of the Insurance Ordinance, 2000 read with Rule

15 of the

Securities and Exchange Commission of Pakistans (Insurance) Rules, 2002.

The documentary evidence in order to comply with the above said provisions shall

include certified copies of the reinsurance treaties, letter from reinsurers

confirming

continuance of agreement for year 2007,statement under Rule 15, evidence of the

rating

declared by reputable international rating agencies and a certificate on soundness

andadequacy of the reinsurance arrangement from a senior level officer or committee

which is

responsible for conducting the management and business of the insurer.

The Commission may call for any further evidence or investigate into the affairs of

the insurers to ensure full compliance of the aforesaid provisions of the law in

letter and spirit

and in case of any contravention thereof may initiate necessary action against the

insurer

under the Insurance Ordinance, 2000 and Rules made thereunder.

(Shoaib Soofi)

Director

Distribution:

Chief Executives (All Insurance Organizations)

Chairman (Insurance Association of Pakistan)

President (Institute of Chartered Accountants of Pakistan)

President (Institute of Cost and Management Accountants of Pakistan)

President (Pakistan Society of Actuaries)


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ATLAS COVER

y A.T.L.A.S. is able to provide:y a tailor made package of insurance protectiony combined with specialist support servicesy and expert claims managementy backed by Lloyds security-y Brit Insurance Lloyds Syndicate 2987y for the following operators:y Freight Forwarders / Air Freighty Forwardersy NVOCsy Multimodal Transport Operatorsy Road Transport Operatorsy Ship Agentsy Chartering and/or Ship Brokersy Ship and/or Crew Managersy Marine & Non-Marine Terminal Operatorsy Port Authoritiesy Stevedoresy Warehouse Keepers


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y Container Freight Stations/ Depot Operatorsy Container Storage Facilitiesy Container Operatorsy Vessel Operators (Physical damage toy containers)

SCOPE OF COVER

Cargo Insurance

y Cover for loss or damage to cargo including airy freight and incidental storage worldwide.

.

Physical Damage to Equipment

Insurance protection for owned and/or leased

equipment.

y All Risk or Total Loss only.y The Insured Equipments Contributions toy General Average and/or Salvage.y Equipment includes cargo handling and carrying

equipment.


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Third partyLiability

y Legal liability against claims from third partiesfor damage to property or injury, death and/or

disease.

y Consequential losses arising from the above.Liability for Cargo

y Legal liability for damage to or loss of cargoarising out of any unforeseen circumstance.

y Consequential losses arising out of damage tocargo.

Professional Liability

y Legal liability for financial loss arising fromnegligent acts, errors or omissions.

Liability towards Authorities

y Fines penalties and duties imposed, arising frombut not limited to breach of import/export

regulations and short or over delivery of cargo.

Costs and expenses

y Costs and expenses, including legal fees andsurvey fees.

y The costs of disposal of damaged cargo and/orequipment.


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y General Average Guarantees or Salvage BondsInsuranceprotection for owned and/or leased

equipment.

y All Risk or Total Loss only.y The Insured Equipments Contributions to

General Average and/or Salvage.

y Equipment includes cargo handling and carryingequipment.

Third party Liability

y Legal liability against claims from third partiesfor damage to property or injury, death and/or

disease.

y Consequential losses arising from the above.Liability for Cargo

y Legal liability for damage to or loss of cargoarising out of any unforeseen circumstance.

y Consequential losses arising out of damage tocargo.

Professional Liability

y Legal liability for financial loss arising fromnegligent acts, errors or omissions.

Liability towards Authorities

y Fines penalties and duties imposed, arising from


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but not limited to breach of import/export

regulations and short or over delivery of cargo.

Costs and expenses

y Costs and expenses, including legal fees andsurvey fees.

y The costs of disposal of damaged cargo and/orequipment.

y General Average Guarantees or Salvage Bonds

BENIFTS OF COVER

Claims Management

A.T.L.A.S. is able to provide:

y An experienced and professional multilingual proactive claimsservice managed

from Antwerp Belgium with key support

offices in Spain, Singapore, Dubai, USA,

Brazil

y Centralisation of Claims Managementy 24 hour immediate response availabilityy Comprehensive global network of specialisty Claims Correspondents, Surveyors &


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Lawyers.

Additional Support Services.

y Review and guidance on appropriate transportdocumentation, Standard Trading Conditions

B/Ls and related contracts

y On-Site risk assessment of Terminal andWarehouse operations

y Employee training workshops and corporatey seminarsy Specialist project or project cargo consultancyy Risk Management practical guidance on

ways to reduce your risk exposures

Claims are like water rolling down the hill side,

they follow the path ofleast resistance. Any operator in the

Logistics Industry is an integral part of the transport chain and is thus

exposed not only to mistakes or accidents

caused by their own operations, but also to those arising in other parts of

the transport chain.

In this growing litigious age, legal liability insurance should be

considered by any professional logistics operator

as an essential element in their business plan.


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CONCLUSION

The nut shell of this project is that atlas co Ltd obtaining reinsurance

mostly from foreign reinsurer which is costly.It should consider local

reinsurance companies for reinsurer arrangements .

Atlas insurance has good rating in market ,as it is one of the stable in

insurance companies.


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BIBILOGRAPHY

[email protected]

www.atlasinsurance.com.pk

www.seop.pk.com

www.fks.com

www.atlas-insurancecover.com

atlas re insurance project final

Documents