commercial union

LIFE INSURANCE INDUSTRY IN PAKISTAN

The life industry in Pakistan has a turbulent history. Before 1972. It was based on free competition, and there was were 42 companies transacting life insurance business. In 1972 the insurance industry was nationalized and, as a consequence, State Life was created, which held a monopoly until 1992. After changes in the law in 1990, private local and foreign companies were allowed to enter the life insurance market.

At present there are five life insurance companies in the industry:

* State Life Insurance—with more than 90% share of the market* EFU* Alico* Metropolitan* Commercial Union

Commercial union was granted permission to transact life insurance business in 1995, and commenced operations in June 1996. It is the newest company in the industry.

HISTORY OF COMMERCIAL UNION

Commercial Union is one of the world’s leading insurance companies, providing a comprehensive service to customers for all forms of general insurance and life assurance business. It was founded in the United Kingdom.Recruitment And Selection 11

Its origins date back to 1861, when a fire devastated a group of warehouses in Tooley Street, near London Bridge. The resultant insurance claims caused London’s fire insurance companies to increase their premium rates dramatically, which in turn lead to a group of merchants to form their own insurance company: Commercial Union.

By the turn of the century, Commercial Union had international representation in Germany, Canada, India, the United States, Singapore and Australia and through a series of mergers; Commercial Union became the first truly composite British insurance office. By 1905, Commercial Union merged with Hand-in-Hand Fire and Life Insurance Society, the oldest existing insurance company in the world (having been established in 1696). In this way Commercial Union and its predecessor companies have provided insurance for private and commercial customers for 300 years. Generations around the world are enjoying the benefits of commercial union pensions and other life products.

BACKGROUND OF COMMERCIAL UNION:

THE COMMERCIAL UNION GROUP THE COMMERCIAL UNION GROUP The group manages worldwide assets of 65 billion pounds and writes premiums of 9 billion pounds.

Principal activitiesCommercial Union plc is the holding company for the Commercial Union Group of companies, which transacts life Recruitment And Selection 22

assurance, other than industrial life, and all classes of general insurance through its subsidiaries, associates and branches in the united kingdom, Continental Europe, North America and other territories throughout the world. The Group provides a number of financial services related to its core business of insurance, including unit trust and investment management, banking stockbroking, private client investment management, trustee services and personal equity plans. The Group also invests in stocks, shares, properties, mortgages and loans and carries on the business of trading in property.

BUSINESS OPERATIONS BUSINESS OPERATIONS

THE GROUP COMPRISES SEVEN MAJOR BUSINESSTHE GROUP COMPRISES SEVEN MAJOR BUSINESS OPERATION: UNITED KINGDOM, FRANCE, THEOPERATION: UNITED KINGDOM, FRANCE, THE

NETHERLANDS, REST OF EUROPE, UNITEDNETHERLANDS, REST OF EUROPE, UNITED STATES, CANADA AND OVERSEAS. WITH THESTATES, CANADA AND OVERSEAS. WITH THE ACQUISITION OF THE ABEILLE COMPANIES INACQUISITION OF THE ABEILLE COMPANIES IN

1994, FRANCE NOW ACCOUNTS FOR NEARLY A1994, FRANCE NOW ACCOUNTS FOR NEARLY A THIRD OF THE GROUP’S TOTAL PREMIUMTHIRD OF THE GROUP’S TOTAL PREMIUM

INCOME. THE REST OF THE EUROPE OPERATIONSINCOME. THE REST OF THE EUROPE OPERATIONS CONTAIN RAPIDLY GROWING LIFE BUSINESSCONTAIN RAPIDLY GROWING LIFE BUSINESS

ITALY AND POLAND. OVERSEAS OPERATION, ASITALY AND POLAND. OVERSEAS OPERATION, AS WELL AS ESTABLISHED BUSINESS IN AUSTRALIAWELL AS ESTABLISHED BUSINESS IN AUSTRALIA

AND SOUTH AFRICA COVERS MANY OF THEAND SOUTH AFRICA COVERS MANY OF THE GROUP’S NEWER MARKETS IN ASIA.GROUP’S NEWER MARKETS IN ASIA.

Recruitment And Selection 33

Fund management is an increasingly important part of the Groups activities, operating through commercial Union Investment Management in London and local operations in eight major centres around the world. All the businesses contribute to the success of the group and share common strength and values.

COMMERCIAL UNION PAKISTAN

Commercial Union’s business in Pakistan began with operation in Karachi in June 1891. Today, it is the largest foreign general in surer in Pakistan and on 1st July 1996, Commercial union Life Assurance Company (Pakistan) Limited was listed on the Karachi Stick exchange. Commercial Union Assurance Company plc holds 51% of the equity, Pakistan Nationals holds 39% and Muslim Commercial holds the remaining 10% of the Equity. Commercial Union has its offices in the following cities in PakistanKarachi, Lahore, Islamabad, and Faisalabad.

Commercial union Pakistan is to become CGU in June due to the merger between Commercial Union and General Accident. The name and logo all will change, but for now it is carrying on its activities under the name Commercial Union.


General InsuranceThe Principal operations are based in Karachi and opened in our own building in 1991 .Commercial Union insures many of the leading multinational businesses in Pakistan with particular focus on industrial and commercial insurance.

Life AssuranceThe Life Company serves the life assurance needs of Pakistani people through Group Life and Individual Life also plans of Bancassurance are underway. Individual life Assurance covers was offered to the public from 1st January 1997and the company aims o become the ‘pre-eminent’ life assure among customers, shareholders and competitors in the private sector on Pakistan offering quality products to all clients.


COMMERCIAL UNION LIFE ASSURANCE COMPANY (PAKISTAN) LIMITED (CULAP)

The Commercial Union Life Assurance Company (Pakistan) Limited (CULAP) is a subsidiary of Commercial Union plc and wa s incorporated at Lahore in June 1995 as a public limited company, under the companies Ordinance, 1984. Its paid up Capital is Rs. 300 million, which is the highest among all insurers in Pakistan. The company is listed on the Karachi Stock Exchange

CU provides innovative insurance services that are designed to cater for happy events, such as weddings, higher education for the children, as well as comfortable life after retirement, and to meet situations arising out of premature death, accident or prolonged illness of a breadwinner. CU provides protective and caring cover for any occasion.It lends support to heighten the enjoyment of the occasion or cushion the blow. It will be there for its customers whenever they it.

FOUNDATIONS OF CULAP:A convergence of a number of international and local key players, all respected in the respective fields have pooled their strengths to give Commercial Union Life Assurance Company (Pakistan) Limited (CULAP), a first pedigree that people can depend on to ride out economic turbulence. Commercial Union Assurance Company plc has a share holding in CULAP of 51% which gives its operations the benefit of its substantial experience and financial strength. CULAP has a strategic alliance with Muslim Commercial Bank Recruitment And Selection 66

(MCB) which assists I the promotion of its business and CU has arrangements with financially sound and internationally reputed insures to insure that they have the ability to pay on their claims.

THE PEOPLE BEHIND CULAP:

CULAP has assembled an array of talented individuals all dedicated to achieve the overriding company mission to provide the customers with a bright and secure future through innovative, flexible, and comprehensive insurance services. It has the right people doing the right people right things. The company has at its core, Development Officers who attend to the customers needs and insure that all their financial goals all planned for and met. The Development Officers representing Commercial Union are trained to give advice that is reliable and best for the customer's circumstances.

CULAP OPERATIONS:

Insurance is fundamentally a service Business. Therefore it is important that policies should be serviced efficiently and diligently. To provide the highest level of customer service Commercial Union Life Assurance Company (Pakistan) Limited has a well-trained team of service personnel backed by State of art computer resourceFrom the moment an insurance proposal is submitted to them right up to the payments of benefits under the policy, they track the status of the policy and keep the customers posted on its progress. All the inquiries are treated with priority, and the policy is designed to adapt to the changing personal circumstances.

One sure measure of an insurance company is the promptness with which it pays the benefit under its policies.


Commercial union has the systems and the personnel to ensure the its customers get their payments without delay.

The company prides itself on: Personalized servicing of policies Efficient and courteous personnel Computerized systems at all levels Utmost priority to benefit payment.

TYPE OF INSURANCE PROVIDED BY CULAP:

CULAP writes Group Life as well as Individual Life business. CULAP started Group life business in June 1996, and has a significant client base, consisting of 160 Multinationals and Pakistani companies and institutions, covering 35000 lives.

Commercial Union commenced Individual Life Business in January 1997, with branches in Karachi and Lahore, and opened its Islamabad Branch in April 1997. CULAP competes on quality – quality of its products and quality of service. It fields a professionally trained sales force and offers products, which cater for each individual’s need.

Currently, CULAP Individual Life offers two products. These products enable the company to secure the clients future. The products are the Secure Life plan and the Secure Education Plan The team making up the CULAP including both the Group and Individual Life is young and energetic, who attend to many and varied insurance needs of the customers. There is highest standard of service and quality products designed to put the customers first. The core of the business is the customer supplier relationship. The company believes in long- term business relationships


Group Life Assurance:The Group Life Operation of Commercial Union Life Assurance- Pakistan (CULAP) provides a comprehensive range of Group Insurance and Employee Benefit Plans to employers. Since its launch on June 30, 1996 the Group Life Department has developed a significant client base consisting of Multinational s and Pakistani Companies.

The Group Life Department has been successful this far because they are customer focused. They provide solution to employer's problems after developing a deep understanding of their own particular situation. Therefore, when they transact business it is based on deep understanding and trust. They aim that there business truncation lead to long term mutually beneficial relationships

Another factor that has contributed to the company’s successful entry in the market is that it has assembled a team of professional personnel that understands the local market, is highly trained – including computer technology and is serviced driven. The group is there To serve its customers so that they rely on its advice and service.

CULAP’s Group Life Department plans to introduce a Group Pension Scheme, which should be available in the near future. The company hopes to be at the forefront of product development as it continually monitors the market in search of ways to improve the products and services it offers. The market is forever changing and CULAP hopes to adapt to its changes to keep pace with new trends and consumer requirements.


Individual Life Assurance:The Individual Life Assurance offers two products the Secure Education Plan and Secure Life Plan. The former will make sure that the customers are able to meet their children’s education cost. And the latter will provide with a Life cover for the rest of the customer's life to safeguard their families.

PRODUCTS OFFERED BY INDIVIDUALLIFE INSURANCE

The SeCUre Education Plan The key features and benefits of the plan are:

1. Security of EducationThe plans solve the College Fee Problems of parents. For over the last decade the cost of education has skyrocketed and is a major proportion of the family budget. As a result college education is a major family concern. Many parents, who fail to plan ahead, fail to fulfill their ambition to provide their children with the education they had intended. The education plan can give children a head start to be tomorrow’s leader in his/her chosen field.

2. CU’s Commitment to the Child’s Future:


Commercial Union has developed a method assisting in providing children the education they wish. Parents with CU’s financial consultants’ help decide how much they will need, when they will need the money and the consultants will advise parents hoe much, he/she estimates the parents needs to pay.

3. Annual Review:The company shall periodically evaluate the customer's plans and changing financial commitments, to ensure that the plan stays tuned to their needs.

4. Ease of Mind:No matter what happens to the parents, if they have Commercial Union’s Secure Education Plan, CU will assist them in providing for their Child’s future.

5. Protection In Case of Premature Death:If the parent(s) die before the completion of their child’s Schooling, Commercial Union will provide then with an income to assist with their child ‘s school fees.

6.FlexibiltyCU’s Secure Education Plan continues the cover for up to 12 months even if the premiums are discontinued, provided at least two annual premiums have been paid.

7. Enhancement of Cover:There is choice available for extra protection against disabilities, accidents and life threatening illnesses.

8.Tax Free Growth


The secure Education Plan lets one save without suffering any taxes on their investment gains.

10. Cashing In Your PlanOne may surrender the plan at any time. Or instead of surrendering, one may make partial withdrawals from the plan.

The SeCUre Life Plan: 1. Security For The years Ahead.The Life Plan provides life cover for the rest of ones life to safeguard their family. With the Plan one know s what cover the family needs now, and for the rest of their life, whatever happens.

2. Life Assurance Is Not Always Enough:The Secure Life Plan offers protection not only case of death but also in cases of illness and disabilities. The Plan will cover for Heart attack, Cancer, stroke, and renal failure or By pass operations. 3. Protection Against Inflation:Commercial union’s secure life Plan let one protect their savings from inflation.

4. Tax Free Growth

5. Your Family receives a lump sum if you die

6. Tailoring The Plan to Individual Needs:


There is Choice of 7 options, including Critical illness and waiver of Premium.

7. Option of increasing or decreasing the life cover.

8. Cash withdrawals possible

ORGANIZATION STRUCTURE(CULAP)

MANAGING DIRECTOR


FINANCE MARKETING EBS OPERATIONS

CFO/CS AGM AGM

INV ACC DSF H/O ACTIT UND

MKT DEPT

EBS ---- Employment Benefit service

CFO ---- CHIEF FINANCE OFFICERCFO ---- CHIEF FINANCE OFFICERCS ---- Company SecretaryAGM ---- Assistant General ManagerINV ---- Investment Department/FunctionACC ---- Accounts DepartmentDSF ---- Direct Sales ForceH/O ---- Head OfficeACT ---- ActuarialIT ---- Information TechnologyUND --- Underwriting


HUMAN RESOURCE MANAGEMENT AT CULAP--- an overview

EQUAL EMPLOYMENT OPPORTUNITY

At CULAP the management believes in promoting people on merit and on equal opportunist basis. There is a set career path, which an employee can look forward to. Achievement is the only criterion. The company believes in promoting people from within. It has a well defined career path for its development Officers'

CAREER PATHWAYS

Providing career pathways to its employees is emphasized a lot at Commercial Union. It believes that if one is looking for a career in management the sector chosen is less important Recruitment And Selection 1515

than the organization selected. What really matters is the caliber of the training and development opportunities.

Career paths are well defined both at Pakistan and at headquarters in UK. Though there are some difference because in the UK they are very well planned and detailed. However, in Pakistan also they are in line with the CU philosophy that employees should be provided with good career paths.

This is what one graduate entrant at UK described what CU has to offer:"What impressed me was the variety of career paths. Providing you have the potential to become a manager, there will be something to suit your interests whether you are technically oriented or prefer to get out and about and meet people"

A previous entrant in the insurance industry had to say about CU:"I was looking for a career in management and I have found it. The fact that insurance and financial services businesses has turned out to be so interesting is simple an added bonus"

The same kind of principal applies at CULAP( Commercial Union Life Assurance Pakistan). The company believes that there is no secret to success. Anyone can succeed. All one needs is to be prepared to put in handwork, think smart and uses the company guidelines. Then success will chase the employees and not the otherway round.Recruitment And Selection 1616

CAREER OPTIONS AVAIABLE TO EMPLOYEES

There are two contrasting pathways that an employee can follow at Copmmercial union. A employee can follow one of the two contrasting paths within Life Operations, both leading to management career. At Head Office the person will be involved in the design of the system and procedures needed to mange the new and existing products. At the Sales or CSC (Customer Service Center) an employee will be involved in managing people and resources to put them into practice.

PREPARATION AND SELECTION

SELECTION CRITERIAThe company looks for graduates who learn fast and get on well with people at all levels. The criteria for selection people at the H/O and CSC is different. For H/O roles, CU places particular emphasis on analytical skills. While the ability to think on ones feet and react positively to a wide range problems is vital for a succession in a sales career. Apart from theses requirements the selection is only on merit. These aspects are the same in Pakistan and the at headquarters.

APPLICATION AND SELECTION PROCESSThe defined application and selection process at CULAP is very comprehensive and is divided into three stages:

1. First Stage :


People first send there applications to the recruitment office. A recruitment fair an I also held.

2. Second Stage : The company decides which applicants it has to take further. Those people are invited to a first interview at the nearest CU office.

3. Third Stage : If the applicant is successful at the first interview stage he/she will be invited to spend two days at CU assessment center either at regional office, H/O or the training center at Kent. Assessment involves various exercises as interviews, group discussions, verbal and numerical reasoning tests all of which are designed to allow the applicant to demonstrate the qualities the company is looking for in its future managers.

In Pakistan these defined guideline and stages are not always followed. The process is cit short to make it simple. It is process is not as extensive and comprehensive. The defined application and selection process in Pakistan is altered and is mostly followeds in the stages mention below


1. The application stage`The applicant send in their resumes. If they meet the criteria then they are called for an interview.

2. First interviewThe first interview is mostly conducted by the HR departement and the applicants assessed on basic suitability issues and areas.

3. Second interviewThe second interview is conducted by future superisors and the employees and assed through the method of case study and presentation.

DEVELOPMENT AND EVALUATION

MANGEMENT TRAINING


Commercial Union offers excellent training for employees. whichever career path employees chose leading edge technology allows them to focus on exceeding the customers expectations. Training starts the moment a person joins, either at the UK office or at H/O in Croydon or London. It includes specially designed courses. In UK the training process takes place in three phases.

The first training phaseIn the First phase the employees spend time in each department to build an understanding of the complexities of insurance at every level. At the same they are involved in live project work, either alone or in a team, or studying for professional exams. Along with the vocational manager employees agree which of the optional training elements would best supplement their training program.

The Second training phaseThe Second Phase of training normally starts around the end of the employees fist year. It is more specialized, allowing the people to add dept of knowledge in a particular area and to take on more responsibility. Employees by this time become full time member of a working team.


Towards the end of the second year of their performance, the employees are measured against a benchmark and they will be ready to compete for the jobs they want within the company.

Training Programs for the two sides of Operations.

The two sides of operations have different training programs. Each takes about three years and gives an overview of the life and pension business, culminating in a responsible management position for those who demonstrate the right abilities.

Training at the Customers service centreWorking in a Customer Service Center employees come into direct contact with intermediaries and customers. They learn about the business from the bottom up, carrying out the clerical procedures that employees will later mange. In the closing stages of training the employees will be give a management position with total accountability for the work of up to 10 staff.

Training at the Head officeWithin Head Office the work is more technical and project based and the emphasis is on long term planning. The first requirement is to make oneself familiar with the many different departments, their systems and procedures. After


that the employees will get involved in project work, with responsibility for the overall development of a particular system or area of work during the final phase.

In Pakistan training is also different for the two operations i.e. at the H/O and the CSC. For both of these the company offers a Initial Training Course. Also the company provides its employees with a First rate On Going training on the job to its people. This on going training is similar to training at UK but is not detailed and comprehensive. In this respect the training and development of the employees is much better at UK.

CAREER PLANNING AND EMPLOYEE FUTURE

The company paces a lot of importance in providing a good future for its employees. Both the training routes provide employees with an excellent opportunity to progress rapidly. Recently the company has seen many people progressing very quickly to senior roles.In Pakistan as well this aspect is not ignored. The management makes it clear that it has good future for it employees and it’s the employees who have to make use of it. For this purpose the company has developed a path which the employees can follow to fulfill their future aspirations.


CAREER PATHThe career path for the people joining as development officers is As follows:

The career path of a development officer at CULAP is as follows:

* Development Officer Unit Manager Senior Unit Manager Assistant Branch Manager Satellite Branch Manager Branch Manager Regional Manager

PLACEMENTIn UK a person’s preference is taken into consideration as far as possible when making an offer. What is the persons background, his/her area of interest, and his/her inclination towards a particular type of work. All these factor are taken into account.In Pakistan this aspect in not paid a lot of importance. People are placed not according to their preferences instead they


are offered job that is available at that time. It does not matter if that is what the employee prefers or not.

COMPENSATION AND PROTECTION

BENEFITS OFFERED

There are a lot of benefits offered to CU employees. The benefits offered in UK are much better than those offered in Pakistan. The benefits offered to UK employees are:

18 day’s holiday( increasing with length of service) plus public holidays,

Flexible working hours ( which can add 14 day’s holiday per year)

Subsidized house purchase Profit sharing Low cost insurance and private heath care Subsidized lunches and luncheon vouchers Excellent pension scheme Interest free season ticket loans


Career –break scheme

The benefits offered to Pakistani employees are:

30 day’s holiday Private health care Subsidized lunches or luncheon vouchers Excellent pension scheme.

MOTIVATION

For this aspect the company has guidance for its branches all over the world. CU belives that keeping it employees satisfied and motivated is the most important aspect for success. Pakistan’s method and policy are in line with UK’s. there are many incentives and bonuses offered to motivate the people and to keep their performance at a certain level.

INCENTIVES

There are various incentives offered to motivate people to achieve the set target. The achievement targets are clearly communicated through the “Yearly Incentive Program”. The prizes offered are

Monthly Cash Prize Quarterly Cash Prize Annual Prizes Annual Convention


BONUSESBONUSES

To motivate people to give and promote good business philosophy, the company gives Annual Persistency Bonus if the employee achieves high levels of Persistency.Also a Recruitment Bonus is given if a employee introduces a person who joins the company and complete the Initial Training Course. Increases are given if that person performs to a certain level.

These bonuses and other compensation method will be discussed in detail later.

EMPLOYEE RELATIONS

SUPERIOR-SUBORDINATE RELATIONSHIPThe superior subordinate relationships are much more relaxed and friendly in the UK. There is fist name basis and an open door policy.

In Pakistan these relationships are more stiff and rigid. There is a lot of formality. The subordinate cannot use the first name of the superior , there is always a “SAHIB” attached with it. As regards to open door policy it is not as rigid. The subordinates don’t have get an appointment or previous


confirmation to see the boss. The superiors are approachable.

EXCERCISING AUTHORITYThe superiors in the UK do not lay a lot of emphasis on exercising undue authority. They have a very friendly, supportive, and guiding kind of attitude towards the subordinates. They try to help in as many ways as possible so that the subordinates learn, grow and give good results.

This situation in Pakistan is not like in the UK. The superior in Pakistan always have thus fear of losing their authority. That is why they exercise their authority very strictly and try to keep everything under their control. They feel that if they give a lot of leverage to their subordinates then they might perform better than them might leave them behind. Because of this attitude there is no delegation of authority and responsibility.

TOP LEVEL MANAGEMENT

Most of the people at the top in the UK are older people having many years of experience behind them. This is


because of the European influence of highly regarding the wisdom of the experienced people.

In Pakistan the situation is different. The top-level management of CULAP comprises of younger people as compared to UK. CULAP has top managers who are in their 40’s. There are very few older people. The reason for this is that the culture and Pakistani environment lacks people who have many years of experience with the right education and qualifications. Therefor the company has to hire young qualified managers.

STUDY OF COMPENSATION AND PROTECTION METHODS AT CULAP

Many people make a huge success of selling Life Insurance throughout the world. These people become successful because they learn the secret of success in our business. The secret is that there no secret to success. Any one can succeed. All you need is to be prepared to put in hard work, think smart and use the CULAP sales cycle technique. Then success will chase you and not the other way round. Simply organize yourself, your prospecting, approaching and the rest will follow That is a CULAP promise. No one who makes appointments and completes Personal Financial Reviews every week ever fails.


LEVELS OF PRODUCTIVITY

The company targets to its sales force to achieve. Normally a sales person looks to acquire two clients a week with an average of Rs. 8000/- premium. Those who will win prizes will probably do better but this is a yardstick to measure the performance of the employees. The company enocurages its people to “ Go for it”

“Fly high and go a little higher”.

INCENTIVES

There are a large number of really attractive cash prizes on offer during 1 an year that every one has an equal and fair chance of winning. The company acquaints every person with all the prizes and the qualifications required for each prize through a publication. This is done so that the employees make a mission to become a winner.

Different cash prizes competition are hesl during the year which motivates the people to giver their best. Also a convention is held in PC Bhurban.

Monthly Cash Prize:The top producing Development Officer receives a tidy sum of RS. 2,500/- and a certificate to record his/her achievement.


Quarterly Cash PrizeThe top producer in the quarter receive Rs. 7,500/-. This prize will be in the form of cash and naturally this money can be used as one wishes. The employee can splash it on self and the family or might like to save it. The choice is theirs.

The Unit Manager whose team produces the highest FYAPI will receive Rs. 10,000/-.Both winners of the quarter awards will receive certificates.

Annual Prizes:

There is a range of prizes to really aim for and to ensure that employees give their best, not only to gain recognition within the company, but also to financially better oneself.

Ten highest producers of the year will win prizes. The first prize is

A trip fbr two, to what IsThis trip is to a place that is commonly known as Heaven on Earth" - Dubai. Here the employees spend 3 nights and 4 days. The company arranges the stay at the famous Avari Towers which is renowned for its generous hospitality and luxury accommodation. The employees are encouraged to work hard to get the rewards of Dubai where they can enjoy lovely beaches, water sports, shopping and exciting night life. To further enhance the employees motivation and pleasure the company, In addition to the return flight and the accommodation,


gives employees Rs. 25,000 to spend .

The other prizes are listed below

Second Prize; Rs. 25,000/- Third Prize: Rs. 20,000/- Fourth Prize: Rs. 15,000/- Fifth Prize: Rs. 10,000/- Sixth to Tenth prizes: Rs. 5,000 each.

Naturally, all top ten producers will receive certificates.

Annual Convention

This convention is held for the Development Officers, Unit Managers and Branch Managers. All of the above can all qualify for the annual convention which usually takes place in the first quarter of the year. Those who qualify can look forward to a time of their life because the company pays for the employees and their spouse's air tickets and hotel accommodation, for three nights at the most beautiful and luxurious resort hotel in Pakistan- PC Bliurban.

BONUSESThere are basically two kind of bonuses for the development officers.

1. Annual Persistency Bonus

This bonus is given so that the employees to high quality Recruitment And Selection 3131

work throughout the year. The employees are told that they should give business that is high quality because high quality business stays on the books and therefore helps them, helps the client and it also helps the company.

To promote good business philosophy, the company will give its employees an annual bonus if they achieve high. levels of persistency. Everyone can qualify for this bonus. In fact the want everyone to qualify for this bonus. The amount of bonus depends on the employees performance alone. It could be as much as 5% of the employees total first year regular premium.

2. Recruitment BonusAlso a recruitment bonus is given to employees eho bring in good people to the company to work. Commercial Union tells its employees that it is their company and that the future prosperity of the company depends on how successful the company and its employees are in are in persuading quality people it, and help to provide clients with par excellence insurance services.

The company give the Development officer - RS. 1,000 for introducing any person who joins us and completes the initial Training Course. It does not stop there.

An additional Rs. 5,000/- and Rs. 10,000/- if your introduction performs to a certain level.

This means that you can earn up to RB. 16,OOO/-per introduction.

REMUNERATIONRecruitment And Selection 3232

The company claims that their remuneration packages are amongst the best in Pakistan. They always pay what they consider to be the best rate for any given grade. But over and above the basic pay the employees can earn whatever is their wish through their efforts in the form of commission, override and bonuses.

Given below are approximate financial packages enjoyed by the various positions in the sales force structure.

Development OfficerRS 4,000 + commissions + bonuses + incentives

Unit ManagerRS. 10,000 + commissions + bonuses + override + incentives

Senior Unit Manager RS 15,000 + commissions # bonuses + override + incentives

Assistant Branch ManagerRS 22,500 + commissions + bonuses + override + incentives + car

Satellite Branch ManagerRS 22,500 + commissions + bonuses + override + incentives + car

Branch ManagerRS 50,000 + override + carRecruitment And Selection 3333

Regional Manager RS. 60,000 + override + car

Minimum Qualifications for incentives:

Monthly Prize:Highest First Year Annualized Premium income (FYAPI) of the month.

Quarterly Prize:For the Development Officer, producing the highest FYAPI, provided a minimum of 16 policies sold with RB. 240,000 regular FYAPI.

RS 10,000 to the Unit Manager whose team, FYAPI, provided policies sold regular FYAPI, provided a minimum of 40 polices sold with Rs. 600,000 reguler FYAPI

Annual Prize:There are a number of prizes in the year included in the remuneration package. First Prize: To the highest producing Development Officer (provided a minimum of 50 policies SOLD with RS. 750,000 regular Recruitment And Selection 3434

FYAPI).

Second prize: To the second highest producing Development Officer (provided a minimum of 30 policies sold with RS. 450,000 regular FYAPI)

Third prize: To tile third highest producing Development Officer (provided a minimum of 25 policies sold with RS. 375,000 regular FYAPI).

Fourth prize: To the fourth highest producing Development Officer (provided a minimum of 20 policies sold with RS. 300,000 regular FYAPI).

Fifth prize: To the fifth highest producing Development Officer (provided a minimum of 15 policies sold with RS. 225,000 regular FYAPI).

Sixth to Tenth prizes: To the sixth to tenth highest producing Development Officers will qualify (provided a minimum of 10 policies sold with RS. 150,000 regular FYAI'I)

Annual Persistency Bonus:

For all Development Officers who sold at least 24 policies Recruitment And Selection 3535

in a year, with first year annualized. premium of RS. 200,000:

If persistency, based on payment of First Renewal Premium, is greater than 80% but less than 85% __ 2% of first year regular premium

If persistency, based on payment of First Renewal Premium, is greater than 85% but less than 90%__ 3% of first year regular premium

If persistency, based on payment of First Renewal Premium, is greater than 90% but less than 95%__ 4% of first year regular premium

If persistency, based on payment of First Renewal premium, is greater than 95% but less than 100% __ 5% of first year regular premium

Recruitment Bonus:For all Development Officers who introduce a Development Officer: If the recruited Development Officer passes the basic

training Course Prize of RS. 1,000/-

If the recruited Development Officer does Rs. 100,000 FYAPI with at least 7 policies, within the first .12 months of recruitment: Prize of Rs. 5,000/-

If the recruited Development Officer does RS 250,000 FYAPl with at least 17 policies, within first 12 months of recruitment prize of RS. 10,000/-


CAREER PROMOTION TARGETS:

Qualification For A Unit Manager

60 paid policies in a year Personal production FYP RS. 360,000 Key Performance Indicators

In a. year, a Unit Manager should: sell all the products in the CULAP range sell three riders (at the least) maintain persistency of 75% have no outstanding complaints satisfactory performance in course examination

BENEFIT/COMMISSIONRs. 10,000 p.m.. + 4.5% O/R + 35% PP

To Maintain A Unit Manager Contract

Minimum number of career DOs 10 FYP Rs. 2,880,000 480 paid policies in a year Personal production. 48 paid

policies


Key Performance Indicators:

In a year, a Unit Manager should: sell all the products in the 'CULAP range sell three riders (at ~e least) maintain persistency of 75(/1c, have no outstanding complaints satisfactory performance in course examination

Qualification For A Senior Unit Manager

Minimum number of career DOs 15 FYP Rs. 4,320,000 720 paid policies in a year Personal production 36 paid policies Key Performance Indicators:

In a year, a Senior Unit Manager shou]d: sell all the products in the CULAP range sell three riders (at the least)


maintain persistency of 75% have no outstanding complaints satisfactory performance in course examination

BENEFITJCOMMISSIONits. 15,000 p.m. + 4.5% + 1% 0/k + 35% PP

To Maintain Senior Unit Managers Contract

Minimum number of Units 1 Minimum number of career DOs 20 (10 self + 10 unit) FYF Rs. 5,760,000 960 paid policies in a year Personal Production 24 paid policies Key Performance Indicators:

In a year, a Senior Unit Manager should.. sell all the products in the CU LAP range sell three riders (at the least) maintain persistency of 75% have no outstanding complaints

Qualification For An Assistant Branch Manager


Minimum number of Unit Managers 2 Minimum number of career DOs 30 FYP Rs. 7,603,200 1268 paid policies in a year Key Performance Indicators:

In a year, an Assistant BranchManager should. sell all the products in the CULAF range sell three riders (at the least) maintain persistency of 75% have no oLltstanding complaints satisfactory performance in course examination

Rs. 22,500 p.ni. + 800 cc carCompany benefits .5% + 1% 0/k

Qualification For A Satellite Branch Manager

Minimum number of Unit Managers 2 Minimum number of career DOs 30 FYAP RS. 7,603,200 1268 paid policies in a year Key Performance Indicators:

In a year, a Satellite Branch Manager should: sell all the products in the CULAP range sell three riders (at the least) maintain persistency of 750/c have no outstanding complaints


satisfactory performance in course examinationRs. 22,500 p.m + 800 cc car Company benefits

45% + 1% 0/k

NETWORK OF EFU OFFICES

CITY NUMBER OF BRANCHESKarachi 26

Hyderabad 1Sukkar 1Quetta 1

Rahim Yar khan 1Goth Machi 1

Multan 2Faisalabad 2

Lahore 12Gujranwala 2

Sialkot 1Jhelum 1

Rawalpindi 3Islamabad 4Peshawar 3Abbotabad 1

Mardan 1

OBJECTIVES OF THE COMPNAY

The company says that all its customers they are highly


satisfied with the value for money that its products and service provide.

The employees rate the company as one of the best companies in the world to work for.

EFU’s return to its shareholders is at the top of the companies in the industry.

And the company’s competitors say that EFU are a difficult company to compete with.

The growth rate of the company consistently exceeds the industry best performer at a sustainable volume of business that allows it to achieve superior financial strength to fulfil its obligations and utilize its shareholders' equity efficiently.

The companies performance alone is the key dimensions of competitiveness, productivity, innovation, quality, cost and customer service keeps continuously improving to six sigma, i.e. perfection.

MANAGEMENT STYLE AND CULTURE AT EFU

It is companies policy to align and integrate the interest of the employees with best interest of the company for the collective good of all consistent with goals of the company. To achieve the company has included the following in its management style:

Open Communication Participative Climate Flexible Organization Negotiated Goals Self Directed Work Achievement


High Quality Professional Leadership At All Levels.It is the companies endeavor to continuously benchmark its organization structure, management system and rules and procedures with best in the class management practices, and to insure they are aligned and integrated with the companies vision at all times. The endeavor is to get everyone committed to the achievement of our goal-to be a world class company.

Organizational structure of EFU life

Chairman

Management Review Committee

Advisor HR development


RM DIRRM DIR GM OPERGM OPER BRANCH N EXEC DRBRANCH N EXEC DRGM ORGGM ORG TRAINING TRAINING

Information Accounts

Sales div Gp life advisor

New business

Claim services

HUMAN RESOURCE DEVELOPMENT AT EFU

Human resource Challenges :

The corner-stone of EFU’S Human Resources Development strategy rests on the belief that success and accomplishment of the Company will be determined by the success and accomplishment of its employees.

According to the company’s management the major challenge in realizing the company’s vision for growth and market leadership is, therefore, to attract, develop, motivate and retain people of the highest caliber and potential. The believes that its vision will best be achieved in an environment that encourages all members to lead a satisfying work-life. The company strives to offer its employees a challenging Recruitment And Selection 4444

and stable working environment, good compensation, and an opportunity for personal growth, development and advance-ment.

Human Resource and EFU’s work environment

The company’s intention is to build mutual respect, confidence and trust in all its relationships based upon our commitment to integrity, honesty, and competence. The company shares success with the people who make success possible. Together with its employees the company wants to build a quality organization that they are proud of and- committed to.

At EFU all are treated equally, fairly and justly. The company wants its people to feel respected, listened to and, to have a voice in how the affairs of the company are managed. Above all, the company wants friendships, balanced personal and professional lives, and to have fun in their endeavors.

PERSONNEL AT EFU LIFE

In total there are 800 staff employed by the Efu life. At the head office only 70 are salaried. Most of the personnel are commission based. The break up of the 800 personnel is as follows’

Field force 650 ---- 250 salaried + commission 400 only commission


Mostly the sales people entering are non salaried ( commission based) but if their performance improve and is consistent these people become salaries. This transformation usually takes place during a probation period in which the people are evaluated.

In the group life business there are only 12 people in the field force/

EQUAL EMPLOYMENT OPPORTUNITYEFU is committed to a policy of equal employment opportunities and welcomes people irrespective of their race or gender. All appointments arc made on the basis merit and candidates are placed in jobs for which they are best suited.

CAREER PLANNING AND LIFE- LONG EMPLOYEMENTThe companies provides its employees with life-long employment and career growth. The company’s employee development and qualification enhancement program provides opportunity to talented people to grow and rise to the highest levels of management through a policy of promotion from within and continuous development. In return the company demands from its employees dedication, hard-work and Professionalism.


HR FUNCTION AT EFU

The HR department performs a wide range of activities that benefit the company and its

employees.

The company hold its employees in the highest esteem and does all it can to increase their self-worth so that they can achieve fulfillment and full potential.

Pay and performance are linked and rewards and recognition go to those who consistently out perform

Through the HR function the work of all employees is directed through a comprehensive performance management system that interlocks business objective with individual goals targets and work plans

Evaluation of employee performance results and achievements.

Feed-back and counseling on results and performance:

Forming the basis for performance and potential review.

Merit increases

Salary positions

Career plans


Training and development.

PREPARATION AND SELECTION. RECRUITMENTRecruitment for the sales force at EFU life is mostly done by the method of “ EMPLOYEE REFERALS”. The employee who refer people to organization are expected to bring in people who are qualified and capable of meeting the job requirement. This method is used because this method ensure that people joining the organization will know before hand what s expected of them.

The company prefers not use any advertisement for recruiting as it does not want to attract all kinds of personnel people for the vacancies. Although it some does put in ad in newspapers specifying very carefully and in detail the nature of work and the kind of skills needed.

SELECTIION CRITERIA

The selection criteria is is simple. Thew applicants should be maured persons as they have to convince people to buy somethig for the future. There are two main requirement


A Bachelors degree Age should be 23 +

The application process is simple. The applicants have to fill out a application form and have to submit their documents.

DEVELOPMENT AND PLACEMENT

Once the employee are hired they are oriented to the company’s policies and procedures. After that they are placed in jobs and given the training needed to be productive .

THE development and placement at EFU life for the people joining from the sales personnel level consist of three different stages which can be summarized as follows:

Orientation

(Foundation course)

Training

Issuance of licenses


Placement ( Branching)

ORIENTATION Orientation involves introduction to the company its people, and the environment. It is mostly the responsibility of the person who refers the person to the organization. This is covered in the foundation course.

TRAININGTraining basically involves teaching the skills require for the job. For the sales job mostly selling skills are taught and then the employees are tested on those skill. Like orientation , the foundation course also looks after the initial training aspect. Other than that there is on the job training.

The foundation course

The foundation course severs the purpose of orientation and training both. It is a one week course that persons joining EFU life take. It is basic course and consists of introductions to company, its people and the industry. At the end of the foundation course there is test. The person are issued a license only if the clear the test. The contents and the basic structure of the foundation course is as follows:Recruitment And Selection 5050

Company background

History of life insurance

General coverage on life insurance

The company’s products

Basic selling techniques

Test for issuance of license

PLACEMENT TO THE BRANCHES

After selection the at head office and the issuance of the license the employees are placed to their respective branches. Mostly those branches are selected in which the person who referred the person works. In-fact in most cases the new employee is attached with the same person for additional training and guidance

PERFORMANCE APPRIASAL

At EFU life for performance appraisals quarterly targets are set and the results are compared with the target set. Also there is a method to check performance by keeping at standard that all non-salaried people can become salaried if they achieve a certain level of performance.

If a person become a salaried employee and his performance fall them he is again converted to non- salaried employee.


Compensation and protection

There pay and remuneration structure at EFU life is different than that at CULAP. The personnel are paid according to their status. The status depends on whether the person are salaried or non salaried. Thus two different type of paying structure are existing to compensate the sales force.

REMUNERATION Salaried employees ---- basic salary + 20% commission Non salaried employees ---- only 40% commission

BENEFIT:

Non salariedThere are no benefits for the non salaried people

Salaried For the peole who are salaried employees of EFU life there are benefits and service. The benefits are as follows:

Provident fund


Medical ( equvalent to one basic salary) Group life insurance 30 day leave

MOTIVATION

To motivate its sales force the HR department at the EFU life uses various techniques so that there is greater incentive for employee to for. This motivation the company believes will create a desire among to employee to perform better. And good performance would result in reward and appreciation leading to job satisfaction. This satisfaction them again become a motivator to achieve even better performance . Thus it is a complete cycle

MOTIVATORS

GOOD PERFORMANCE


REWARD/ APPRECIATION

JOB SATISFACTION


commercial union

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