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NIC planning to set up reinsurance company with private sector sharing

KARACHI (April 17 2003) : Pakistan's state owned National Insurance Company Limited plans to start a reinsurance company, in collaboration with the private sector.

The NIC, during the past three years, has emerged as the strongest general insurance company of Pakistan.

The company has proved its excellence and industry leadership especially in the aviation and energy sectors and, to face the challenge of privatisation of public sector entities, also aims at joining hands with the private sector to set up a non-life insurance company with a sizeable paid up capital.

The Board of Directors of National Insurance Company Limited has approved the Annual Accounts for the year ended December 31, 2002, and has greatly appreciated the continuous outstanding performance of the Company during the last three years.

The Company, under the leadership of the new Board constituted in 2000, has achieved an all-time high Gross Premium of over Rs 2.5 billion, whereas the total Reserves, including capital, now amount to over Rs 10.4 billion.

The Company, during the past three years, has surpassed its targets.

The main highlights of performance from 1999 to 2002 are.

— Increase in Paid Up capital from Rs 5 million in 1999 to Rs 2 billion;

— Increase in Total Reserves & Capital by 68 percent to over 10.4 billion;

— Increase in Gross Premium by 36 percent to over Rs 2.5 billion;

— Increase in Claims Settlement Ratio from 43 percent to 77 percent;

— Increase in Underwriting Profit by 59 percent to over Rs 1.2 billion;

— Increase in Investments by 27 percent to over Rs 9.5 billion;

— Increase in Investment Income by 17 percent to over Rs 1.2 billion;

— Increase in Pre-tax Profit by 32 percent to over Rs 2.2 billion;

— Increase in Income Tax & Dividend by 34 percent to over Rs 1.3 billion; and

— Decrease in Management Expenses Ratio by 28 percent.

These achievements were possible because of the following revolutionary steps:

— Hiring of professionals under a monetised salary package scheme;

— Setting up of an Investment Department and diversification of Investments;

— Efficient and timely finalisation of accounts and adoption of international accounting standards;

— Initiation of marketing efforts;

— Setting up of a Human Resource Department and introduction of participative management; and

— Setting up of an Information Technology Department and computerisation of the Company.

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