Dear clients, reinsurers and colleagues :

Our Managing Director’s bright but challenging message for Twenty Ten reached everyone in the company as the year began. This is reproduced on the page across for the interest of our readers.

On another happy note, NJI continued its expanding role in the industry : our Executives being invited to speak at Conferences and Seminars, and participating in an international event.

Our Topical Report of last quarter is concluded in this issue and we hope it will evoke the usual interest of our reinsurers.

The issue also carries interview with our head of Islamabad Branch stating the challenges faced and his life’s philosophy.

As usual we have our concluding pages for our Family and they are there for your viewing pleasure.

ALHAMDULILLAH! We have achieved written premium of more than Rs 4 Billion in the year 2009. I congratulate all Members of Staff, Development Officers and Executives on their commitment, dedication and hard work. Year 2009 was a difficult year but all of you proved your mettle by performing against the tide.

I also take this opportunity to wish you all a joyous and prosperous 2010. However, at the same time, I would like to caution you that business environment continues to be difficult and competition is hard but remember that in the present gloom, New Jubilee Insurance should project itself as a beacon of solidarity, reliability and integrity. This can be achieved by working harder in developing and selling products which fulfill the present day needs of our clients besides covering their traditional risks, by enhancing the standards of servicing to our clients, by communicating more amongst ourselves and by renewing our commitment to be the best every day of 2010.

As always new year’s target appears daunting but again, as always New Jubilee spirit to rise and overcome challenges will prevail - inshaAllah!

Tahir Ahmed
Managing Director & Chief Executive

Managing Change

“MANAGING CHANGE” was the theme of annual Insurance and Takaful Conference organised by the Pakistan Society of  Actuaries (PSA).

The president of PSA, Mr Nauman Cheema said, “The local insurance industry needs to bring a fundamental change in which it acquires and manages business. The challenges are compounded by Pakistan specific factors such as high inflow, low expected GDP growth, decrease in real disposal incomes and the phenomenon of terrorism.

“The objective of the Conference is to discuss and share these issues so that insurance companies can better formulate their strategy to manage risks in a changed environment.”

With this  well-stated objective, keynote speakers from the industry  addressed an audience of senior executives from insurance, banking and other related sectors. Professionals from actuarial and other professions were also present.

Morning session had four eminent speakers  to enllghten the audience:

Left to right:: Mr Tahir Ahmed, Chairman, IAP; Mr Samee ul Hasan, Senior Consulting Actuary, Akhtar & Hasan; Mr Nauman Cheema, President, Pakistan Society of Actuaries; Ms Nasreen Rashid, Executive Director-Insurance, Securities & Exchange Commission of Pakistan; Mr Shahrukh Sabzwri, Divisional Head Acturial, State LIfe Corporation of Pakistan and Mr P Ahmed, CEO, Pak-Qatar Family Takaful Limited.

Challenges Confronting the Industry, a talk  by Ms Nasreen Rashid, Executive Director, Insurance Securities & Exchange Commission of Pakistan.

Development of Insurance Sector a presentation by Mr Tahir Ahmed, Chairman, Insurance Association of Pakistan.

Managing Change from State LIfe’s Perspective by Mr Shahid Aziz Siddiqui, Chairman, State LIfe Corporation of Pakistan.

Persistency and Fairness, a discussion by Mr Samee ul Hasan, Senior Consulting Actuary, Akhtar & Hasan.

Afternoon session of the Conference gave the participants choice of technical sessions with two of  them running parallel.

Loss Adjusting Profession and Overview of Legal, Technical and Profesional Requirements conducted by Mr Afzal Nanjee, Director Nanjee & Company; running parallel with Issues Relating to Extending Terrorism Cover in Pakistan by Mr Mahmood Lotia,  of EFU General Insurance.

Issues related to Takaful by Mr Jabran Noor, Consulting  Actuary at Dubai office of Milliman Inc running parallel with Blue Ocean Strategies - the future of Business Acquisition of Life Insurance Companies conducted by Mr Mohammed Ali Ahmed,  DGM, EFU Life Assurance Ltd.

Marketing Environment by Mr Fred De Beer running parallel with Concerns Related to Insurance and Takaful Accounting conducted by Mr Farrukh Rehman, partner in A F Ferguson & Company.

We would like to share highlights of Mr Tahir Ahmed’s paper on Development of Insurance Sector, for the interest of our readers.

It was a research-based paper tracing 25 years of written premium  of the insurance industry of Pakistan projected graphically with its peaks and troughs.

Written Net Premium class-wise showed that  Fire or Property  business grew steadily year-by-year.

Another interesting revelation was that 2007 the was most fruitful year for the industry with Pre-Tax Profit, Shareholders’ Equity, Total Assets, Total Investment, Investment Income all at a peak in that year.

Against this background of statistics, Issues pertaining to the industry were highlighted and discussed:
Bank limits / insurer panels
Policy workings
Outstanding premium / insurance debt
Bancassurance rules
Fit &  proper criteria
Takaful windows
Insurance education / awareness

To manage the changing enviornment and the risks hitherto, Mr Ahmed said that the industry should gear its efforts towards the following products which had great  potential for the future:
Motor third party liability
Health insurance
Terrorism insurance
Bancassurance / personal lines
Crop insurance
Directors and officers liability  /  professional indemnity
Macro insurance

Role of Pakistan Society of Actuaries  in promotion and development of the insurance industry is commendable in the conferences they organise annually.

PICTURE CAPTION
Left to right:: Mr Tahir Ahmed, Chairman, IAP;  Mr Samee ul Hasan, Senior Consulting Actuary, Akhtar & Hasan;  Mr Nauman Cheema, President, Pakistan Society of Actuaries;  Ms Nasreen Rashid, Executive Director-Insurance, Securities & Exchange Commission of Pakistan;  Mr Shahrukh Sabzwri, Divisional Head Acturial, State LIfeCorporation of Pakistan and Mr P Ahmed, CEO, Pak-Qatar Family Takaful Limited.

NJI - Swiss Re
Taking the opportunity of his visit to  Swiss Reinsurance, Mr Tahir  Ahmed presented to their  retiring Vice President-Client Markets, Mr Rene Keller,  a sliver plaque as a memento of NJI’s long and fruitful association with him.

21st FAIR Conference
This was attended by  Mr Tahir Ahmed who is seen here at the Pre-Conference reception withDr Mahathir Mohamad, former Premier of Malaysia, in the foreground.

More details are on page 12.

Turbine
THE WATER STRIKES AND TURNS the large blades of a turbine, which is attached to a generator above it by way of a shaft. The most common type of turbine for hydropower plants is the Francis Turbine, which looks like a big disc with curved blades. A turbine can weigh as much as 172 tons and turn at a rate of 90 revolutions per minute (rpm), according to the Foundation for Water & Energy Education (FWEE).

There are three main types of water turbine used in hydropower plants are:
·       Francis Turbine
·       Kaplan Turbine
·       Pelton Wheel

Francis Turbine : The Francis turbine is a reaction turbine, in which the working fluid changes pressure as it moves through the turbine, giving up its energy. A casement is needed to contain the water flow. The turbine is located between the high pressure water source and the low pressure water exit, usually at the base of a dam.
They are used where a large flow and a high or medium head of water is involved. They are similar to a waterwheel. They are also called a runner. A circle of guide vanes surround the runner and control the amount of water driving it. Water is fed to the runner from all sides by these vanes causing it to spin.

Kaplan Turbine : The Kaplan turbine is a propeller-type water turbine which has adjustable blades. The Kaplan turbine was an evolution of the Francis turbine. Its invention allowed efficient power production in low-head applications that was not possible with Francis turbines.

They are used to control where a small head of water is involved. Head implies how much potential energy there is in the system i.e. small head means small body of water therefore small amount of potential energy. The variable pitch feature permits the machine to operate efficiently over a range of heads, to allow for the seasonal variation of water levels in a dam.

Pelton Wheel : The Pelton wheel is among the most efficient types of water turbines. It is an impulse machine, meaning that it uses the principle of Newton’s second law to extract energy from a jet of fluid. The water leaving these wheels typically had high speed, and carried away much of the energy. When the rim runs with the speed of the water jet, the water leaves the wheel with very little speed, allowing for a very efficient turbine.

They are used where a small flow is available with a large head. The Pelton wheel has small buckets all around its rim. Water from the dam is fed through nozzles at very high speed hitting the buckets, pushing the wheel around.

Generators
 As the turbine blades turn, so do a series of magnets inside the generator. Giant magnets rotate past copper coils, producing alternating current (AC) by moving electrons.

The generators are comprised of four basic components: the shaft, the excitor, the rotor, and the stator. The turning of the turbines powers the excitor to send an electrical current to the rotor. The rotor is a series of large electromagnets that spins inside a tightly wound coil of copper wire, called the stator. “A voltage is induced in the moving conductors by an effect called electromagnetic induction.” The electromagnetic induction caused by the spinning electromagnets inside the wires causes electrons to move, creating electricity. The kinetic/mechanical energy in the spinning turbines turns into electrical energy as the generators function.
               
Transformer
 The transformer, another component, takes the alternating current and converts it into higher-voltage current. The electrical current generated in the generators is sent to a wire coil in the transformer. This is electrical energy. Another coil is located very close to first one and the fluctuating magnetic field in the first coil will cut through the air to the second coil without the current. The amount of turns in the second coil is proportional to the amount of voltage that is created. If there are twice as many turns on the second coil as there are on the first one, the voltage produced will be twice as much as that on the first coil. This transference of electrical current is electrical energy. It goes from the generators to one coil, and then is transferred through an electromagnetic field onto the second coil. That current is then sent by means of power lines to the public as electricity

Power lines ; Out of every power plant come four wires: the three phases of power being produced simultaneously plus a neutral or ground common to all three.

Outflow : Used water is carried through pipelines, called tailraces, and re-enters the river downstream.

Currently, Pakistan is facing energy crisis due to shortfall of electric production. The current shortfall is estimated to be around 4,000 MW during peek summer. The total available capacity of power generation in Pakistan is approx. 14,000 MW in which 8,308 MW is contributed by Hydro Power Stations. Government is very aggressively working to overcome this situation by allowing constructing new thermal power stations.

There are a few hydro projects such as Nellum Jehlum and small projects which are under construction. But, there are a number of potential projects in the country, totaling thousands of mega-watts capacity. Apart from these big reservoirs, there are a large number of potential medium and small scale and run-of-river projects. Additionally, there are a lot of sites available for mini and micro-hydropower projects. Besides, there is an immense potential for exploiting waterfalls in the canal network, particularly in the Punjab.

Unless more funding is devoted to developing these renewable resources we may find ourselves in the midst of the worse energy crisis in the future. 

Head of NJI Branch at the
Federal Capital of Islamabad

You have had a meteoric rise from SM to SVP. What do you attribute this to?

I achieved this success by the grace of God with the guidance of my   M D and the support of my senior colleagues. I always try to do things in a simple way and give my best service / attention to my clients : taking care of  NJI and and the client’s interest.

SVP Ejaz Mahmood, Head of Islamabad Branch

Working from the Federal Capital of Islamabad, tell us how you see this as an advantage, as well as what are the accompanying challenges?

Islamabad is a beautiful city with very pleasant climate and is well maintained with relatively less business activity compared to other business hubs like Karachi and Lahore. There are some business opportunities arising in the sector represented by NGOs (Non-Governmental Organisations) and infra-structure projects, since last  few  years. Islamabad is probably one of the toughest city to work for any marketing person, because of bureaucratic attitude of people here.
Can you tell our readers what makes a successful branch head and attributes one should cultivate to reach the position?

A successful branch head must have leadership qualities to lead the people  from  the front : guide them to success. I think the position requires human resource management skills, working as a team player, ability to handle stress, ability to handle multiple tasks, be cordial at all times, knowing your customers, prioritising your daily work routine, disciplined and organised working and above all quick decision making. Also, he must be respected because of his knowledge and skills and have clear thought on each and every decision he takes.

When I was given charge of the branch and given the responsibility to lead the branch, it was a big challenge for me to organise the branch so as to give best ground / opportunity to our development officers as well as office staff to do the things timely and accurately. I always shared credit for my work with my colleagues.

Can you tell us about your personal success that you are most proud of.

I have worked in different fields and achieved  many successes, but I am not proud of any particular one. My mind is more towards doing work in humanitarian projects.

What in your job gives you most satisfaction.

There is no doubt when you achieve your targets and run a smooth operation in your work, it is satisfying but my satisfaction is based on my clients, subordinates and colleagues’ satisfaction. When they are happy and satisfied, I also feel satisfaction.
Tell us about your interests outside your job.

Reading books on different topics especially Islamic History and comparative religion related books is my interest outside the job.

Would you like to share your life philosophy or an adage with our readers?

Here I would like to share a quote:  “To give pleasure to a single heart  by a single kind act is better than a thousand heads bowing in prayer.”

21st  FAIR  Conference

OUR MANAGING DIRECTOR Mr Tahir Ahmed attended the  21st  F A I R Conference in Kuala Lumpur in October 2009.  Dr Mahathir Mohamad, former Premier of Malaysia and renowned outspoken leader of the developing world was the Keynote Speaker. The Conference was jointly organised by Malaysian Re and Labuan Re. It provided participants an excellent opportunity to hear perspectives of experts, not only on the key challenges to the (re)insurance market and the lessons learnt but also opportunities for  networking with regional and international reinsurers and clients.

The key topics covered were :
Crisis Impact on the African & Asian Economies
Financial & Economic Turmoil
Opportunities for (Re)takaful as a Viable Alternative
Optimising Asset Liability Management during Financial Crisis & Beyond
Managing Business Performance with Enterprise Risk Management

Above l to r:  Mr Khurram Nasim Assistant Executive Director, EFU General;  Mr Azfar Arshad, JEVP, New Jubilee Insurance Company Ltd;  Mr S. K Ahmed, Consultant National Insurance Company;  Mr Ali Raza, Agriculture Head, Faysal Bank Ltd and Mr Kashif Umar Thanvi, Agriculture Head, Habib Bank

Modernising Pakistan’s Agricultural Sector

INVESTMENT & MARKETING CONFERENCES (IMC) organised a conference on “Modernising Pakistan’s Agricultural Sector” in  December  2009 at the Karachi Marriot Hotel.

A diversity of stake-holders in the agricultural sector of Pakistan viz farmers – growers, agri bankers, agri insurers, agri executives, exporters, government and association officials gathered at the conference. Minister for Agriculture, Government of Sindh Mr Ali Nawaz Shah was the chief guest and Dr Zafar Altaf, Chairman Pakistan Agricultural Research Council was the keynote speaker.

Azfar Arshad (JEVP Operations) was invited as a panel speaker on the topic of “Agricultural Credit & Insurance”.

During the session, Mr Azfar briefed and answered questions of participants on progress of crop insurance in Pakistan. He stated that the crop insurance model in vogue in our country is unique and very different from such endeavours in other parts of the world. The Pakistani model is completely independent of government support to insurance companies. This is perhaps the first instance that private sector insurance companies have volunteered to provide cover to banks and farmers who form the back-bone of our economy. Many participants expressed their appreciation of the high quality of panel discussion on agricultural credit and insurance.