Importance Of Insurance Sector Economics Essay

Importance Of Insurance Sector Economics Essay The study is about the performance analysis of insurance sector of Pakistan. Financial safety is not stable in todays world. It does not matter how big earnings we have for a month or how huge savings we have there are often situations beyond our expectations or control. We cannot make us safe completely. This is why we need to take all the safety measures to secure our financial state and our lives as well. And to do this the best way is to have insurance. Insurance can be the best safe measure for the financial losses and the loss of life. Even if anybody has huge savings secure in a safe place there can always be some type of catastrophe that can pull out all of the savings. In such kind of situations insurance can only be the security measure that makes anybody safe and secure. When a contract is made with an insurance company that contract is called insurance policy. Insurance is basically a transfer of risk for transferring the risk on the company in return insurer must pay som e agreed amount called the premium. A company may cover all the loss or some part of it depending upon the policy. Insurances policies or contracts purchased when anybody feel that it is not possible to bear the loss completely. For example sudden health condition like any accident, heart attack, or anything else that may cause a serious loss of life or permanent loss or injury. In the same way financial accident may happens like house burn, theft, car accident, or property stolen or any business liability. These things are so expensive that anybody cannot pay all these losses or some of them from own pocket or savings. In these kinds of situations insurance helps a lot a person pays a small amount of money for the promise that a loss will recovered if any accident happens. Insurance is nothing but an agreement between an insurance company and a person to pay an amount for compensation in shape of occurring a loss of insured property or life. The amount can vary from a thousand to millions depending upon the insurance policy and premium agreed. Importance of Insurance Sector Insurance sector is very important sector in any economy. Because individuals and companies keep investing in new ideas in new businesses and in new ways of doing businesses. For doing that individuals and companies have to take a lot of risks and to avoid that riskiness or loss of investment or other important resources companies and individuals go for insurances to protect their investments or transfer of risks. In Pakistan insurance industry is 7th largest industry of the whole economy. Pakistan is a large country having a population near about 200 million of which majority are Muslims. As a religious belief many people avoid insurance to improve their living standards. About 65% of the population lives in rural areas and 60% to 70% people live below poverty line and their earnings are less than 2$ a day as a result less income to spend a less educated people as a result insurance industry in our country could not grow well as compare to other countries in the world. Economic Impact Insurance industry in Pakistan known as inadequate and in efficient less innovative products of insurance and monopoly of single state own insurance company name as state life insurance company of Pakistan. In 2001 state life insurance captured 80%of the total insurance market of Pakistan. And in 2005 the share was 74% of the total market. Though the share of state own company has go down in last few years and the share of private companies has increase a lot. But still insurance sector in Pakistan could not grow as compared to the international standards. The major reason of not growing the insurance industry in Pakistan is that the people are more religious and avoid insurances and companies do not offer innovative insurance products. Further insurance is divided in to two parts one is life insurance and the other is general insurance. In general insurance all other insurances include other than life insurance. Now five insurances companies are dealing in life insurance business of which four are private owned companies and one is state owned company. Out of those four private companies two are local life insurance companies and remain two are operating as foreign insurance companies. Performance and Growth Till 2005 the total amount received from policy holders in shape of premium 62% of total premium is of general insurance and remaining is of life insurance. Life insurance requires more capital. (SECP, 2007). About life insurance life insurance is divided into two major parts individual life insurance and group life insurance. Individual life insurances have big part in life insurance business which is 79% of total life insurances. And 20%share of group life insurances both group and individual life insurances have a 99% share of total life insurances. The other reaming 1% of total life insurance is of pension plans, health insurances, and children education plans etc. (SBP Report, 2005) If we see historically major life insurance business is owned by state owned company which is state life insurance company. State life insurance corporation or (SLIC) of Pakistan is the only government owned corporation that was made by merging 41 insurance companies in process of nationalization in early 1970(SBP, 2005). From that time state life insurance corporation became the leader insurance company in the country and having a 76% share of life insurance business. (SBP Report, 2005) Through the share of state life insurance corporation has decreased as compared with past but still state life insurance corporation has the major portion of the life insurances. But compare to international markets Pakistani market do not grow that much compared with other countries. There is urgent need for government to take steps to aware the people of Pakistan that insurance is beneficial for them so that the market may grow quickly and more investment come in Pakistan which is ultimately good for local economy and people of Pakistan. (Annual reports of life insurance companies 2001-2005) The above picture shows the overall performance of the insurance business in Pakistan done in the years of 2001 to 2005. The average growth in profits were almost 14% which a very handsome growth in a developing country. And the average ROA means return on assets is .4% which is a good result. Return on assets shows one rupee of asset generated the percentage of profit. Now about general insurances national insurance is the only state owned company that deals in the general insurance business in the country. Where as many private companies deals in the business of general insurance. There are five major categories of general insurance motor insurance, fire insurance, marine insurance, health insurance, and last one called miscellaneous insurance. Motor insurance having the largest share of 48% of total general insurance business. The reason behind this huge share is increasing number or cars on the road. Marine insurance having a share of 21% of total general insurance business. It is linked with the international exports and imports of services and products. Fire insurance is having a share of 18% of total of general insurance business and it is linked with the growth of industrial and construction business. Health insurance is having a 6% share of total of general insurance business. And miscellaneous insurance having a remaining share of 7% which includes aviation insurance, cash insurance and travel related insurances. (Insurance association of Pakistan, 2006) General insurances business is largely dominant by private companies, Government owned company having a share of 14% of total of general insurance business. Whereas a huge share is owned by the private sector companies which is 82% of the business of general insurances. And remaining 4% share owned by foreign companies. In the past few years Government owned companies have lost their share in the business of general insurances. (Insurance Association of Pakistan, 2006). The general insurance business has shown an outstanding performance in terms of profits. The average increase in profits over the five years was 52% per annum. And if talked about the return on assets it also showed a great result. The overall return on assets for over a five year period was 8%, which is a remarkable outcome. (Annual Reports of General Insurance Companies, 2001-2005) Now about the overall performance of insurance companies, before this section the individual performance of life and general insurances business was shown. In this section comparison of both life and general insurance would be shown which would show the overall picture of insurance industry of Pakistan. The map below shows the growth of premium, net profit growth and assets growth for life and general insurance business as well. The map below gives a comparison between general and life insurance premium for the five year period. The overall average growth in life insurance business has been 28% per annum. The average rate of growing of the general insurance business has been 22% per annum. Which means life insurance business is growing greater than general insurance business. (Annual Reports of Insurance Companies, 2001-2005) The below map will show the growth in profits of life and general insurance business over five year period. The average growing rate for the life insurance business has been 14% every year. And the average growing rate for the general insurance has been 52% a year. It clearly shows that the profits of general insurance business have grown much faster than the life insurance business. (Annual Reports of Insurance Companies, 2001-2005) History of the Selected Companies Jubilee Life Insurance Jubilee life insurance claims to bring global skills to Pakistan. For more than 15 years Jubilee life insurance doing business in Pakistan and claims to provide a better life, and the life of security and safety. Jubilee life insurance established in Pakistan in June 1995 as a public company, under the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s ordinance 1984. Jubilee life insurance starts its operations on June 1996. Jubilee life insurance companies shares are listed on stock exchange with paid up capital of 627 million rs. Jubilee life insurance proud to be having leading industries board of directors, and having the ability and experience to give Jubilee life insurance a better future for the people of Pakistan. Jubilee life insurance is under the Aga khan fund for economic development Switzerland. It is the monetary growth wing of Aga khan development network. It is a group of private agencies development looking for improvement of living conditions in selected areas of under developed countries. The association of Jubilee life insurance with Aga khan development network permits to attracts its worldwide knowledge and funds to give our customers in Pakistan with the finest insurance option already there in the country. Jubilee life insurance customers can be feeling safe in information that our process are secured by a globally accepted organization with worldwide excess. With popular assignments around Africa and Asia, Aga khan fund for economic development is one of the world leading private growing organizations active in the whole industry. EFU

Proposal To Reduce Unemployment Essay examples -- Economics, Unemployme

In the past fifty years the economy of the United States has changed dramatically, whether it be the social or economic status. What can be said is that with the current recession that has taken place the lives of millions of Americans are being affected everyday. More jobs are being cut, and newer job opportunities are being taken away because of insufficient funds or lack of education. What I am planning to propose is a budget that will drastically change the way the economy has been looked upon in the last century. More so I plan to introduce a way to fit a newer form of a capitalist economy into the government system, mainly to increase the percentage of American work force between seventy-five percent to eighty-five percent to preserve better living conditions. First thing that has to be looked upon when we think of unemployment are the unemployment benefits. Unemployment benefits can be described as a back door for employees in the situation that they lose their jobs. The unemployment benefits provides temporary financial assistance to eligible workers who are unemployed through no fault of his/her own. Under this, each state administers a separate insurance program to provide financial service to those qualified under state law. In order to meet these requirements an employee must have a base period, or wages earned during a certain time. The base period is usually the first four out of all five calendar quarters prior to the time a file is claimed. Now there are two ways of filing a claim. One is filing a claim in the state that one resides in. the other would be to file a claim in a non-residential state. Shortly after two to three weeks of filing a claim, an unemployed worker should rec... ... for retirement. After a six month period, the workfare laborer is allowed to apply for a minimum wage job in regular workforce and leaves his/her workfare job that is passed on to another person in need. In a recap, the three policies introduced, the Unemployment Reformation Act of 2059, the Infinite Education Opportunities Program Act, and the Unity Tax, will be a vital part in restoring and surpassing expectations for decreasing the percentage of Americans unemployed by ten to fifteen percent within the next six to eight months. I believe that with these policies the chances of a recession will not occur for a long period of time. For that matter, a recession may not occur again depending on how successful the unemployment plans develop. Nevertheless, I predict that by the year 2109 the employment rate for Americans will reach eighty-three to eighty-five percent.

Alan Keith as Effective Leader

Alan Keith is a chief accounting officer and controller for the Turner Distribution Company. He was recruited as a part of the acquisition team, but his inborn professional qualities and skills made him effective leader. When he was asked to take the role of vice president of business operations in Hanna-Barbera studies, he agreed and moved to Los-Angeles to meet his new destiny. His task was challenging as he had to re-invent completely Hanna-Barbera studios. He realized that that was the sphere where leadership worked at it best. And he appeared to be true. Speaking about Keith’s leadership qualities, it is necessary to underline that always knows what is important for him, for his working team, he realizes his strengths and weaknesses, driving forces and pitch falls. Moreover, Alan seems to be aware of when it is necessary to draw a line. He is an effective leader possessing clear values and objectives as well as self-confidence, savvy, persistence and knowledge. It is necessary to admit his personal qualities such as passion, empathy strength of a character, humor, wisdom reliability, sensitivity, creativity at work, common sense, etc. Alan Keith states that one should know himself, because it helps to overcome challenges, ethic dilemmas and problems, to communicate with people having different thoughts and ideas, to make relevant and complex decisions, to define the sources of satisfaction and relaxation if necessary. Alan Keith believes that true leader should to be clear about his own values, priorities, and preferences and not let someone else, or society, define them for him, because by clearly identifying those values, priorities, and preferences he can articulate what he wants. One more quality is willing to commit meaning besides being self-aware and shrewd; Alan needs not to be afraid of responsibilities and duties. For him, being a leader requires sacrificing your free time, to put others before yourself, etc. Alan Keith became successful because he confronted traditional culture with fresh radical ideas. Moreover, focus on creativity contributed significantly his personal and career success. Alan realized that studio was ruled by manufacturing philosophy. Keith said: â€Å"It was about doing it cheaply, getting it out the door and getting it on the air as quickly as possible†. (p.9) Studio’s motivation was driven by volume, not quality and creativity. The factor, as usual, had highly centralized structure meaning that all decisions about creativity were made only by several people. That system damped creativity and Alan Keith managed to change the situation and to make studio one of the leading in the world. He realized that something had to be done quickly; otherwise, all efforts would be in vain. Alan Keith managed to re-shape corporate vision and perception of team work at the studio. He emphasized the role of creativity for team members replacing and replaced manufacturing mentality. Cartoon animation is art and only then manufacturing. Keith stressed: â€Å"It was a huge struggle to get to the place where we could actually admit that all we really care about right now is bringing the right kind of creativity into this organization†. (p.9) As a result, studio produced thirty-nine successful cartoons with different characters. Keith managed to change everything: thinking, organizational structure, vision and ways of operating. Keith staked on deeper connection with people and appeared right. Studio climate changed as well: â€Å"We did everything from completely overhauling and doing a face-lift on the space so that it spoke to the creative spirit to encouraging anybody in the company†. (p11) Alan Keith succeeded because he dedicated himself personally to developing leadership within organization. Alan Keith faced different cultures, thoughts, ways of life, and he did seize the opportunity to lead. Actually, I don’t see any weakness in his leadership style. I understand that there are no perfect people and each person has certain weaknesses. The only thing I can mentions is that he should be less emotional. In certain cases, personal emotions may lead to failure. However, this is not Keith’s case. Speaking about exemplary practices of leadership Keith outlines five of them which seem the most important: model the way, inspire a shared vision, challenge the process, enable other to act and encourage the heart. The first practice is modeling the way. It suggests finding choice by clarifying personal values and objectives; setting the example by aligning actions with shared values. Alan Keith realized if he wanted to gain commitment and achieve the highest standards, he should be the model of behavior for others. He was always clear about his guiding practices. Alan Keith argued that he leader from what he believed. He stressed that leaders should have their choice give voice to their values and believes. The second practice is inspiring a shared vision. Alan Keith proclaimed creativity as shared vision of the studio. Creativity helped him to rejuvenate decaying organizational practice. The next practice is challenging the process. Keith always ventured out. His success is confronting traditional culture with creative ideas. He challenged the process by innovative products and cutting-edge services. Alan Keith is true pioneer as he steeped out in the unknown. The fourth practice is enabling other to act. Keith managed to foster collaboration and increased trust among leadership and simple workers. He engaged everybody in teamwork realizing that people should feel committed and strong. Finally, the fifth practice is encouraging the heart. Keith created community spirit and celebrated values and victories as celebration is considered effective motivational tool. Alan showed appreciation for individual excellence. Summing up, Alan Keith has all the makings of effective and successful leader. He is perfect both as leader and a person.

The Grapes Of Wrath By John Steinbeck - 1190 Words

The Grapes of Wrath April 14th, 1939, John Steinbeck published the novel, The Grapes of Wrath. The novel became an immediate best seller, with selling over 428,900 copies. Steinbeck, who lived through both the Great Depression and the Dust Bowl, sought to bring attention to how families of Oklahoma outdid these disasters. Steinbeck focuses on families of Oklahoma, including the Joads family, who reside on a farm. The Joad family is tested with hardship when life for them on their farm takes a corrupt turn. Steinbeck symbolizes the Great Depression and Dust Bowl, as the monster, by focusing on bringing attention to how the families in Oklahoma bypass the disastorous weather, greedy bankers, and also the unreceptive greeting by the†¦show more content†¦People of Oklahoma are lucky to escape the grasp of Valley Fever, a plague the Dust Bowl is notorious for. As for families and their farms, the livestock would suffocate from the blowing dust. Corn stocks are blown over and have the covering of ti ny golden nuggets, draining any means of life. Oklahoma life was growing to be unfathomable for the Joads. Farmers remain reluctant to make profit on their land, and put all their finances into it. Steinbeck describes the farmers to put â€Å"blood, sweat, and tears into the land.† (31). Farmers were in debt to the corn, in order to be able to live on the farm. In an effort to save the farms, landowners begin planting cotton instead of corn, even though cotton is water hungry, and will drain what water is left in the soil, As Jennier Vanburen stats from her article in Demand Media. Only one of the crops are able to grow amidst the dust, that it cotton. Steinbeck presents that all the farmers have the knowledge that cotton would swallow their farm land dry. With the nature’s unstable wind,dust tearing the fertile land, and unstable funds. The monster is the symbolization to describe the affects of the Great Depression and Dust Bowl on the people of Oklahoma. Another way Steinbeck symbolizes the monster through the Great Depression and Dust bowl are the greedy bankers. With the country in recession, due to the Great Depression, the banks try to sustain profability by making prices