EFU - Profile and Performance

April 2021

EFU General Insurance Company Ltd is Pakistan’s largest and oldest general insurer with over 85 years of experience. EFU provides a wide range of insurance services to fulfill all needs of industrial, commercial and individual clients. These include Fire, Engineering, Marine, Aviation, Motor, Agriculture and miscellaneous insurance products. In addition, EFU offers Takaful products under its Window Takaful Operations. The company operates through its branch network in important commercial centres of Pakistan.

In 2017, EFU General Insurance Company Ltd. was the first company to create history by writing insurance business including Takaful contribution of Rs.20 billion and in 2020, EFU wrote a business of Rs.22.6 billion. EFU’s profit after tax for 2020 was Rs 2.4 billion with EPS of Rs.11.85. The company’s investment and properties stood at Rs 27.3 billion.

EFU has a track record of strong operating performance, with a five-year weighted average return on equity of 12% (2016-20), supported by positive underwriting and investment results. The company has generated robust technical profits, with an average combined ratio of 85% for five years. This indicates EFU’s underwriting discipline.

EFU maintains a leading position with a market share of gross written premium of 23%. The company has a diversified underwriting portfolio across non-life business segments.

EFU is rated by national and international rating agencies. i.e., VIS, PACRA of Pakistan and A. M. Best of USA. VIS and PACRA have assigned a rating of AA+ with stable outlook while A. M. Best has assigned a rating of B+ with stable outlook. It is also an ISO 9001:2015-certified company.

EFU has the privilege of insuring the first Wind Farm in Pakistan and is a pioneer in insuring wind power plants in the country. The company also provides insurance cover to Chinese interests in Pakistan and is also insuring infrastructure construction risks to various CPEC projects.

Awards and Other Achievements

EFU has been conferred the PSX Top 25 companies awards 2019 by Pakistan Stock Exchange. The Top 25 Companies Award is a tradition at Pakistan Stock Exchange which goes back to 1978. Historically, the best performing listed companies in Pakistan are awarded this distinction. The award testifies that EFU has out-performed others in the spheres of corporate governance and financial performance, and has added to shareholder value, based on specific quantitative criteria, amongst other factors, thus making it to the Top 25 Companies List. The award takes into account the excellent performance metrics of EFU and recognizes the able guidance of its Board and qualified and competent management.

In addition, EFU has been securing the FPCCI award for the last eight consecutive years. This prestigious award recognizes EFU’s exemplary performance across the industry. This has enabled the company to contribute positively to the socio-economic development of the country.

Among other awards, EFU has won numerous CSR awards, Fire and Safety awards and Environment Excellence awards. It has beenrecognized all over Pakistan for its great commitment to public health and safety, energy conservation and contribution towards protecting the overall environment for greater sustainability, endorsing excellent HSE practices and performance in the field of fire safety and security.

Business Environment in the Short and Long term

The general insurance sector’s performance is strongly correlated to economic growth. The key drivers of insurance growth in a country are typically macroeconomic factors, regulatory factors and demographics. In Pakistan, insurance penetration has remained modest as compared to neighbouring countries. There is vast room for the insurance industry to penetrate in the region in future.

The Government has taken various steps to boost the economy by providing financing at concessional rates to low income groups and controlling the interest and exchange rate. Its investments in the real estate sector will provide impetus to construction-related industries i.e. cement, steel, tiles, glass and paints business.

Some new car manufacturing companies have also been established which would help in generating some additional insurance premium.

Demand for new insurance products for extreme weather events induced by climate change will grow. The physical impact of these natural disasters on value chains and trade relations present an opportunity for insurance to generate more revenue. However, with the change in climate patterns, the quantum of insured losses are likely to show an upward trend.

EFU’s Future Strategy is to continue to deliver sustainable and profitable growth in a challenging business environment and to maintain a leading position in Pakistan.

The key performance indicators devised for achieving the management objectives will be as before - maximization of customer satisfaction, improvement in operational underwriting results and increasing the shareholder’s wealth.