Marketing Report [Body]

8/9/2019 Marketing Report [Body]

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BACKGROUND

In the early 30s of the 20th century, under the inspiration of the Quaid-e-Azam

Mohammad Ali Jinnah, there began to appear signs of economic renaissance of the Muslims

India. Shipping, Airline, Banking and Insurance companies made their debut.

In 1932, Mr. Ghulam Mohammad, a far sighted man, established Eastern Federal Uni

Insurance Company (EFU) with financial assistance from the Aga Khan III and the Nawab of

Bhopal. Mr. Abdur Rehman Siddiqui became the founder chairman. The company was origina

registered at Calcutta and operated in India (undivided) and Burma.

In 1947, on the birth of Pakistan, EFU found a new home in a new country. In Pakista

EFU rapidly established itself as a progressive and innovative insurer. It gave the emerging

insurance industry the leadership, the manpower and the drive needed to grow in a situation

where at one time, three-fourths of insurance was held by foreign companies.

By 1961, EFU had become the flag bearer of Pakistan's insurance industry on the wor

stage, and the largest life company in Afro-Asian countries (excluding Japan) under the

leadership of Mr. Roshen Ali Bhimjee. It remained so until 1972 when Life Assurance busines

Pakistan was nationalized. Thereafter EFU operated solely as a General Insurance Company,

and was subsequently renamed EFU General Insurance Limited. Now EFU General is the seco

largest non-life insurance company in the country and the mother company of other insuran

organizations of EFU Insurance Group.

In June 1990 the Government of Pakistan decided to allow Life Assurance business in

private sector also. On 18 November 1992, EFU Life was granted a license to carry on life

assurance business. It started operations immediately with Group Life products and in March

1994 launched its Individual Life products. EFU entered the field of life assurance with the fo

on the changing needs of the population. The company is committed to provide its policyhold

with solutions to the problems of today's complex and rapidly changing financial environmen

by introducing innovative, and modern products.

In March 2000, Allianz Aktiengesellschaft (Allianz AG), a global leader in the insuranc

industry with an active presence in 70 markets across 5 continents and EFU Group signed a

joint venture to form a new company for providing health insurance cover to the people of

Pakistan. Allianz EFU Health Insurance Limited, approved by the Government of Pakistan, is

first specialized health insurance provider in the country and aims to play a pivotal role indeveloping the health insurance market in Pakistan.

Traditionally the EFU name has become synonymous with progressiveness and promp

claim settlement and now the EFU being the largest insurance group provides a full range of

general, life and health insurance services.

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EFU TODAY

EFU Group is one of the few Pakistani organizations run totally by professiona

management. Another unique feature of EFU is a voluntary review mechanism by profession

of international repute. EFU has taken Mr. Wolfram W. Karnowski, who retired at a very seni

level from Munich Re, on its Board of Directors. It has appointed Mr. Michael J de H. Bell, a v

eminent UK based actuary (retired from Wyatt Watsons and chairman of a UK based life

company). EFU has the services of Mr. S.C. (Hamid) Subjally, who retired from a very senior

position from Assicurazioni Generali, Dubai, UAE. The independent reviews by these

professionals enable the group companies to keep abreast of international changes in the

industry as well as ensure that management adopts the best international practices.

Another pillar of EFU's strength is a very close and long term (over 50 years) relationship wi

its main reinsurer, Munich Re, the largest reinsurance company in the world and the strong

support of Allianz Aktiengesellschaft (Allianz AG), a global leader in the insurance industry.

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INTRODUCTION

The product, rather a service offered by EFU is insurance policy. There are three service (or

product) lines within which an assortment of several policies is offered. The company offers

wide range of policies so that each and every consumer gets what he desires.

Product Line:

The first product line is EFU General Insurance policy. Its product assortment is as

follows:

o Aviation

o Bond

o Engineering

o Fire

o Motor

o Marine Cargo

The next line is EFU Life Insurance policy which has only one type i.e. l

insurance policy as the name suggests.

The third and the last line is Allianz EFU Health Insurance policy which

the following assortment:

o

Personal Accidento Health Insurance

o Utility

The customers of EFU perceive the insurance policies as a Protection against the hazards

occurring in the daily life.

Brand

The brand name is EFU and the brand mark is:

_INCLUDEPICTURE "logo.gif" \* MERGEFORMATINET ___

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EFU MOTOR INSURANCE

Our main focus is on the EFU motor Insurance Company. That how they prom

their motor vehicle insurance services, competing with many other national and internationa

level of insurance companies, in the market.

Target Market

The target market for EFU comprises of all kinds of consumers, whether business or n

business users, who have the need to feel and be secure. To determine its target ma

EFU uses four Ps (Product, Price, Place, Promotion) which helps the organization to

determine where the insurance policy should be launched, advertised and at what pri

Within its target market EFU has several market segments each one having a

differentiated need.

Target Market Strategies

Aggregation strategy is adopted for the consumers of insurance policies.

Consumers in high income brackets go in for insurance policies with greater advantag

at little extra cost, but basically the company has one marketing mix to treat its

customers. With some product differentiation the company can treat its separate

segments using the same marketing mix.

Segmentation

Separate segments are created for consumers of life insurance and health insurancepolicies. Company defines income ranges within which the consumers are segmented

according to their buying power. Using some demographic factors such as income and

social class and psychographic factors such as life style, EFU clearly identifies its

customers.

Positioning

The positioning of services (in this case insurance) is a difficult job for any

organization, even for EFU where a huge emphasis is placed on client satisfaction. To

position themselves against the competitors EFU provides best services to their client

At EFU clients affairs receive immediate and responsive attention. Providing expert

advice on the interpretation and consequences of contractual obligations, together wi

the efficient handling and prompt settlement of claims is a way through which EFU

position their services. Developing innovative solutions to meet the requirements of it

clients is another tactic used by EFU to position its policies.

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EFU Auto Insurance 5 Cs Analysis

Diagram 1 5 Cs Analysis

1) Customers:

Major Customers of the EFU motor insurance are both business and non business use

They have many companies who are their customers and had insured their vehicles with EFUNon-Business users include those users which are more safety conscious. And people who bu

expensive vehicles tend to insured them. Some of their customers are those who had

experience of car theft or car accident. They are more conscious to insured their vehicles. So

that they can secure the risk they had faced in the past.

2) Competitors:

EFU motor Insurance has 28 competitors in the market. The major competitor is the

Adamjee Insurance Company Limited. There is a minor difference between the market share

both insurance companies, which shows that there is tough competition between these

companies. Second largest competitor in market is New jubilee insurance company limited it

also a very old insurance company however its market share is 7.94 only 27% of the market

share of EFU. This shows that it is not a very big competitor. All other competitors are very

minor and market share of each of them is below 5.

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5 Cs Analysis

of EFU MOTOR

Customers

CompetitorsCollaborator

sContextCompany

General

Health

Life

MotorInsurance

BusinessUsers

Non-

BusinessUsers

Brokers

Agents

Munich Re

Allianz AG

InsuranceCompany

Adamjee

Others

New Jubilee

Cultural

legal

Technological


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More importantly EFU is the market leader

Diagram 2 : Competitors Market Share Comparison

3) Collaborators:

Collaborators are those companies/groups/individuals, that helps or support

the company in enhancing its business more efficiently and effectively. Like other companies

EFU Insurance also have collaborators.EFU Insurance is being collaborated by the world larg

reinsurance company, Munich Re providing technical support. Allianz Insurance Company, f

India is another collaborator providing its services to EFU Insurance Limited.

More over brokers and agents are also includes in its collaborators. Brokers are gener

collaborators, i.e. they provide their services to the other Insurance Companies as well. On t

other hand the agents are exclusively EFU collaborators.

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4) Company:

EFU Insurance Company is the most established company and pioneer of th

Insurance in Pakistan. Established in 1932. and providing its services in wide range of insura

policies. Including Life, health and General insurance. Motor insurance comes under general

insurance. Which is a main focus of our report. EFU has an ability to provide quality Insuranc

services, to its customers. It is the most financially strong Insurance Company. After passing

the law for minimum capital requirement of 15 Million for health insurance and 11 million for

other Insurance services by the government of Pakistan. Because of this many companies ha

withdrawn from providing wide range of insurance services and limit their range of insurance

services. But as EFU has can support such amount of liabilities, so EFU covers a wide variety

insurance services.

5) Context:

EFU motor insurance is covering all Pakistan but it major emphasis is on the two of th

most business oriented and populated cities of Pakistan. Lahore and Karachi. As most of the

offices are located in these two cities. Pakistan as developing country, and these days there

an increment in the technology and one of the most major technology that EFU motor insura

has to face is the car tracking devices. As a time is passing the number of car tracking

companies are also establishing.

As Pakistan is an Islamic state, so EFU insurance also has to face the Islamic issues

against the concept of insurance. Majority of the people here are very non risk averse. And a

not very aware of the policies insurance companies are offering. Due to the lack of

communication through advertisements.

In Pakistan the banks lease cars to the customers (Lassie)* , and it is compulsory to insured

the vehicle which is leased. This helps in legal binding with the customers.

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Marketing Mix

4 Ps Analysis EFU auto Insurance

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Product Place Promotion

InsuranceService

ComprehensiveInsurance

Third party Motorvehicle Insurance

Act only LiabilityInsurance

Internet

Agents

Brokers

Location

InsuranceAssociation ofPakistan [IAP]

Fixed Price

Price Fluctuationsdue to

competition

Advertisements

Personal Selling

Sponsor Ship

Direct Mail

Websiteadvertisement

Pull Strategy

IntegratingMarketingStrategy

DistributionChannels

PromotionMeans/Strat

egy

4 Ps Analysis

EFU AUTO INSURANCE

Pricing

Diagram 3 : 4 Ps Analysis


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The Four Ps are the parameters that a marketing manager can control, subjec

the internal and external constraints of the marketing environment. The goal is to make

decisions that center the four Ps on the customers in the target market in order to create

perceived value and generate a positive response.

Below is the diagram of the 4 Ps analysis Diagram. Figure-B

Figure B_2

4 Ps Analysis Diagram

1) PRODUCT:

The term Product refers to tangible physical products as well as services. EFU auto

Insurance is a service providing company; it provides auto insurance services to their

customers. EFU ensures that the services provided are according to the standards of Insuran

Association of Pakistan.

o Product Categorization:

EFU has categorization in their services, according to the needs of the customers.

Customers vary with their problems related to Insurance. The company offers a wide ran

of policies so that each and every customer gets what he desires. To achieve the

satisfaction, customers can choose any one of the following kind of Auto insurance.

Private and Commercial Vehicle Comprehensive Insurance

Private and Commercial Vehicle Third Party Motor Vehicle Insurance

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Private and Commercial Vehicle Act only Liability Insurance

Family Accidental Benefit Cover

Accidental Death Cover for Salaried Driver

Protection of Loan Amount for Financial Institutions

Personal Accident Benefit Cover for Passengers

20% Discount in Premium on Installation of Tracker Device

2) PLACE:

EFU auto insurance can provide its services, from the following distribution channels,

assuring that the services are in the access of every customer.

o Distribution Channels:

EFU auto Insurance has the following distribution channels, from which their

customers can easily access to the insurance services they are providing.

o Location:

EFU has the vast network of 64 branches in Pakistan. EFU had established th

offices according to the demand of customers from every city. Karachi and Lahore are the tw

largest cities of business in Pakistan. EFU has 23 branches in Karachi including the main Hea

office and 14 branches in Lahore. Mostly EFU covers the Punjab, because of the high demand

insurance policies from Punjab. Distribution of the EFU offices in Pakistan is presented by the

figure B-3 below:

Figure B_03 Distribution of EFU offices in Pakistan [Appendix]

o Internet:

Internet is the widely using resource of information now days. And EFU uses t

mean as well, to reach their customers. EFU is the only auto insurance provider, givin

facility of submitting the policy online. This makes very easy for the customers having

less time to spent, to buy a policy.

The link is given below to submit the online policy to EFU.

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LINK : http://efuinsurance.com/motorform.html

o Agents (personal selling):

EFU mostly depends on the personal selling. A person representing the EFU go

to the people who are facing problems, firms and large organizations to motivate the

to buy the Insurance policy from EFU. By describing the benefits of the insurance,

introducing them to the prices according to their policy, and the nature of the risk the

are facing. Agents make good relations, uses references to capture the customers.

Agents are very much effective in the EFU insurance selling.

o Brokers:

The concept of broker is not so common in Pakistan. But it is expected to be

popular in the few coming years. An independent agent who represents the buyer,

rather than the insurance company, and tries to find the buyer the best policy by

comparison shopping. Brokers prefer those companies, from where they can expect

more commission. Brokers are the complete guide for the customers to ensure their

vehicle, with the best auto insurance company available in the market.

3) Promotion:

If the insurance policy is new, the promotional effort at EFU relies heavily on

advertising to make potential buyers aware of the insurance policy, inform these buyers abo

the benefits associated with the insurance policy,convice buyers that the policy possesses hi

value and finally entice the buyer to purchase the policy.

o Promotion strategy

EFU uses pull strategy relying mainly on product advertising or consumer sales

promotion. these activities are aimed motivating the consumers to pull the product

through the channel.

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http://efuinsurance.com/motorform.htmlhttp://www.investorwords.com/2510/insurance.htmlhttp://www.investorwords.com/2517/policy.htmlhttp://efuinsurance.com/motorform.htmlhttp://www.investorwords.com/2510/insurance.htmlhttp://www.investorwords.com/2517/policy.html


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o Integrated Marketing Communication

The company carefully integrates and coordinates its many communication

channels to deliver a clear consistent and compelling message about the organization

and its products.

o Advertisements:

Advertisements are placed to aware people about the services and benefits of

service through different mediums. Now a days Televisions and Bill board are

mediums being used by EFU for advertisement purpose.

o Personal Sellings:

Personal selling is required if the policy is highly technical and needs a lot of

explanation. Interaction of agents and brokers to the customers, also give awareness

the customers about the EFU auto insurance services. By asking their problems and

giving them the solution in the form of one of the service of EFU insurance.

o Sponsorship:

EFU also promotes its brand name by giving sponsorships on different events

it recently give a sponsorship of RS. 15 lac to the Halley College of Commerce

the new course of Insurance services.

4) Pricing

EFU is status Quo oriented i.e. their pricing objective is to stabilize prices and

meet the competition. The company tends to follow the competitors when sett

their prices in order to remain competitive.

o Factors influencing price determination

Factors that affect the pricing decisions include the nature of the market and

demand , and competition.

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o Estimated demand

EFU Insurance first understand the relationship between price and demand fo

its product before setting prices. pricing decisions at EFU are buyer oriented. The company

understand how much value consumer place on the benefits that they receive from the prod

and setting a price that fits that value.

o Price elasticity of demand

The company measure their demand curves by estimating demand at differen

prices. If the demand is elastic the company lower their prices. if the demand

inelastic , a higher premium would increase the profit.

o Competitive reactions

EFUs pricing strategies affect the nature of competition it faces. In setting orchanging prices. the company consider its competition and how the competitio

will react to the price of product. Initially considerations are given to such fact

Number of competitors

Size of competitors

Cost structure of competitors

Number of insurance policy sold by competitors

Historical reaction of competitors to price changes

The company learns about the price and quality of each competitors offer

uses this information as a starting point for its own pricing. it benchmark it

cost against its competitors costs to learn whether the company is operatin

at a cost advantage or disadvantage.

o Price Competition

EFU uses price competition to remain competitive. They decrease their premium rates

increase their sales. Offering low priced policies such as fire and motor insurances wit

minimum of services is an example of price competition done by EFU.

o Discounts And Allowances

o EFU provides its established customers with cash discounts for insuranc

covered up to more than a year.

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SWOT ANALYSIS

A step involved in analyzing the companys position with respect to the competitors

position, involves SWOT analysis. It analyzes the external factors like environment, location,

availability of recourses and the internal factors of the company. Like companys ability to

achieve the goal; the company is established for. The ability to solve the problems in achiev

that goal. Proper utilization of resources, to use the potentials of the company. That result in

the identification of strengths, weaknesses, opportunities and threats through what is terme

SWOT Analysis. This is a complex analysis which involves matching external possibilities with

internal capabilities of a company.

Figure B-2 SWOT analysis EFU MOTOR

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STRENGTHS

Pioneer of GeneralInsurance 1932

Wide variety of Insurance

Policies

Specifically InsuranceIndustry

Easy access of customers

Leasing contracts with

Banks (customer Binding)

Technical Support

agreement with the largestreinsurance company in the

world German InsuranceCompany Manic-re

WEAKNESSES

Pakistan people are notmore policy conscious

Awareness about insurance

benefits is less

Losses due to heavy claims

OPPORTUNITIES

Customer Trust

Increase in growth

More bank contracts

Information and research Market Development

Development in Informationand education sector.

THREATS

Motor Insurance competitors

Foreign Insurance

companies

Undercutting pricingstrategy of competitors

Car tracking products

Natural Disasters

Agreements with banks

Religious and Cultural

Resistance

Car snatching


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The opportunity today for the company may be the Strength of the company tomorrow

the company changes its strategy and work more efficiently to convert that opportunity in to

the strength of the company, similarly if company doesnt overcome to the weaknesses, then

they may be threat for the company in the future. And become a hurdle for the company in

achieving the goal.

Now we are going to use this SWOT Analysis for EFU Auto Insurance, to analyze the

companys strengths, weaknesses, opportunities and threats. A block diagram of the SWOT

analysis of EFU General Insurance is as follows.

STRENGTHS

Strengths of EFU Auto Insurance can determine the competition ability in the market,

with other Insurance Companies. The more the strength of the company, comparing to its

competitors the more superior it is on its competitors. After having a detailed research on th

EFU Auto Insurance and using the marketing strategies to analyze. The Following Strengths

determined.

1. Pioneer of General Insurance :

EFU GENERAL INSURANCE LIMITED is Pakistan's pioneer general insurer with the

industry's highest premium growth in 2003 of Rs. 86 crores.

EFU established in 1932, under the inspiration of the Quaid-e-Azam Mohammad Ali

Jinnah. The company was originally registered at Calcutta and operated in India (undivided)

Burma. In 1947, on birth of Pakistan EFU found a new home to develop. In Pakistan, EFU

rapidly established itself as a progressive and innovative insurer. It gave the emerging

insurance industry the leadership, the manpower and the drive needed to grow in a situation

where at one time, three-fourths of insurance was held by foreign companies.

Traditionally the EFU name has become synonymous with progressiveness and prompts claim

settlement and now the EFU being the largest insurance group provides a full range of gener

life and health insurance services.

Eastern Federal Union Insurance Company has an advantage of being the pioneer of

Insurance Industry in Pakistan. Because of the experience and market share they had gained

made them the leader in General Insurance in Pakistan. More over it is the nature of the

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customer that preference is for the older and stable company. And as EFU has been providin

its services since 1947, people are more intend towards EFU.

2. Wide variety of Insurance Policies:

EFU has a wide variety of Insurance policies. Main categories are:

Life

Health

General Insurance.

Customers Business or non-business when have to buy more than a single type of

insurance policies, then they seek for the company which can fulfill there needs under one ro

EFU provides wide range of Insurance services.

3. Specifically Insurance Industry:

Comparing to EFU competitors, Easter Federal Union Insurance is specifically the

Insurance Industry. Its focus is totally on the development of Insurance sector. All the

investment of this company is for the betterment and progress of insurance company. Havin

focus on the Insurance, EFU has gain more professionalism in providing Insurance services t

its customers.

Major competitor of EFU is Adamjee Insurance Limited. This is not specifically for

Insurance. It is the group of industries, and one of their industries is the Insurance service

providers.

4. Easy access for customers:

Customers can have the access to EFU very easily. One can contact to the EFU throug

one of the 64 branches spread all over the Pakistan. From which 23 along with the Head offi

in Karachi, the largest city of business in Pakistan. And 14 branches are in the Lahore the

second largest city of Business. Rest all are distributed in the country according to the dema

of the customers. And it is still growing.

Customers can also have an access through Internet. The widely used media, in the

customers of EFU. No other insurance company is providing the facility to submit policy onlin

This easy and fast way of submitting Insurance Policies saves the time for the customer and

the EFU to process the policy.

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Another easy and efficient way to access to the EFU is the agents in the market. EFU

agents step by step guides the customers for deciding for the right policy which fulfills the

needs of the customer more efficiently.

5. Leasing contracts with Banks (customer Binding):

In Pakistan auto leasing is growing day by day. Banks have an agreement with the la

that the auto should be insured. Banks have different contracts with Insurance companies. E

also have contracts with Banks. Those banks which have agreements with EFU, makes it

compulsory for the lassie to insured their vehicle from EFU Auto insurance.

6. Technical Support from the largest reinsurance company in the world:

Another pillar of EFU's strength is a very close and long term (over 50 years)

relationship with its main reinsurer, Munich Re, the largest reinsurance company in the wor

and the strong support of Allianz Aktiengesellschaft (Allianz AG), a global leader in the

insurance industry. By this support EFU provides its insurance services on the international

standards, with complete satisfaction of customers needs.

WEAKNESSES

Another important aspect of the SWOT analysis is the weaknesses of the company. N

company is perfect. Some weaknesses are there, and to overcome those company move

towards progress and development. EFU also have some weaknesses which can put hurdles

achieving the goal. After analyzing these are the following weaknesses determined.

1. People of Pakistan are not more policy conscious:

People of Pakistan are not so much policy conscious. Pakistan is an underdeveloped

country. People are intending to invest, from where they can have a proper income source

rather than to secure the income source.

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In auto insurance industry people are not so much insurance conscious. Comparing a

insurance with other insurance policies. People are more likely to intend towards health and

insurance services. Neglecting the risk factor involved in having a vehicle.

2. Awareness about Auto insurance benefits is very less:

People in Pakistan are not very much risk conscious. Literacy factor is also involved fo

less awareness of Insurance benefits between the people of Pakistan. The insurance is the lo

term planning and is very helpful, that a person further plans risk free.

Proper know how about the insurance policy and less advertisement through the

channels easily access to the people is very poor. This is the reason that the awareness of th

benefits of auto insurance are very less in Pakistan.

3. Losses due to heavy claims:

Insurance is basically a pool strategy. All people invest some amount of money and o

when one suffers then that person will be paid the amount promised/agreed by the insuranc

company. And that amount is collected from other investors.

But when there are many claims that the people giving amount are less and the peop

claiming are more than the company suffers loss. This is the one big uncertainty.

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OPPORTUNITIES

1. Customer Trust:

Customer trust is the one of the foremost priority of the EFU. Customer trust

means customer will prefer EFU then other insurance companies. That will increase the s

and will helps in achieving the goal.

EFU Auto insurance is struggling to have the customer trust by providing the

excellence in service, the quality of the service, and by reducing time of processing the

policy.

Snr. Vice President of EFU Insurance quoted in regard of achieving the custom

trust ;

Once the customer is satisfied with our service to fulfilling the need or the problem

he/she was facing and for that purpose we were contacted by him/her. Then we had the

trust of the customer

2. Increase in Growth:

Increase in growth is the major aim of any company, as well as EFUs. Increas

in growth by having more market share , by having more sales and by increasing the qua

and in line services will result in the increase in the overall growth of the EFU auto

insurance.

Moreover the increase in the sales point units or Volume is also the factor of

growth increment. And EFU is planning for it. Increase in growth needs a long term strat

planning. The broader view of the market and demand. The capability to utilize the recou

more efficiently then to the competitors.

3. More Bank Contracts:

The bank agreements on the insurance company specification on the auto leas

are the one of the major opportunity for EFU to increase its sales. The more the auto lea

banks agree to have contracts with EFU. The more will be the sales of EFU auto insuranc

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To achieve this opportunity EFU is making its repute in the market best by

providing quality service to its customers.

4. Development in Information and Education:

Development in Information and Education about the Insurance will affect dire

to the EFU auto insurance. The more the qualified and with more knowledge the employe

will. The more will be the profit.

Recently Halley college of Commerce Lahore, started the MBA related to

Insurance services. And EFU Insurance provided Rs. 15 lac. For the development of this

discipline.

THREATES

1. Motor Insurance Competitors:

The major threat to EFU motor insurance, are its competitors. The more the

competitors the lesser the market share, the lesser the sales. And that effects the overal

growth of the company. The competitors always try to lower the sales of their competitor

And for this they keep on changing the strategies, struggle to attract the customers,

improving the quality of service, and many other similar strategies which can increase th

sale of the company or can reduce the sale of their competitor.

2. Foreign Insurance Companies:

Foreign Insurance Companies are investing here in Pakistan. And Government

Pakistan is also supporting them, and planning for more foreign investment. And many

other Insurance companies will also invest. And start providing their services here in

Pakistan, with new technologies, more improved methods and more investment. This

increases the competitors to EFU auto insurance. And increase the number of competitor

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3. Undercutting pricing strategy of competitors:

The price cutting strategy of the competitors of EFU auto insurance produces

many hurdles. When competitors lower their prices of premiums, then the customers inte

towards them. More over the people which are already the customer of the EFU also

attracted to other companies. And that lower the sales. This is the very tactical threat.

Sometimes it may effects a lot. When the same quality of service is being provided by

another company but on the lower price. So there always be a threat for EFU auto

Insurance.

4. Car tracking products:

The difference between the Car tracking products and Auto insurance is that t

when a vehicle is theft or lost. Then a person having a car tracking system can have the

back easily by tracking it. But incase of auto insurance the person cannot have its car ba

but the equal amount of money which he insured his car for.

As car tracking products/services are cheap. That is the reason many people a

firms prefer them to keep in track with their vehicle. More over the Tracking services giv

the owner many other details of the vehicle. Like speed. The total journey and route of t

vehicle and other same information. This is also one of the factors that customers buy th

tracking devices.

5. Natural Disasters:

Natural Disasters are one of the big threat for the EFU auto insurance. In

Pakistan floods, earth quakes and many other natural disturbances occurs periodically.

When this happens the heavy amount of claims occurs which cannot be easily settled. An

thus sometimes gives a heavy loss.

Recently last year, 8th October earth quake, many vehicles damaged, and lost

Many claims occurred. Same was happened in the Sialkot flood. Many cars were insured

were damaged. Many claims occurred.

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6. Competitors agreements with banks:

Bank agreements on the auto leasing are very important for EFU auto insuran

If EFU fails to have the agreement with the bank, then it will be given to its competitors.

And that is the loss for EFU auto insurance. So to avoid this EFU tries at its level best to

have the agreements with the banks by providing the quality service and maximum bene

to banks as well.

7. Religious and Cultural Resistances:

Pakistan is an Islamic country and the culture here is based on Islamic princip

One the controversy in the Insurance company services and the Religion is that the Islam

doesnt allow the Insurance. And people resist for insurance, and avoid the advertising ofInsurance. This leads in lack of knowledge and benefit about the EFU auto insurance.

8. Car snatching:

Car snatching is one of the major threat for the EFU auto insurance. Car

snatching rate is too much in Lahore and Karachi where 22% and 39% of the offices are

located respectively. The demand of insurance is more there where the risk of auto theft

more. Lower the claims more the profit. So if the crime rate increases, the auto theft wil

increase. And more the claims. Giving a heavy loss to the company.

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Sustaining value

EFU motor Insurance, offers its insurance services for motor vehicles. Motor vehicle

Insurance was not so much common in the late 1960s. Now a days growing industry of the

motor vehicles, and bank leasing vehicles, also had an affect on EFU motor insurance. EFU

motor insurance has to compete with its three major competitors and twenty five minor

competitors.

Strategies to sustain value:

EFU motor insurance, struggled a lot to achieve the satisfaction of the need of the

customers. By providing quality services. By competing in the premium prices. And by reduc

the uncertainty of the claims. And providing the excellence in the service/process of policy.More over the motor insurance services are also enhanced by giving incentives to the clients

now a days it is included, that if the customer installs the security [Car tracking Device:

purpose to track cars and prevent thefts] the customer will be then given a discount of 20%

the premium.

As EFU is the first and pioneer of general Insurance the Law passed defining the crite

for the establishment of a general Insurance company. Helped EFU motor insurance to gain

lot of trust and to believe in the reliability of the company.

Many registered Business rating companies also rated EFU as a stable company.

From *Business Recorder Lahore [Friday 28 April, 2006] page # 35, 3rd column last para,

The directors informed that ICR-VIS, its rating agency, has improved its financial

strength Rating to AA and outlook to be stable

Zohra Ibrahim evidence the growth due to this sustaining in value of the EFU motor

insurance, in *Business Recorder Lahore [Friday 28 April, 2006] page # 35, that

The year under review saw highest annual growth in the company's Written Premium

the insurance history in Pakistan. Net Premium Revenue increased by 52.3 percent to Rs

3.862 billion (2004: Rs 2.536 billion). The overall claim ratio (ie claims as a percentage of n

premium revenue) was 70 percent as against 60 percent in the previous year.

The directors emphasized that EFU General Insurance Ltd has established itself as th

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market leader in insurance of leased motor cars. Motor insurance now represents over 50

percent of the company's total Written Premium.

Highest annual growth rate was recorded by Business recorder *. That

With a Written Premium of Rs. 6.64 billion. It grew by Rs. 1.6 billion (i.e. 32%)

over the previous year and is the highest annual growth recorded by any company in the

insurance industry in the country.

Reference: www.businessrecorder.com [search for *]

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RECOMMENDATIONS

After analyzing the data gathered of EFU motor insurance. We interpret for the

following recommendations for the EFU motor insurance, to overcome their weaknesses and

avoid the threats.

1. Advertisement :

EFU motor insurance should increase their advertisement, quantity and

quality, so that the majority of the people who are unaware of Insurance policies and

companies should attract. Quality of the advertisement should be excellent and life

touching. Means that the advertisements should presents that EFU motor has an ability

capacity to solve the problems of people who want to secure their vehicles by reducing r

by investing less.

2. Incentives:

EFU motor should release some of the incentives for marketing their

product. Like they can offer their customers that if they refer 4 or 5 more customers the

they will be awarded with a gold coin or they will be installed with the car tracking devic

That will motivate the people who are already the customer. And also to those people w

are being deciding for either to insure the vehicle or to install a car tracking device. And

cost of this tracking device can also be cover in the premium.

3. Start providing Tracking device facility:

If motor insurance also starts installing car tracking device facility, then

that will help the company to reduce the number of claims. And ultimately generates the

profits. As this is also the demand of the todays position. As crime and car theft is

increasing day by day.

4. Awareness of Insurance and its benefits:

Arrange TV shows and aware people of Pakistan about the benefits and

uses of insurance policies. And how they can affect in ones life. Plus how they can be

helpful in increasing of efficiency in business as well as in daily life.

5. Internet advertisement should be use:

EFU motor insurance should use internet advertisement. On many onlin

vehicle information sites and other car search engines. Like www.Pakwheels.com, Efu ca

sponsor them as well, that can also market the brand name of EFU motor company.

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EFU AUTO INSURACNE COMPANY

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PAKISTAN MAP EFU OFFICE DISTRIBIUTION

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29

Investments and Bank BalanceTotal Adjusted Assets

Premiums and Claims Revenues and Funds

Graphs from EFU General Insurance Annual Report 2005


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BRAND LOGO

EFU GENERAL INSURANCE

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POLICY FORM EFU MOTOR INSURANCE

Authorized for report appendix : Liaqat Ali Khan

F.C.I.I

Senior Vice President

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REFRENCES

Business Recorder.

www.businessrecorder.com

Article : EFU General Insurance Ltd.

Writer : ZOHRA IBRAHIM

Date : Friday 28 April, 2006

Article : Motor Vehicles Snatching to Cell-Phones

Writer : M. A Chishti

Date : Friday 28 April, 2006

Financial Data.

EFU Main Office, Mall, Lahore

Financial Data for market Share of Motor Insurance Companies. Pakistan

Marketing Mix .

www.marketingteacher.com

Marketing Mix Diagram. [4 Ps]

Interview.

Liaqat Ali Khan

F.C.I.I

Senior Vice President

EFU General Insurance, Main Branch, Mall, Lahore

Imran Hassan

Sales Consultant

EFU General Insurance, Gulberg Branch. Lahore

Shokat Ali Bajwa

Unit Manager

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EFU General Insurance, Gulberg Branch, Lahore

Documents

Marketing Report [Body]