INTRODUCTION OF NJI: New Jubilee Life Insurance Company Limited (NJI Life) is a subsidiary of the Aga Khan Fund for Economic Development (AKFED), Switzerland. Incorporated in Pakistan on 29 June 1995, under the Companies Ordinance 1984, as Commercial Union Life Assurance Company (Pakistan) Limited, the Company commenced operations in 996 as a Public Limited Company , listed in the Karachi Stock Exchange. Commercial Union was then acquired by AKFED (Aga Khan Fund for Economic Development) in 2003, as New Jubilee Life Insurance Company Limited (NJI Life). NJI life is governed by an independent Board of Directors comprised of industry stalwarts. AKFED is the economic development arm of the Aga Khan Development Network (AKDN) – a group of private non-denominational development agencies seeking to improve opportunities and living conditions in specific regions of the developing world, especially Asia and Africa AKFED is active in the fields of Industry, Financial Services, Tourism Development and Infrastructure in South and Central Asia and sub-Saharan Africa. Business Line: Individual Life Insurance: At NJI Life, we are dedicated to assist you in making your financial dreams come true. You can count on our expertise, whenever you need to make informed financial decisions for your loved ones. Our insurance solutions are designed, keeping in mind your and your family’s ever changing protection and savings Zeeshan Khawar Page 1
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INTRODUCTION OF NJI:
New Jubilee Life Insurance Company Limited (NJI Life) is a subsidiary of the Aga Khan Fund
for Economic Development (AKFED), Switzerland.
Incorporated in Pakistan on 29 June 1995, under the Companies Ordinance 1984, as Commercial
Union Life Assurance Company (Pakistan) Limited, the Company commenced operations in 996
as a Public Limited Company , listed in the Karachi Stock Exchange. Commercial Union was
then acquired by AKFED (Aga Khan Fund for Economic Development) in 2003, as New Jubilee
Life Insurance Company Limited (NJI Life). NJI life is governed by an independent Board of
Directors comprised of industry stalwarts.
AKFED is the economic development arm of the Aga Khan Development Network (AKDN) – a
group of private non-denominational development agencies seeking to improve opportunities and
living conditions in specific regions of the developing world, especially Asia and Africa AKFED
is active in the fields of Industry, Financial Services, Tourism Development and Infrastructure in
South and Central Asia and sub-Saharan Africa.
Business Line:
Individual Life Insurance:
At NJI Life, we are dedicated to assist you in making your financial dreams come true. You can
count on our expertise, whenever you need to make informed financial decisions for your loved
ones. Our insurance solutions are designed, keeping in mind your and your family’s ever
changing protection and savings needs. From simple term insurance plans to highly sophisticated
unit linked savings products, NJI Life offers a variety of products and services to help protect
and grow your financial goals.
Life insurance plans provide the dual benefit of saving for your future financial requirements, as
well as providing financial security to your dependants against the unforeseen. The nature of life
insurance savings products is such that they are designed for the long term (10 years or more)
and provide best results only when they are continued for their full term. We offer our customers
a full range of transparent and flexible products providing high value for money. Our products
offer unique benefits like flexibility to choose protection levels, savings term, inflation
protection, partial withdrawals and unique investment options.
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Bancassurance:
It is a French term referring to the selling of insurance through a bank's established distribution
Channels. Bancassurance is the mechanism of bringing out the best in two domains under one
roof. The concept has reaped huge benefits for the banking as well as insurance sectors and at the
same time consumer is benefiting from the fruitful combination of these two service oriented
sectors. Bancassurance, not only enables Banks to become ‘Ideal One Stop Financial Shop’ but
also assist in competing efficiently with peer banks. NJI Life brings to the table not only their
expertise and reputation of a premiere provider of long term insurance linked investment
products but also a very professional and competent image. The sales approach that we follow is
disciplined and customer focused.
GroupInsurnace:
Group Insurance schemes play a pivotal role in the provision of social security and welfare
benefits. Companies prefer to offer this coverage in order to attract and retain employees. At NJI
Life measure our success through the success of our clientele. Our team takes the life and health
of your employees personally. By providing them with NJI Life’s customized Group Life and
Group Health Insurance coverage, you can significantly improve your employees’ packages
while keeping your salary costs manageable.
VISION:To be Pakistan’s leading and most highly reputed life insurance company, enjoying the
confidence and trust of its Shareholders, Policyholders, Business Partners and the Communities
in which it operates.
MISSION:
Shareholders are the backbone of our business. They provide the initial capital which enables
the Company to commence the business and to grow the business through retention of profits
and by investing additional capital when required. We will strive to achieve above average
earnings on their invested capital.
Our Policyholders are our most valuable assets. We will strive to provide them with a full range
of life insurance and other products, security of their investment, a satisfactory return on their
investments and efficient personal service.
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Employees are our partners enabling us to fulfill our vision and mission. We will endeavor to
provide them a fair reward based on their performance and achievements, a good working
environment, adequate training and opportunities for self development to empower them to grow
and prosper with the company.
The community in which we exist along with our Shareholders, Policyholders, Employees, etc
also deserves our consideration. We will participate and contribute to the uplift and welfare of
the community and the improvement of the environment.
External Factor Evaluation:An External Factor Evaluation Matrix allows strategies to summarize and evaluate economic, social, cultural, demographic, environmental, political, governmental, legal, technological and competitive information.In the given below EFE Matirx the key factors of Opportunities and Threats have been taken having weights that ranges from 0.0 the lowest to 1.0 maximum of all. The weight indicates the relative importance of the factor being successful in the firm’s industry. Whereas rating are assigned from 1 to 4 to each key external factor to indicate how effectively the firm’s current strategies respond to the factor. 4 shows the superior response, 3 shows above average, 2 shows average and 1 shows poor response.
(EFE) Matrix
Key Factors
Opportunities Weights Ratings Scores
Fast growing middle class income group in Pakistan 0.20 4 0.80
Changing perception of consumers in Pakistan towards Insurance
0.10 3 0.30
Large scale viable rural market 0.10 3 0.30
More Innovative products for bancassurance 0.10 2 0.20
Threats
Banks’ offering more structured financial products 0.05 2 0.10
Low customer confidence on the private players. 0.20 4 0.80
Multinationals are more efficient. 0.10 2 0.20
Tight monetary policy of S.B.P 0.15 3 0.45
TOTAL 1.00 3.15
The total weighted score of 3.15 is above the average of 2.5, so NJI is doing well, taking advantage of the external opportunities and avoiding the threats.
INTERNAL FACTOR EVALUATION:
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The Internal Factor Evaluation summarizes and evaluates the major strengths and weaknesses in the functional areas of a business and it also provides a basis for identifying and evaluating relationship among those areas.
In the given below IFE Matrix the key factors of strengths and weaknesses have been taken and weights are assigned to each factor ranging from 0.0 to 1.0 and sum of all must be 1.0. Ratings to each factor are assigned from 1 to 4 to indicate whether that factor represents a major weakness rating (1), minor weakness rating (2), minor strength (3), major strength (4).
(IFE) Matrix
Key Factors
Strengths Weights Ratings Scores
Strong capital and reserve base 0.20 4 0.80
Diversification of Funds 0.10 3 0.30
Innovative products to cater to different needs of different customers
0.05 3 0.15
Strong distribution channel of HBL. 0.15 4 0.60
Weakness
Poor retention percentage of tied up agents 0.15 2 0.30
Lack of skilled / trained sales persons 0.15 1 0.15
Less coverage in Rural Areas 0.10 2 0.20
Weaker Advertisement Policy 0.10 1 0.10
TOTAL 1.00 2.60
The total weighted score of 2.60 is above the average of 2.50 which indicates the good internal position of NJI.
COMPETITIVE PROFILE MATRIX:
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The competitive profile matrix identifies the firm’s major competitors and its particular strengths and weaknesses in relation to a NJI’s strategic positions. The critical success factors in a CPM include both internal and external issues; therefore the rating refers to strengths and weaknesses 4= major strength, 3= minor strength, 2= minor weakness and 1= major weakness.
In the above CPM NJI received 3.30 rating as compared to 2.60 for United Insurance and 2.40 for State Life Insurance. So NJI is better than both of United and State Life Insurance.
TOWS MATRIX
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Strengths Weaknesses
TOWS Matrix
1. Strong capital and reserve base
2. Diversification of Funds3. Innovative products to
cater to different needs of different customers
4. Strong distribution channel.
1. Poor retention percentage of tied up agents
2. Lack of skilled / trained sales persons
3. Less coverage in Rural Areas
4. Weak advertisement policy
Opportunities S-O Strategies W-O Strategies
1. Fast growing middle class income group in Pakistan
2. Changing perception of consumers in Pakistan towards Insurance
3. Large scale viable rural market.
4. More innovative products of bancassurance.
1. We can avail large scale viable rural market. (O3,S1,S4)
2. Capture middle class income group by innovative products.(O1,S1)
1. More coverage in rural areas. (O3,W3)
2. Advertising campaign through bancassurance. (O4,W4).
Threats S-T Strategies W-T Strategies
1. Banks’ offering more structured financial products
2. Low customer confidence on the private players.
3. Multinationals are more efficient.
4. Tight Monetary policy of S.B.P
1. Strong capital structure with diversification of funds to minimize threats of Bank’s offerings (S1, S2, T1)
1. Trained sales person will result in more efficient output (W2, T3)
Critical Region: Critical region lies in S-O.
Strategic Decision:
Using large network of HBL as a distribution channel and with strong reserves we can go for rural areas.
THE STRATEGIC POSITION AND ACTION EVALUATION:
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The SPACE Matrix is a stage 2 matching tool, its four quadrant framework indicates whether aggressive, conservative, defensive or competitive strategies are most important for the organization.
Market penetration Market development Product development Diversification
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2 1
(2.33, 1.59)
-6 -5 -4 -3 -2 -1
-1
-2
-3 -4 -5
-6
0 1 2 3 4 5 6
(SPACE) Matrix
THE INTERNAL – EXTERNAL (IE) MATRIX:
The IE Matrix positions an organization’s various divisions in a nine cell display. It involve plotting organization division in a schematic diagram, it is also called portfolio matrix.
The IFE Total Weighted ScoresThe IFE Total Weighted Scores
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Th
e E
FE
Tot
al W
eigh
ted
Sco
reStrong
3 - 4Average2.0 – 2.99
Weak1.0 – 1.99
High
3 – 4I II
Grow & Build
III
Medium
2.0 – 2.99
IV V VI
Low
1.0 – 1.99VII VIII IX
Adopt Grow & Build Strategy
o Market Penetration
o Product Development
o Market Development
o Backward, Farward or Horizontal Integration
GRAND STRATEGY MATRIX:
Grand strategy matrix is used for formulating alternative strategies, NJI stands in 1st quadrant of the Grand Strategy Matrix
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Rapid Market Growth
Quadrant II Quadrant I
1. Market Development
2. Market Penetration
3. Product Development
4. Integration Strategies
Quadrant III Quadrant IV
Slow Market Growth
THE QUANTATIVE STRTEGIC PLANNING MATRIX:
This is the only one analytical technique to determine the relative attractiveness of feasible alternative actions. It comprises stage 3 of the strategy formulation analytical framework. This technique objectively indicates which alternative strategies are best. In given below QSPM the attractiveness scores are 1= not attractive, 2=some attractive, 3= reasonably attractive,
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Wea
k C
ompe
titi
ve G
row
thS
trong Com
petitive Grow
th
(QSPM)
STRATEGIC ALTERNATIVES
Market Development
Product Development
KEY FACTORS WEIGHTS AS TAS AS TASSTRENGTHS Strong capital and reserve
base 0.20 4 0.80 3 0.80Diversification of Funds
0.104 0.40 3 0.30
Innovative products to cater
to different needs of
different customers0.05
3 .15 4 0.20 Strong distribution channel.
0.154 0.60 3 0.45
WEAKNESS
Poor retention percentage
of tied up agents 0.15 2 0.30 1 0.15 Lack of skilled / trained sales persons
0.10 4 0.40 3 0.30 Innovative products for Bancassurance 0.10 4 0.40 3 0.30THREATS Banks’ offering more
structured financial products
0.05 4 0.20 3 0.15 Low customer confidence
on the private players.0.20
3 0.60 4 0.80 Multinationals are more
efficient.
0.10 3 0.30 2 0.20 Tight monetary policy of SBP 0.15 - - - - Total 1.00 6.15 5.00
Favorable Strategy: Market Development
Suggestions/ Recommendation
After a comprehensive analysis of NJI it has been observed that the NJI is in good position to grow and build more repute.
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We suggest and recommend that NJI go for market development strategy and introduce itself in rural areas of Pakistan having a scope for the business because it has adequate financial strength and strong distribution channel of HBL and SCB in the shape of bancassurance.
