Thursday, June 4, 2015

Innovation in insurance

THE famous scientist Albert Einstein once said, “Try not to become a man of success, rather try to become a man of value”. Some people and corporates are lucky to be both. The not-so-strong business ethics of modern corporate houses still pervades local groups and companies known over the generations for sound business practices. The House of Habib is one among them.
Incorporated in 1942, the Habib Insurance Company Ltd has grown up to be a strong, profitable company. A significant feature that catches the eye is its board’s policy of maintaining a fair balance between the retention of earnings and distribution of dividends to shareholders.
A cursory glance at five-year figures shows a progressive increase in profitability, with the company reporting its highest profit-after-tax (PAT) of Rs244m for the year ending December 31, 2013.
For all these years, the company shared the bounties with shareholders, with cash dividends ranging from 25 to 35pc for shares of par value of Rs5. Even in the fateful year 2008, when corporates in Pakistan suffered the repercussions of the global economic crisis and the company went into red to the tune of Rs391m, its board did not deny investors a return and paid cash and stock dividends at the same rate of 12.5pc. The bonus payouts have been intermittent, with the recent high of 25pc paid for 2013.

Habib Insurance has extended the scope of the traditional fire, marine and motor insurance business in an innovative way to include allied perils such as riot and strike, malicious damage, explosion, earthquake and burglary in the fire segment