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EFU a national tradition.

EFU a National Tradition

Eastern Federal Union Insurance Company Ltd., is, apparently an insurance organisation. But more than this, it is a mission - ti is an institution - it is a tradition. It is a mission because the persons behind this company did not float it as a commercial ventue but their motive was to pioneer filling in a vital gap in the economic and financial growth of the Muslims of the Subcontinent. It is an institution because it nurtured the elements which provided the rapid growth of this industry, first among the Muslims of South Asia and then in the newly born state-Pakistan.

To understand this one has to go back a little in the past to analyse the factors which provided the motivation for launching this company.

Struggle for independence of the Subcontinent was based on Indian nationalism upto early twenties, but by middle twenties, Ghandian policies gave birth to Hindu nationalism and Nehru Report of 1928 alienated Muslims - almost completely from the body politic of India's struggle for independence or at least made their role secondary.

Muslim leadership at thi point poised to take stock of the things - and people started thinking on the lines of Muslim nationalism. It was not a new concept. It was always there. Muslims of India had put it in cold storage in the greater interest of struggle for independence. Ghandian politics however, pushed them back to this concept with a nasty jolt.

Muslims, once separated from the Indian nationalism found themselves far behind other communities in almost every walk of life including trade, industry and finance. There was not a single bank to insurance concern owned by Muslims and Muslims representation in these industries was hardly one per cent.

A couple of such people who thought on these lines joined hands to form the first insurance company owned, controlled and managed by Muslims. The idea was not profiteering but to build an institution, a cradle for training insurance men to shoulder responsibilities for creating an insurance field for Muslim youths to carry the message of insurance security to the door-step of every Muslim. We will, see how this goal was achieved but let us see something about the company itself first.

It came into being on 2nd September, 1932, with its H.O. at Calcutta. Many people made efforts to bring it into being but a few names such as Abdur Rehman Siddiqui, a Muslim leader of eminence, Mr. K.F. Hyder, Mr. M.A. Ispahani and the company's patrons - Nawab of Bhopal and HRH Aga Khan merit special place in the annals of the company whose missionary zeal and unbounded enthusiasm gave this company a unique position in the big Indian insurance market of thirties and forties-dominated by giant British and Hindu companies.

Company's first Balance Sheet, issued at the end of 1933, shows a sizeable profit endabling it to wipe out entire expenses of initial nature in its very first year. It was the result of admirable prudence in underwriting and skill to manage its portfolios professionally.

Company started as general company. In mid-Nov. 1935 life department was added. In 1942 it paid dividend which was 5 per cent of the subscribed capital. By 1946 it had, beside scores of chief agencies throughout India, 12 branches, three outside India and three in territory which later became part of Pakistan.

By Middle forties creation of an independent Muslim State - Pakistan looked inevitable. The Company braced itself to come upto the expectations of those who had formed it, nursed it, and had worked for it and had given their heart for it, for this day.

It was a big challenge, very big challenge indeed. But EFU did not fail them. By this time EFU had some expertise. It also had a fe trained hands. These raw materials were made available to the new country out of which the fibre of the Pakistan insurance market was to be woven in years to come.

H.O. of the Company wa shifted to Pakistan just after independent homeland for Muslims of India was announced and the company started to fill in the vacancies created by sudden departure of the Hindu Companies and Hindu manpower of the insurance industry. It was not an easy task but EFU came forward and provided necessary insurance support to the economy by insuring big risks of the industry and commerce. Moreover, its experience and expertise provided the building bricks on which the edifice of Pakistan Insurance industry was built. Its experienced and trained personnels pioneered new insurance companies and at one time most of the chief executives of the Pakistan insurance companies were ex-EFU men. One can recollect many big names, past and present of the industry such as Mr. Najmul Hasan of PIC, Mr. Naseem Ansari of Muslim, Mr. Mohammad Chaudhry of Adamjee, Mr Ishaque Khan of Muslim (now of Credit & Commerce Insurance, Dubai and Jeddah), Mr. Munir of Crescent Star, Mr. Chishti of Standard (now of Prime), Qazi Nisar Ahmad of NIC, Mr. M. Tajammul of Eagle Star (Lahore) etc. To add the biggest name of all, Mr. K.F. Hyder became first Pakistani M.D. of Pakistan Insurance Corporation.

The Company in its 58 years journey, has passed through different phases. first phase ended on creation of Pakistan and the second in 1960. At the beginning of this second phase, as mentioned earlier, the company boldly undertook the responsibility of the major domestic insurance needs of the newly born country but, unfortunately, in later years it faced a lean period. Probably, it had worked harder than its inherent strength and needed revitalisation.

This came through change of the management in 1961 when Mr. Roshen Ali Bhimjee, a well known figure in the insurance industry, took over as Chief Executive. Mr. Bhimjee, an ardent crusader, immediately started reorganising the Company on modern lines, refixing its priorities according to the requirements of the day. He revitalised and rejuvenated the company and infused new blood in its veins. Next decade saw the company going up and up and by the end of sixties it had the proud slogan that "one in every two life policies was issued by the EFU". The company reached the top of the ladder and became market leader both in life and in general.

Separation of East Pakistan followed by nationalisation of life business must have been a severe jolt. But the company withstood the shock. In fact following years saw its (indirect) activities spreading in international fields specially in Middle East to which it provided manpower and expertise just as it had done a few decades earlier at the inception of Pakistan. At present, the company is growing at a pace of which any insurance company can be proud of. The rate of its growth is far ahead of the rate of the economy growth, taken at constant price level. In other words, it is growing in real terms and not merely in terms of figures. This growth is steady and solid which is manifest by the fact that last year 100% bonus shares were issued to shareholders, thus doubling the subscribed and paid-up capital which stands at Rs.2,00,00,000 now. These great achievements have been possible by Keeping alive the flame of dedication and missionary zeal wit which the promoters of the company had started. This flame is still burning. It had started as a mission and as an institution and now it has become a national tradition.
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Title Annotation:Eastern Federal Union Insurance Company Ltd.
Author:Hashmi, Jamal Akhtar
Publication:Economic Review
Article Type:company profile
Date:Dec 1, 1990
Previous Article:Investment corporation of Pakistan.
Next Article:Statistical supplement economic survey 1989-90.

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