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It is my pleasure to place before you, on
behalf of the Board of Directors of The
Metropolitan Life Assurance Company of
Pakistan Limited, the 15th annual report
together with the audited financial
statements of the company for the year ended
December 31st, 2007.
THE ECONOMY
The country’s overall situation during the
year 2007, especially on the political
front, remained complicated. The conditions
were also adversely affected as a result of
the incidents of October 18th, imposition of
emergency and tragic assassination of a
leading political figure on December 27th.
Moreover, the disturbances leading from this
sad happening at the end of the year quite
adversely affected the insurance industry.
However, fortunately, the life insurance
industry remained largely unaffected by the
unrest. Nevertheless, the resultant affects
of the December 27th incident on the stock
exchanges of the country did have
undesirable affects on the investment
portfolios of most corporate entities.
Nevertheless, for the most part of the year,
the economic front of the country remained
quite stable, which continued to create a
positive environment for growth and
expansion in most sectors of Pakistan’s
businesses, including the insurance
industry, which, with assistance from
satisfactory economic development, continued
to expand at a reasonable pace during 2007.
COMPANY’S FINANCIAL
PERFORMANCE Although
2007 was a challenging period for the
insurance industry in Pakistan, The
Metropolitan Life Assurance Company of
Pakistan Limited was able to achieve several
important milestones in its 15 years history
with regards to its financial performance,
such as:
Total Assets of
the Company crossed Rs. ½ Billion,
Total
Authorized Share Capital reached Rs. 500
million while the Paid-Up Capital
increased to Rs. 352 million,
Total Income
crossed Rs. 200 million,
Gross Corporate
Premium Income crossed Rs. 150 million,
and
Most
importantly, the net shareholders’ equity
crossed Rs. 372 million, which includes
paid-up capital of Rs. 352 million.
Besides this, the
total after tax operating profit for the
company grew by over 164% to more than Rs.
89 million in the year under review
primarily due excellent premium income
growth and extraordinary increase in the
company’s investment returns. The
exceptional financial performance and
further capitalization of the company has
resulted in Net Shareholders’ Equity growth
of nearly 140% or Rs. 217 million to more
than Rs. 372.3 million as at December 31st,
2007. In 2007, Rs. 152 million was further
inducted in the company’s paid-up capital,
which has become part of its equity. The
capital induction accounts for approximately
62% of the growth in the equity while the
remaining portion is attributed to
remarkable results in the company’s profit
and loss account, which are quantified by
the more than 206% growth in profit & loss
earning per share from 80 paisas in 2006 to
Rs. 2.45 paisas in 2007. In connection with
this, the company has achieved increase in
profit of 422% or Rs. 67.4 million in its
profit & loss account from nearly Rs. 16
million to more than Rs. 83.3 million.
Your company’s 2007 financial results are
indicating that the initiatives by the board
and senior management of the company
continue to harvest benefits by further
increasing overall profitability, which has
cleared the accumulated deficit of the
organization and has re-shaped the
organization as a major player in the life
and health insurance industry of the
country. On behalf of the Board of
Directors, I genuinely congratulate the
management of the company on their
accomplishments during 2007 and fully expect
further improvement in the overall
performance of our company in 2008 and
beyond.
FUTURE PROSPECTS OF THE
COMPANY
Now that the company’s management has
launched a brand new and latest individual
life policy called “Mehfooz Sarmaya Plan”,
which is based on principles of Universal
Life plan, it is unmistakable that 2008 and
the next three to four years will be crucial
for the company’s future with regards to its
individual life business. As majority of the
company’s existing policyholders have
already chosen to convert their policies to
the new Universal Life plan, the management
is now turning their focus on procuring
fresh business under this new plan via
certain major urban centers of Pakistan.
With this objective in mind, the company is
taking a number of essential actions to make
certain that proper and timely
implementation takes place within the first
quarter of 2008.
Besides this, the management has taken
serious notice of the unusual increase in
corporate/group claims during 2007 and has
already taken several steps to improve
underwriting, premium calculation basis and
claims handling procedures/policies. The
company is confident that these actions will
result in marked improvements in the claims
ratio in the year 2008. Furthermore, the
management intends to continue its focus on
expanding its premium base in all business
areas through controlled underwriting,
reducing operating expenses and continued
enhancements in customer-oriented services.
It remains your company’s primary target to
eternally endeavor to become the top life
and health insurer of choice for all types
of corporate and individual clients while
surpassing expectations of its shareholders
and policyholders.
To assist your company’s management in
reaching these goals, the focus for the
future will be on the following key areas:
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In connection with the company’s newly
launched “Mehfooz Sarmaya Plan”, several
branches will be established in certain
major urban centers of the country. However,
emphasis will be placed on using the
company’s existing office space for this
purpose. Moreover, the company will also
initiate a practical and tactically designed
advertising campaign for the launch and
onward marketing of this product-line.
-
The company will further enhance, in
consultation with the company’s actuary, the
new individual life product-line in order to
capture selected niche business. In
connection with this, the actuaries of the
company are exploring products directed to
achieving further business relations with
our existing large corporate clients to
market the “Mehfooz Sarmaya Plan” to their
employees with a view of additional
protection and investment planning for the
future.
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The company’s Information Technology (IT)
department is focusing on completing the
task taken on by them last year of revamping
the software systems. The new software
system will vastly improve client services,
productivity and preparation of management
information reports by completely
integrating the system within day-to-day
operations of the company.
By focusing their attention on these areas,
I am confident that your company will meet
the long-term opportunities available in the
market while, at the same time, taking-on
the short-term challenges through customer
focus and an effective/professional sales
force emphasizing on corporate and
individual business growth. By using the
company’s business model and prudent risk
management practices, the management
continues to closely monitor on-ground
market realities, which allow us to
aggressively pursue and take advantage of
new opportunities. The board and management
of the company are certain that our strong
customer base, deep client relationship and
unmatchable services will give us a
sustainable long-term competitive advantage.
ACKNOWLEDGEMENTS
I would here like to take this opportunity
to express my sincere thanks to The Ministry
of Commerce, Government of Pakistan, and the
Securities and Exchange Commission of
Pakistan for their continued direction and
support in managing the affairs of the
company in a prudent manner.
The directors wish to record their
appreciation for the tremendous contribution
made by the able and eminent officers, staff
and sales force of the company towards its
development and growth. Their continuous
commitment to high ethical standards, client
service and hard work has helped your
company emerge and maintain its position as
a key member amongst private sector life
insurers.
Moreover, we also wish to thank the
Insurance Association of Pakistan for their
assistance and valued representation of our
industry. We would also like to sincerely
express our gratitude to the company’s loyal
policyholders and corporate clients for
their continued support and confidence in
our company.
Lastly, my thanks and appreciation to the
thousands of our shareholders, whose
enthusiasm for the company is a source of
confidence for us to make Metropolitan Life
a sound and reliable financial organization
and a symbol of security for the
marketplace.
May Almighty Allah bless us all (Ameen).
On behalf of the Board of Directors
CHIEF JUSTICE (R) MIAN MAHBOOB AHMAD
Chairman
Karachi, March 3rd, 2008
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