DEPARTMENT OF COMMERCE”

Exploring Decreased Gross Underwritten Premiums

at EFU Life Insurance...
(Business Analysis for Decision Making)

PRESENTED BY :

MUHAMMAD MUSTAJAB B2022030

SUMAYYA B2022052
HAMMAD ALI B2022011
SUFYAN KHAN B2022050
INTRODUCTION

 Insurance is a risk transfer tool (Team Economics times, 2019).

 In Life insurance an insured transfers risk of Death to Insurance Company in

return of certain premium (Kilroy, 2022).

 The insurance industry plays a pivotal role in providing financial security and
risk management solutions to individuals and businesses. One of the key metrics
in the insurance sector is the Gross Underwritten Premiums (GUP), which
represents the total amount of premiums collected by an insurance company
before deductions. Understanding the factors contributing to changes in GUP is
essential for insurance companies to adapt to evolving market dynamics
OBJECTIVE

 To dig out the reasons due to which EFU Life had recorded the lowest gross
underwritten premium in the year 2022.

 To recommend measures on the basis of research, following which EFU life can
increase its gross underwritten premium
RESEARCH QUESTIONS

 Identify the impact of Knowledge, and income affordability on the purchase

intention of Life insurance in Pakistan.

 Assess the Pakistanis’ level of Trust on EFU Life Insurance.

LIMITATIONS

 The research is conducted in Karachi and majority of samples are collected from
people of Karachi, therefore the results may vary if the same study is conducted
in other regions of Pakistan.

 Only three variables (i.e. Knowledge, income affordability, and trust) are
considered in this research. Other factors may also be included in future studies.
LITERATURE REVIEW

S. No. Author Year Findings Limitation

Lack of knowledge of Insurance causes declined Life insurance
1 J. Kaur 2015 Research done in India only.
Demand.
C. P. Ehiogu Samples collected from Nigeria
2 2018 Inflation hurts Growth of Life insurance.
& et al. only.
K. A. Culture, Religion & Family influences the purchase decision of
3 2022 Limited to Nigeria only.
BANJO Life Insurance.

M. P. Segodi Income, unemployment, Inflation, Financial Freedom, and

Samples collected from BRICS
4 & A. B. 2022 Interest Rate are the main determinants of Life insurance
countries Only.
Sibindi demand.

J. J. Burnett Religion, Education, and Income as the main variables involved

Samples collected from South-West
5 & B. A. 1984 in the purchase of Life insurance in South-West cities of
cities of America Only.
Palmer America.

Detriments are collected from the

Age, Size, VOC, Leverage, and loss ratio of the company are the
6 H. Malik 2011 point of the Insurance Company
determinants of an Insurance company’s profitability.
only.

Detriments are collected from the

Q. M. Ali Identified Inflation and GDP as the determinants affecting the
7 2016 point of the Insurance Company
Jibran profitability of Non-Life Insurance Companies in Pakistan.
only.
HYPOTHESIS DEVELOPMENT

 H1: Knowledge affects the demand for Life insurance in Pakistan.

(Kaur, 2015)

 H2: Income Affordability affects the demand for Life insurance in

Pakistan.
(Burnett & Palmer, 1984; Segodi & Sibindi, 2022)

 H3: Trust of Customer towards the company affects the demand for Life
insurance.
(Eid, 2013; Panigrahi, Azizan, & Waris, 2018)
CONCEPTUAL FRAMEWORK
METHODOLOGY
Research Design
Research Philosophy Positivist
Research Method Quantitative
Research Approach Deductive
Research Strategy 5-Scale Likert Scale
Time-Horizon Cross-sectional

Sampling Design

Population All residents of Pakistan

Sampling Method Non-Probability Sampling

Sampling Technique Convenience Non-Probability Sampling

Sample Size 150 Samples

POWER BI -DASHBOARD
POWER BI -DASHBOARD
 DECISION MAKING

Following are some steps/decisions that EFU Life Insurance could take in
Pakistan to decrease mis-selling of products and increase trust or market share:
1- Conduct Quality Control Checks: EFU Life Insurance could introduce a Quality Control
Framework similar to Aviva Life Insurance

2- Implement Mystery Shopping: EFU Life Insurance could implement a Mystery

Shopping program to test its sales processes and identify areas of improvement.

3- Use Technology: EFU Life Insurance could leverage technology to provide customers
with accurate information about its products and services.
RESULT

Trust significantly influences the decision of insurance,

with a strong positive impact, while Knowledge has a
marginal effect, and Income does not significantly
contribute. The constructs demonstrate reliability, validity,
and discriminant validity, supporting the robustness of the
model.
 CONCLUSION
 Private insurers, like EFU Life, face challenges competing with state-owned
insurance in Pakistan, impacting Gross Underwritten Premiums (GUP).
 Literature review and analysis of Pakistan's insurance landscape uncover factors
influencing GUP, highlighting the struggle of private insurers.
 Lower life insurance density underscores the need to analyze consumer behavior
and market conditions for effective market share capture.
 A trust deficit in the market presents an opportunity for EFU Life to strategically
intervene and enhance transparency, ethics, and customer satisfaction.
 Quality control frameworks, mystery shopping programs, and technology
adoption are recommended to rectify GUP declines and establish a competitive
edge.
 Trust is identified as a pivotal factor in the insurance market, forming the basis
for advice to EFU Life to address challenges and thrive in Pakistan's evolving
insurance landscape.