The automobile sector in Pakistan is observing a tremendous growth, the banks and leasing companies have been the driving force behind this growth.
Banks and Leasing companies are financing the purchase of cars, motorcycles and commercial vehicles on easy instalments making it convenient for general public to purchase the vehicles for their business, personal and family use.
When banks and leasing companies finance the vehicles there is a risk of loss or damage to vehicle in case of theft, total loss and accidental damages.
If a car is being stolen or meet a severe road accident, the entire finance amount of the bank will be lost.
Every major financial institution who is in car financing business has exposure of billions of rupees, which requires proper protection in case of theft or other accidental damages.
In Karachi alone around 4000 vehicles are stolen, the approximate loss comes to around 3.0 billion rupees every year.
Besides the individual losses, there is a risk of accumulation of losses in case of catastrophic events, earthquake, floods, terrorism and Riot Strike Damage. There is always a possibility of accumulation of losses of millions of rupees in one single event in one single day for every bank and leasing company involved in car financing business.
Keeping in view the unpredictable law and order situation in the country, and exposure to natural hazards, every bank and leasing company need adequate and proper risk management program to protect their credit exposure of billions of rupees.
This protection can be provided only by financially strong insurance companies who has the capacity to accept such huge risk and service thousands of clients of these banks and leasing companies scattered all over the country.
Efu General Insurance has been in the general insurance business since 1932, today it is a leader in the risk management of credit exposure of banks and leasing companies involved in car financing, enabling them to lend billions of rupees to general public.
Efu General has been a pioneer in introducing innovative products for financial institutions. One of its premium products is a combination of life insurance cover with the motor policy, in case of natural death of a lessee, Efu will pay the outstanding loan amount to the bank and will give car to the beneficiaries of the lessee.
Similarly personal accident cover is offered with the motor policy, in case of accidental death of a lessee, outstanding loan amount is paid to the bank and car is given to the beneficiaries of the lessee.
It is the financial strength and the high quality of service of Efu which has gained the trust of almost every financial institution in the country. All the major banks and leasing companies, Citi Bank, Bank Alfalah, Standard Chartered Bank, Muslim Commercial Bank, Habib Bank, Faysal Bank, Union Bank, First International Investment Bank, Meezan Bank, Bolan Bank, Prime Commercial Bank, Askari Leasing, Dawood Leasing, Orix Leasing, Al Zamin Leasing, Sigma Leasing and almost all the other banks and leasing companies are insured with efu. This long list of names is evidence of the letter insurance products and better services offered by efu to its clients.
In the absence of financially strong and service oriented insurance companies, there is a very strong possibility for every bank to loose huge sums of money in case of failure of an insurance company to meet its obligation.
It is in extremely important for every banks and leasing company who is in the car financing business to carefully select an insurance partner who has the necessary financial capacity and experience in risk management of car financing business.
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