Category: Education

What do insurers do?

Insurers perform a series of functions, many of them really important roles in our society.

The key role of insurers is to help their policyholders manage risk efficiently through providing insurance products, and paying the claims covered by their insurance policies.

In fact, according to the Financial Ombudsman Service (FOS), insurers pay out more than 97 per cent of the claims they receive*.

Insurers have the ability to help individuals and communities recover after natural disasters. They are also large direct and indirect employers and are a vital part of the Australian economy. Insurers are large institutional investors, helping to fund economic activity such as infrastructure projects. Insurance also plays an essential role in the operation of the Australian economy because it encourages people and businesses to make high-value investments, such as committing to buying a house or spending money on infrastructure for a business.

A robust insurance industry is the hallmark of a modern society and economy.

* Financial Ombudsman Service General Insurance Code of Practice Overview for the Year 2011-12

Pooling insurance premiums

Insurance is all about pooling the resources of a large number of people with similar risks to make sure that the few who experience loss are protected.

When you pay an insurance premium, you are putting a little of your own money into a pool.

With general insurance, pooling resources through the payment of a premium may allow you to avoid paying the full cost of replacing, repairing, rebuilding or restoring valuable things if they are lost, stolen, damaged or destroyed, or being saddled with a large debt or liability.

If your property is accidentally lost, stolen, damaged or destroyed, and you have a policy that covers the property for those risks, you can make a claim and draw on that pool of money to help pay for repairs or replacement costs.

However, insurance is not the same as banking. When you pay an insurance premium, you will have access to the pool of money only if you claim a loss that is covered by your insurance policy.

It is possible that a person who has paid an insurance premium for many years might never make a claim.

When you buy an insurance policy, your insurer promises it will pay you for the type of loss stipulated in the policy – such as an accident, theft, loss or catastrophe – by funding repairs or replacement of items, up to the limit of your policy, or sometimes by providing a cash settlement. Each insurer’s policies have different rules about what the policy will cover. Exclusions may apply, so you should read your policy carefully and seek advice if you’re not sure what your policy will cover.

What is underwriting?

Underwriting is the way an insurer works out how much to charge for each risk they cover for each person who buys an insurance policy and under what terms.

When preparing a policy, insurance underwriters will calculate:

  • How much they will agree to pay for a loss
  • Under what circumstances they will make a payment
  • How much the premium will be

Underwriters think about a number of different things when working out the price of a particular risk for insurance. For example, car insurance premiums may vary depending on the age, sex and driving record of the main drivers, location and the type and age of the car.

Every insurer has its own set of underwriting guidelines to help the underwriter determine whether or not the company should accept the risk of a particular situation.

In some cases, an insurer may decide it won’t cover a particular risk. This often opens the market up for other insurers.

Underwriting involves working out a premium that is low enough to attract a good number of buyers, and high enough so that there will be enough money in the pooled funds to pay all the claims that might be made, plus make a profit for the insurer’s shareholders.

What is reinsurance?

Reinsurance is like insurance for insurers. It can be used to cover different risks for insurers. For example insurers may use reinsurance to make sure they can pay a large number of claims if a big disaster, such as a cyclone or flood, happens. This is usually called catastrophe cover to cover the big volumes of claims that may occur if there is a natural disaster.

Insurers may also use reinsurance to cover situations where they experience claims from policyholders that are higher than a certain value, which has been agreed beforehand with the reinsurer.

Reinsurance involves a number of insurers, often from different geographic regions, that pool together to share their risk exposure.



Insurance Premiums explained

Insurance Premium

A premium is the amount you pay an insurer for insurance cover.

It reflects what the insurer believes is the likelihood you will make a claim. It also includes an insurer’s business costs, and may also reflect the benefits of any discounts or bonuses the insurer may offer to you.

The amount you have to pay is shown in the policy schedule, which the insurer will send you when the cover has been arranged.

The final amount you pay also includes state and territory stamp duties and levies, and the Goods and Services Tax (GST). These taxes can add a significant amount to the sum the insurer requires you to pay for the policy.

How it works – calculating premiums

Insurers each make their own commercial decisions when deciding how much to charge each person who wants to cover certain risks for something valuable to them.

For example, when you apply to insure your car for a comprehensive or a third party property policy the insurer will decide how much that particular car is worth (market value) and what risks are worth insuring. The insurer may also allow you to nominate the insured value of the vehicle.

Insurers refer to data when they make these decisions. If the car is kept in a suburb with higher rates of car theft, you will be given a higher level of risk (and therefore may pay a higher premium) than someone whose car is kept in a place where car theft rates are low.

Insurers may also look at other issues such as the driver’s age, their sex and claims history. This is because some demographics are statistically more likely to make a claim on their policy than others. Yet another factor that influences risk is the driver’s personal driving record. Most insurers will take into account whether you have been at fault in other accidents or whether you have been penalised for speeding, drink driving, or other traffic offences.

All of these factors will help insurers work out an appropriate premium.

Insurers must also decide how much coverage will be offered (unless you nominate a value) and in some circumstances may not offer insurance if the insurer believes the risk is too high.

However, you must agree to all the terms of the policy when seeking the insurance cover, including the extent of cover and any terms and conditions, or the insurer will not offer it. You may also have a choice about some aspects of the policy, such as the amount of excess and optional extras.

Similar principles are used in calculating premiums for all types of insurance.

Why premium prices change

Your premium is likely to change each time you renew your insurance, even if your personal circumstances don’t appear to have changed.

This is because premiums are affected by many factors, including the cost of doing business and changes to the way your risk has been assessed.

Sometimes premium prices will go up across the board, and sometimes your own premium might go up because your level of risk has increased. But if something helps to reduce the risk, this may be taken into account with a lower premium.

There are a few different reasons your premium may change, including:

  • Inflation. Insurers will often adjust premiums to keep pace with inflation
  • Changes in government taxes and any state or territory duties or levies
  • A reassessment of your individual risk by your insurer, especially following a claim or a natural disaster, or fresh information from government or an expert
  • Changes you make that reduce your risk, such as installing a home alarm system
  • The number of claims experienced in that sector of the insurance industry
  • Large-scale claims due to natural disasters such as floods and cyclones
  • Investment returns. Insurers invest premiums to help ensure they have sufficient capital to pay future claims. Poor returns may require a lift in premiums
  • Regional or global changes that affect the price and availability of reinsurance
  • The value or quantity of what you are insuring may have changed
  • The insurer’s cost of doing business

If there has been an unusually high number of claims in the previous year (for example, following a big natural disaster such as a cyclone, flood or bushfire), some insurers may need to increase premiums to restore the balance between the pool of funds available to pay claims and the risk.

Your own premium might also go up (or down) because of a change in your risk. For example, if you received a speeding ticket or caused an accident, your insurance premium may go up at the time of renewing your policy (you are obliged to inform your insurer of these matters.

Receiving a renewal notice of a higher premium might prompt you to go searching for alternative policies which might offer cheaper premiums.

It is important to shop around to get the best policy for you, particularly if your own circumstances have changed over the year. It is also worth considering whether there have been any changes in your circumstances which might let your current insurer charge you a lower premium.

For instance, if you have fitted a car alarm to your car, it is worth checking whether your current insurer offers a premium discount.

You can also ask you insurer about what you can do to lower your premium.

What may influence your premium?

When your insurer calculates your premium, it is likely to take a range of factors into account. These factors will change from person to person.

Some key factors influencing your premiums may include:

  • Type of cover selected
  • Any optional benefits you have selected under your policy
  • Discounts you are eligible for
  • Previous claims and incident history
  • Whether you choose to pay your premium annually, monthly or by instalments
  • Government taxes and any state or territory duties or levies
  • How much cover you want
  • Your risk assessment by the insurer
  • The level of excess you select

Balancing premium prices

Working out the correct price for insurance premiums is a complex process that must balance the availability of funds, the likelihood of certain claims (the risk) and the ability for the pool of money from all insurance premiums to cover the cost of claims.

Insurers must rely on claims histories, statistics and probability calculations to plan how much they may have to pay out. They may also seek specialist help or information on certain risks, such as flood maps or seasonal weather forecasts.

Not all risk is the same

No one can be sure what losses they may suffer – not everyone’s risk will be the same.

An insurer will charge a higher premium when the risk of accident, loss, theft or catastrophe is greater.

Because of this, insurance premiums will vary from person to person because insurers try to make sure that each policyholder pays a premium that reflects their own particular level of risk.

No two insurers offer the same policy with the same terms and conditions, and this can make comparing policies very important. Policies and premiums may also differ if insurers are using different information – for instance, some insurers have enough information to look at and price the risks for an individual address, while others may rely on data for the whole postcode until better information is available.

When you apply for a policy, the insurer will decide if it will insure your risk, work out how much coverage to offer you for the items you are insuring and how much you should pay for it.

Premiums go to an insurer’s capital base

Insurers must meet strict regulatory requirements and set aside enough money to meet the prudential capital requirements of APRA so that there’s always enough money to pay many claims at once – such as when a large natural disaster occurs  – as well as the$25 billion-plus typically paid each year for normal claims*.

The prescribed capital requirements (PCR) of insurers amounts to many billions of dollars, which are invested. These investments are an integral part of the Australian economy, supporting businesses, industries, infrastructure projects and the financial system.

Most insurers are owned by shareholders (including superannuation funds and investment funds) and the insurer has an obligation to provide them with a return on their investment.

The Australian Prudential Regulation Authority (APRA) has rules requiring insurers to have enough capital to pay a very high volume of claims.

*APRA Quarterly General Insurance Performance Statistics June 2013 (issued 29 August 2013)

Managing premiums

The large number of competing insurers, and the variations available on general insurance policies (such as exclusions, inclusions, excesses and premiums), give consumers plenty of choice.

Shopping around to find the policy that best suits your particular circumstances can lead to you finding a cheaper policy.

However, shopping on price alone may result in a policy that does not meet your specific needs and leaves you financially exposed to certain risks.

Reducing your level of cover can lower your premium, but it increases your risk of being underinsured. For more information on underinsurance and ways you may be able reduce your risk click here.

Tips for managing premiums

Consider these tips to manage the cost of insurance:

  • Increase your excess
    One way to reduce the amount of the premium you pay is to agree to take on a certain proportion of the risk by increasing your excess. Many insurance policies allow you to specify an excess. In general, a higher excess will mean you pay a lower premium
  • Lower your risk
    Many insurers will offer you a cheaper premium if you take steps to lower your risk. You may receive a discount on your home and contents policy if you have security devices in place such as window locks and deadlocked doors. In some circumstances, insurers may not offer you a policy unless you have taken reasonable steps to lower your risk. Click here for more information on managing your risk
  • Talk to your insurer
    Providing additional information to the insurer about your specific risk may also allow your premium to be reviewed. You can also ask your insurer about how you might be able to lower your premium
  • Shop around
    Each insurer will offer products that differ from those offered by other insurers, with variations in the coverage, the terms and conditions, exclusions and costs
  • Ask if you qualify for any discounts
    Some insurers may offer discounts such as a no claims or multi-policy discount if you have two or more policies with one company
  • Pay your premium annually
    If you pay your premium by instalments it generally costs you more than if you choose to pay your premium in one annual lump sum payment



Sheikh Zayed Islamic Center

Sheikh Zayed Islamic Centre photo by Shahbazfar

Sheikh Zayed Islamic Centre was established by His Highness Sheikh Zayed Bin Sultan Al-Nahayan, President of United Arab Emirates and Ruler of A bu Dhabi at Karachi, Lahore and Peshawar. The Centre was set up with the objective of streamlining instructions and research in Qur’anic Teachings and Ara b ic Studies while at the same time making these studies compatible with new developments in the fields of modern science and technology. This integratio n of Computer Science to Qur’anic and Arabic Studies is imperative to face new real iti es and future challenges.

The Qur’an Computer combination ideally aims to cater to precision of reasoning and clarity of presentation among the scholars who receive instructions at the Centre. This is the most pressing need of the Ummah, since Islam is the universal religion and Qur’an, the ultimate Book of wisdom, and scientific study of Qur’an is vital to remove the cobwebs of woolly thinking and to present Islam as the panacea of all contemporary maladies.

The full time programs offered are B.S & M.S. (Islamic Studies with Computer Technology) while PGD & Master in Islamic Banking & Finance. In 2014 the Center also started it M.Phil/Ph.D in Islamic Banking and Finance. Also a wide range of Certificate Courses are also offered in the domain of Islamic Banking and Finance as well as in the field of Computer Technology.

Other than the regular faculty, the visiting faculty of the campus comprise of renowned scholars and professionals from the Islamic financial sector. Some of the renowned names include Mufti Irshad Ejaz, Mufti Mufti Najeeb Khan, Mufti Khalil Azmi, Mufti Ibrahim Essa, Mufti Nadeem Iqbal, Mr. Omar Mustafa Ansari, Mr. Mujeeb Beig, Mr. Mohammad Imran, Mr. Mahmood Shafqat, Mr. Munir Mansuri, Mr. Javed Ismail, Mr. Fareed, Dr. Mufti Zubair Usmani, Mr. Rizwan Chaghtai, Mufti Syed Sabir, Mufti Syed Zahid, and Mr. Abdul Jabbar Karimi.

The Sheikh Zayed Islamic Centre in its size and splendor can be compared to any campus of world-class institution of higher learning.The facilities are immaculately maintained in line with the Sheikh Zayed Islamic Center tradition of excellence in all facets of its activities.

The Sheikh Zayed Islamic Center is a large complex of buildings spread around lush green sprawling lawns, which serves as a backdrop to an extremely conducive environment for academic pursuit .The Sheikh Zayed Islamic Center lies in the heart of the education district of Karachi.Apart from housing ten classrooms, it has a Library , an Auditorium, a Mosque, a Conference and Seminar Rooms,and a Computer Lab.The classrooms at Sheikh Zayed Islamic Center are large and airy and fully equipped with modern audio-visual facilities,to enhance the learning experience and make it more interactive.All facilities at Sheikh Zayed Islamic Centre are accessible to the students,faculty and course participants.

The Center had been publishing two separate research magazines annually in English and Arabic since 1990.Now the Center has been able to publish a tri-linguistic (Urdu,English and Arabic) by Quarterly, Research Journal namely As-Saqafat-ul Islamia (Islamic Culture) and the center is publishing a Quarterly bilingual Newsletter as well.


National University of Modern Languages

The National University of Modern Languages was established as an institute in 1970 to help people communicate and understand each other in different oriental and occidental languages, to assimilate different cultures and to act as springboard for emerging disciplines. Initially, the institute provided language training facilities to personnel of armed forces and other government services of Pakistan. It was upgraded to University on May 29, 2000. In achieving this benchmark of a fully autonomous University, it has crossed many barriers and achieved a status of a seat of learning contributing new knowledge in local and global perspective and now teaches 27 oriental and occidental languages in addition to a number of emerging disciplines. Now, the University has a vibrant and well-grounded research program, offering MS/MPhil and PhD research degrees in various disciplines.

numl islamabad
numl islamabad

The University is open to all classes and creeds, persons of sex, religion, race, color or persons with physical disabilities without any discrimination.
Located in the South West of the stunning capital city of Pakistan, Islamabad, in the backdrop of Margalla Hills, it is spread over an area of 25 acres. It can accommodate over 10,000 students for on campus education. There are more than 35 teaching departments. There is a unique composition of student body in the University which comprises of foreign students from Saudi Arabia, China, Korea, Iran, Middle East, Central Asia and other countries, a large number of Pakistani students, armed forces personnel and government officers of Pakistan and foreign countries. The University has more than 500 well qualified faculty members to manage the teaching and research activities in various disciplines. The University campus consists of five multi story academic blocks and an IT block. It has four hostels for students’ accommodation. More development /construction plans are in the offering to provide maximum facilities.  The library of the university has over 150,000 books with facilities of information communication technology. With a large fleet of buses, it comfortably meets the commuting requirements of both students and faculty members. The University has seven regional campuses in all four provinces of Pakistan. These campuses are fully functional and offering programs in various disciplines.


University of Karachi

Spread over 1200 acres of land, University of Karachi was established through the parliament as a Federal University in 1951. However, through another act of the parliament in 1962 its status was redefined as university of the province of Sindh. On 23rd October, 1950 the Karachi University Act was passed and after an amendment in 1951, it was enacted and Prof A. B. A Haleem was appointed as its first Vice Chancellor. For the first two years, the University of Karachi remained as an examination University for the affiliated colleges. In the year 1953, it started its teaching and research activities at two Faculties of Arts and Science. Opened with an initial intake of 50 students, the university is now a sprawling structure of 53 Departments and 20 world class and highly reputable Research Centers and Institutes, under eight faculties of Arts, Science, Islamic Studies, Pharmacy, Management and Administrative Sciences, Law, Education and Medicine. At present, the enrolment of regular students at the Campus is slightly over 24,000. There are over 800 teachers and more than 2500 supporting staff.

University of Karachi
University of Karachi

The University in the beginning was housed in small buildings adjacent to the Civil Hospital. Meanwhile, due to rapid expansion, it began to be felt that the space in which the university was functioning was not enough for its needs. Moreover, the atmosphere of the congested and polluted area was not conducive to higher education and research. Thus, a plot of 1279 acres of land was acquired on the Country Club Road (now University Road) and on 18th January 1960 the university was shifted to the new campus. Thus began, a new phase in the life of the university. The day is still commemorated by various old students’ Association and the University administration jointly.

Karachi University always proudly mentions the names of renowned educationists and scholars associated with this institution of higher learning like, Dr. I. H. Qureshi, Dr. Mahmud Hussain, Dr. Salemuzzaman Siddiqui, Dr. Afzal Hussain Qadri, Dr. M. M. Ahmed, Dr Mujtaba Karim, Prof. M. Ilyas, Prof. Q. Fareed, Dr. Ibadur Rehman Khan, Prof Muntakhib ul Haq, Prof. Memony, Dr. S. M. Yousuf, Dr. M.A Wali and Dr. Karawala. The faculty was drawn not only from Pakistan but also included eminent educationists from Europe and America.

The Karachi University today is the biggest university in the country. It comprises eight faculties with which all the colleges of the city are affiliated. B.S., M.S., M.Phil. and Ph.D. classes under five of these faculties Arts, Science, Pharmacy, Management and Administrative Science and Islamic Learning are conducted on the campus, while under the Faculties of Medicine, law and Education it examines the students admitted to their affiliated colleges. Research programmers leading to M.Phil and Ph.D Degree are offered under all the faculties.

The Science Faculty which consists of 23 departments and five research Institutes can be said to be the biggest scientific centre in the country. The Research Institutes include the HEJ Research Institute of Chemistry, which is world renowned and has also been designated World Academy of Science. It is the prime research institute of the country and has high level research faculties for chemical science particularly Natural Product Chemistry.

Other Institutes are Dr. Panjwani Centre for Molecular Medicines and Drug Research, Khan Institute of Biotechnology and Genetic Engineering, Dr Afzal Hussain Qadri Biological Research Centre, which is a common research facility for all the biological science departments; the Marine Resources Collection and Research Centre, which is the biggest repository of marine life from the Arabian Sea. National Nematological Research Centre, which undertakes research in plant pest control. Centre of Excellence in Marine Biology, a federally founded centre for the study of marine fauna of the Arabian Sea; the Institute of Environmental Studies, Institute of Molecular Genetics and Umair Basha Institute of Information Technology which houses the department of Computer Science.

It is noteworthy that the number of M.Phil/Ph.D in science produced by the Karachi University far exceeds the number produced in any other university of the country. So far, about 600 M.Phil, 300 Ph.D, 7 D.Sc and 7 D.Litt. degrees in Science have been awarded by the university. The University teachers are also involved in various research projects and contribute regularly to publications of home and abroad. Only in 2006 the number of research papers published by the faculty of the university was 506.

The library of the university is one of the largest library in the country. Housed in spacious building, it has a collection of over 360,000 books, and over 110,000 copies of national and foreign journals and periodicals. There is also a microfilm section which has copies of rare manuscripts from the British museum, the India Office Library and the Bodleian and Cambridge University libraries.

A highlight of the library is the Quaid-i-Azam’s personal collection of books, many of which carry his own signature. Copies of the All India Muslim League papers are also available. Work is in progress for setting up a resource centre, equipped with internet and scanner microfiche. Now, the Central Library is being gradually digitalized and will be able to cater the larger number of students. The LEJ National Science Centre is the most significant addition to the Karachi University which is a recent development.

The centre not only houses one of the largest digital one libraries of the mechanism and capacity to assist other campus library by resources and provide leadership in the application of technology to help the researchers, scientists, scholars and students of academic and R&D institutions of Pakistan Facilities of video conferencing are available and fully operative. Beside the central library, every department also has its own seminar library equipped with the necessary books.

The University of Karachi introduced the Evening program in 1995 to provide an opportunity to the in service peoples and professionals to pursue higher education in the evening initially at a few departments The program started while gradually the number of departments offering degree courses in the evening has increased.

Four Year Degree Program: The latest development this year is the introduction of four year degree program at the University to bring the university education at par with the International standards. In the revised curricula of four years program a number of new subject have been added to enable the passed out students to have wider opportunities in the job market.

The University of Karachi witnessed a new era of speedy developments in all spheres when Dr. Ishrat Ul Ebad Khan took over as Governor of Sindh and Chancellor of the universities in the province. His deep personal interest and commitments in the university affairs is an ongoing source of continued interest in academic, research and managements activates at the intellectual growth at the campus.

The University has now embraced upon a gigantic process of multifaceted progress with emphasis on capacity building and quality enchantment. Ever since its inception, it is in this era that constitutional and statutory bodies of the university are holding their meeting with regular intervals, further bolstering the process.
Regular holding of Selection Boards has enabled the University to add more than two hundred new teachers to various faculties and departments in 2006-07. Many departments in faculties of science and Arts where strengthened by modernizing facilities recently to enhance their quality and productivity.
These include Departments of Physics, Chemistry, Statistics Food Science and Technology, Biotechnology, Computer Science and Mass Communications. For common facilities for science in various scientific disciplines a centralized science lab has been established. It has further enhanced the capabilities for scientific research. Some noteworthy developments which serve as land marks in the university include a highly sophisticated and well equipped Herbarium for research in plant science.

Already completed Botanical Garden is first of its kind in the country. The Garden adds plenty of beauty to the campus on the one hand while on the other it serves as an open lab for the Plant scientists.

Construction of hostels for the visiting faculty and research scholars and additional facilities for M.Phil/Ph.D scholars, have further enhanced chances for quality and speedy research. The perennial residential problems at the campus are also expected to solve partially with the completion of new blocks of the staff apartments. All these and many other successes were due to active encouragements the university received from the Higher Education Commission and the Chancellor of the University.

A number of new development projects are on the anvil while many others are at various stages of completion. The University is now moving fast on the path of developments playing its due role in the national development.