THE IMPACT OF GLOBALIZATION OF FINANCIAL SERVICE ON THE DEVELOPMENT OF NIGERIAN INSURANCE INDUSTRY
The study sought to investigate the impact if globalization of financial services on the development of Nigerian Insurance industry (A study of IGI). Globalization refers to the process of the intensification of economic, political, social and cultural relations across boundaries, and it is principally aimed at the homogenization of political and socioeconomic across boundaries. Industrial general insurance company Enugu was used as a case study. The objective of the research were to ascertain why Nigeria insurance industry has not been participating in the international insurance market, and to identify the needs facilities to be used to enhances globalization in Nigeria. The methodology used in obtaining data was a structural questionnaire and its validity of hypothesis was tested using the chi-square statistical model. Data were sourced both through primary and secondary data collection. Approximating scaling statistical model was used in the analysis of response from the respondents. It was discovered from the research work that a lot of problems are facing globalization of financial service on the development of Nigerian insurance Industry in Enugu and recommends that government should help to provide due facilities that will enhance Nigeria Insurance Industry in participating in the international Insurance market.
1.1 BACKGROUND OF THE STUDY
Globalization means the whole world is becoming a global village, the world are coming together to be one in unity, things are happening generally people don’t produce to satisfy the market people around them, but they produce for the whole market. What is happening at Saudi Arabia, America, Europe etc. is happening in Nigeria, Ghana and parts of the whole world it is globalization. Globalization is a new world order that emphasis global perspective of the whole universe in further words that word market is tended towards a universal standard.
The world economy has undergone radical change during the past two decades, geographical and cultural distance have shrunk with advent of jet planes, fax machines, global computer and telephone, look ups, world television satellite, broad casts and other technical advances. This has allowed companies to greatly expand their geographical market coverage purchasing and manufacturing the result is a vastly more complex insurance environment for both companies and customers. Today almost every company, large or small is touched in some way by global competition. From the neighbourhood florist that buys its flower from Mexican. Nurseries, to the small New-York clothing retailer that source its merchandized competing in its home markets with giant Japanese rivals to the large American Consumer gods producer introduce new products into emerging markets abroad.
Companies in various industries are also developing using a global assembly line. In addition is sourcing their components supplier and goods from abroad, many U.S companies are trying to sell their service abroad. But they are recognizing that to do this well they cannot do it along so they are forming strategic alliances with competitors who serve as suppliers or distributors, technological partners or joint ventures partners all of this means that we are seeing and will continue to see some surprising alliances between international competitors e,g ford and Nissan successfully designed a mini-van together and ford has also had a successful strategic alliance with mazde for the past 20 years.
General electric and SNECMA a French company have been making jet engines together, since 1971 Coca-cola and Schweppes run a large soft drink during bottling plant together that has brought both companies, tremendous cost saving. Toshiba supplier line transmitter to JVC Television.
What is internal: The internet is a collection thousands of computer, networks of varying sizes millions of computer more than 30 million users who share a compatible means for interacting with one mother to exchange digital. A system that Commack computer system located throughout the world that willing to share resources. Internet has eructed a co-operative society that forms a virtual community starting from end of global to other.
There are factors that necessitate globalization as follows:
International spread of technology sizes of investment require, reduction of trade barriers and all environmental demographically, psychological and behavioural factors.
Globalization through trade agreement and market integration the success of trading blocks in the world economic depend on members having similar economic structures; being geographically close to each other experiencing a political commitment and solving evidence of trade compatibility (Eieleke) 1992, (Schott 1999). The first exertion refers to the need to accommodate the redistribution of trade flows employment and income which would necessarily arise from the integration of the economics.
Globalization through (GATT) the general agreement of tariffs and round of discussion completed and signed on 15 December 1993 in Geneva and was launched in Uruguay seaside resource of pentodes to see. In September 1986, the Uruguay round of trade talks was the most ambitious attempt to date involving more than 100 countries liberalizing trade and standardizing trade rules in a textiles. The aim was to remove as many trade barriers as possible to encourage closeness of the global the most striking trend in business today is the growing globalization of markets world wide for goods and services. This is true for everything from airlines to automobile, banking to burgers; clothing to computers detergent to disappears, electronics to elevators, software, tooth paste to tacos. Corporations whether of U.S Japanese, European or other National origin are drawing an increasing proportion of their sales from international; markets are the 100 largest U.S multination drive 39 percent of their sales from operations overseas. Company such as Exxon IBM, Colgate pal olive CPC internationals and Coca-cola etc draw more than 60 percent of their sales from operations overseas, international markets are critical for companies such as Unilever the Anylor –dutch conglomerate, Philips, the electronics giant and nestle the SWISS food mammoth who have relatively small domestic market. Vans motivation empires are emerging whose sales volume is often greater than G.N.P of many countries.
Yet globalization is not confined to a globalization in not confined to a large multination. A new breed of :Mhiaction” is emerging opening fall ones research labs and sales units around the world, these are typically mid-size manufacturing companies with sales of N200 million to N1 billion which target special rick market worldwide in areas such as precision institution medical equipment or computer peripherals. Talking advantage of the operating up of market customers firm a limited number of manufacturing bases and keep a clean cooperate profile to compete more effectively in world market. Medtronic, A.U.S.S.S” manufacturer of pace makers has opened plants in Japan and Europe for research and manufacturing to serves these marketing and tap into new technology in micro matching and miniaturization. Japanese and European companies have entered world markets and constitute a major challenge in many industries traditionally dominated by U.S.A firms. Many companies from the newly industrializing and developing economics are also beginning to spreads their wings and to assume increasing important in field such as electronics textiles ship building and steel. Furthermore, the trend towards globalization is occurring not only down stream. In end markets for consumers on industrial goods but also upstream in market for raw-materials technology and other resource in may industrial, global searching is on the increase resulting in the development of complex logistical system designed to take advantages of differential labour, production and raw material cost in different countries as well as the increase efficiently in international transportation and communication networks.
Thomson consumer electronic of France for example, makes components in Malaysia and Indonesia that go into sets, assembled in its highly automated plant in Singapore. Indonesia has now become a favourite place for making expensive owing sticks numerous, U.S Japanese Automobile companies are setting up operation in mexico-ford is investing & 750 million in a plant in Chihualua to manufacture two empires for North America. Mission is spending & I Billion on a new assembly plant at Aquas caleentes to make sentras, some of which are to be re-expected to Japan. Such development imply that all companies need to adopt a global perspective to their strategic insurance planning, irrespective of their interest. In international markets need to identify the most attractive opportunities world wide to determine their global strategy relative to those market. Even companies not considering international operations need to develop strategy with and eye to international operation need to develop strategy with an eye to international development and potential entry of completion into the domestic markets.
1.2 STATEMENT OF PROBLEM
a. Nigeria insurance industry has not been participating in the international insurance market.
b. Facilities to enhance globalization in insurance industry is not adequate.
c. Personal to encourage globalization is not available.
1.3 OBJECTIVE OF THE STUDY
The objective of this research work include the following:
a. To know why Nigeria insurance industry has not bee participating in the international insurance market.
b. To identify the needed facilities to be used to enhance globalization in Nigeria.
c. To identify why the various personal used for globalization are not available.
1.4 RESEARCH QUESTIONS
a. does Nigeria Insurance Industry participated in the international insurance market?
b. Does facilities to enhance globalization in insurance industry adequate?
c. Does personnel to encourage globalization available.
1.5 RESEARCH HYPOTHESIS
Ho: Nigeria Insurance Industry has not been participating in the international insurance market.
Hi: Nigeria Insurance Industry has been participating in the international insurance market.
Ho: Facilities to enhance globalization in insurance industry is not adequate.
H: Facilities to enhance globalization in insurance industry is adequate.
Ho: Personnel to encourage globalization is not available.
Ho: Personnel to encourage globalization is available.
1.6 SIGNIFICANCE OF THE STUDY
The relevance that this study will have is that firms must become customers oriented and markets driven in all that they do. Its not enough to be product or technology driven too many firms still design their producer without customer input to find them rejected in the market place.
More so, the whole world are witnessing the era of unity and harmony (main economically) around the global. Further more, the study will put more light on globalization. It will enlighten those firms that are not up-to-date in modern technology also to contribute to the body of knowledge on insurance. In the general global economic activities. Thus, it can be used to serve as a frame work and reference point for other researchers.
1.7 SCOPE AND LIMITATION OF STUDY
The research is based on the impact of globalization insurance industry.
The area of this research work is Enugu metropolis were the IGI is located, Ogui road.
Limitation of the study, the financial requirement of the research work.
Many factors are limited like:
a. time: Limited time will serve as a limitation factor also the assumption that management to be interviewed may not be easily accessible and in giving sensitive information regarding their company because of their suspicion of industrial competitiveness and security.