IMPACT OF INSURANCE BUSINESS ON THE ECONOMIC DEVELOPMENT OF NIGERIA
This project work is entitled, the impact of insurance on the economic development of Nigeria. It was carried out in NICON Insurance Corporation Lagos as a case study. The objective of this research is to comprehensively examine the impact of Insurance on the economic development of Nigeria. This study is categorized into five (5) chapters. Chapter one is basically an introduction from which the subsequent chapters draw their root. It talks about the background of the study statement of problem, objective of the study, relevance of study formulated and operational definition of terms. Chapter two is a review of other professional insurer as they relate to the above mentioned topic. It is sub-divided into twenty — three (23) heading where we have the fundamental principles of insurance law, insurable interest, insurable interest, types of insurance functions, the significance, the importance and problem etc. Chapter three (3) of this study deals with the various research methodology and procedure adopted or used in administrating data collection and chapter four (4) analysis of the data collected and presentation of the result of the hypothesis stated. Conclusively, chapter five (5) being the last chapter briefly summarized the previous chapter and the research finding, conclusion and recommendation were also made in this chapter as well as reference and appendix.
1.1 Background of the Study
Development in our society has made living complex and risky to life and properties. This has become so great that the traditional methods of assisting those affected by misfortunes in our societies are no longer adequate. Therefore, societies call for a more reliable and adequate means by which risk or any misfortunes can be covered in the future, and here lies the importance of insurance which safeguard against risks or losses incurred by clients.
Majority of the people in our society today are either ignorant or have a misconception of what insurance entails. What role it plays or its usefulness in the promotion of trade and commerce. As a service industry insurance plays a very important role in the economic and social development of a nation. In appreciation of this, the government has continued to take steps to regulate the activities of the insurance business in order to create a sound and efficient insurance market.
Insurance business is one of the subjects that have been securing the public in this country. Many people outside the periphery of the business have looked at the institution with disdain and they are simply suspicious of the insurer and their styles of business. They claim that insurer are only interested in collecting premium and hardly settle claims, whenever they arise.
1.2 Statement of the Problem
The insurance industry is one of the misrepresented businesses in the world today. This is mainly due to lack of knowledge on the part of the public concerning their activities. The degree of knowledge varies from century to century and is relative to the state of socio- economic development in each individual country concerned, which may in turn be governed by the level of the literacy component of each community.
In developing economy, problems association with the misconception of the impact of insurance are not as pronounced as in under developed countries, industry Nigeria. All attempts in developing a sound insurance. Industry have been confronted by market distortions, high race of inflation, various government regulations, unethical practices and fraudulent tendencies of the insuring public there are overwhelming. There is little behavior, which indicates that, the Nigerian public. Literature or otherwise know little or nothing about the operation of the insurance business.
1.3 Research Questions
Consequently, many questions have been asked.
(1) Should, Companies/brokers continue to exploit the general public as a result of their ignorance about the industry?
(2) Is there any need to control the business at all?
(3) What are the control measures?
1.4 Objective of the Study
On a cursory look at the Insurance mechanism, it would be seen that insurance is a service rendering business. There are special social characteristic of insurance that set it apart from tangible goods industries. Being mostly a contact of indemnity and more so that insurance is a commodity, which people pay for in advance and whose benefits are reaped in the future. Furthermore, the objective of the study is to throw light on the activities of the insurance with the view to arousing the awareness of the policyholder and prospective ones. This will be achieved by highlighting the insurance mechanism, discovering the weak areas, that need to be strengthened and recommendation will be proffered for further study.
Also the study is to highlight the fundamental principle of insurance, which the society has not been able to recognize. This work is made in such way as to highlight the need for Insurance in our society. Taking all these into consideration, the following are the objective of this study:
1. The main objective of this study is to outline the functions, roles and contribution of insurance business to the development of the national economy.
2. To identify if insurance business are useful to our day to – day activities and the entire society.
3. To ascertain if insurance business actually perform their financial roles diligently.
4. To suggest way of improving the function of the insurance business.
1.5 Statement of Hypotheses
To establish the fact about insurance business and impact on economic development in Nigeria the following hypothesis have been formulated:
(1) The Insurance business does not play any significant role in the economic growth of anation.
(2) Trade cannot achieve its desired goals in a nation with the aid of insurance business.
(3) People who insure their insurable properties have no advantage over those who do not in terms of losses
1.6 Scope of the Study
The scope of the study has been limited to the insurance companies in
Nigeria. The research work is centered on the impact of insurance companies on economic development in Nigeria and the importance of insurance to individuals. The importance includes the function, benefit of insurance to the society as whole.
1.7 Significance of the Study
The research is done a way that it will contribute to the body of knowledge of Insurance. The research work will help in popularizing the importance of insurance business towards the achievement of the economic a1s of the country. The research work will give the general public the chance to learn about the principle on which insurance business operate and o remove doubt in the mind of the people with regards to the business style of insurance business. Finally, it is hoped that this research work would also make a great Contribution to academic development.
1.8 Limitation of the Study
The problems encountered that limits the success of the project, such as:
Time Factor: There was little time for the researcher to gather all the necessary data required in carrying out this study.
Data Collection Problem: Availability of current and accurate data made things difficult for the researcher.
1.9 Operational Definition of Terms
Risk: This can be said to be anything that occurs to an individual inform of loss something that is unforeseen, which could be detrimental partly or fully.
Fraudulent: This is illegal misappropriation of fund, which is recognized by law.
Inflation: This is where too much money is in circulation.
Distortion: This means the change in dimension of any matter or state of an event.