This study attempt to provide a general
information and knowledge about the impact of insurance companies in the
business world. A case study of business organization in Benin City. The scope
of the research is based on principally on their (insurers) impact o
businessmen, individual and business world. There are set down objectives for
this study, and to achieve those, set down objectives questionnaires and oral
interview and retrieving of some secondary data from books, journals,
newspapers, to collect useful information was undertaken. The data were
analyzed and findings were made which revealed that the Nigeria insurance
company has failed the Nigeria populace in terms of the provision of the
insurance services. Some of such failures are non-payment or settlement of
claims by capitalizing on the ignorance of their legal right and genuine
development and expansion of business forms. Also from the findings, policy
recommendations were made to insurance companies so as to regain their public
fast fading confidence on them.
Background of the study
Statement of the problems
Purpose of the study
Significance of the study
Scope of the study
Limitation of the study
Population of the study
Sample of the study
Validation of instrument
Method of data collection
Method of data analysis
Discussion of results
Summary and conclusions
Insurance in its modern form was first introduced into Nigeria by the British
long before the arrival of the British a lot of organized trading activities
was going on in the Nigeria territory, but there was no organized insurance
business, as we know it today. The first insurance company to have a full
branch office in Nigeria was the Royal Exchange Assurance. It opened, its first
office in Lagos in 1921 and until 1949 it practically dominated insurance
business in the country. Therefore, there was high degrees of awareness of the
importance of insurance services to the economic growth and business world
particularly in Edo State and Nigeria in general. At the end of 1989 to 1998,
insurance companies were operating as registered companies in Nigeria and most
are indigenous. The leading indigenes insurance company in Nigeria is the
National Insurance Cooperation of Nigeria (NICON) which is fully owned by the
Federal Government of Nigeria which underwrites about 25% of the total
insurance business in Nigeria.
Some of the objectives of the company is to encourage commercial houses,
cooperation’s and companies to go into ventures by giving them cover against
possible losses. It also encourages the spirit of savings by way of life
assurance which provides benefits for the dependent, in case of untimely death
of the assured. The board is run by experienced men and a set of businessmen
and it headed by a chairman. The management of the company is completely
Nigerianised (i.e. Nigerians) as mentioned before. The chief executive is the
general manager who directly responsible to the board of directors. He
supervised day-to-day running of the company and he is assisted by experienced
and able senior management staffs who are in charge of finance, administration,
life and pension and technical department. This was however, attributed to
government stringent economic measure and poor economic situations of the
country. According to the insurance Act of 1976, insurance in Nigeria is
divided into two main classes. Thus life assurance and non-life insurance.
A. Life Assurance
Whole life assurance
Children education and assurance
Group business protection
B. Non-Life Insurance
Burglary house breaking
BACKGROUND STUDY OF BENIN CITY AND BUSINESS IN BENIN CITY
The emerged of insurance company in Edo State can be traced to 1968 when the
first branch of UNIC insurance company opened in Benin City. This awareness
brought a boom to the insurance industry. It was during this period of boom in
the insurance company that UNIC insurance company limited came into existence
in Benin City. One of the main objective of the UNIC insurance company is to
increase investment and better public awareness of the benefit of insurance to
society at large. In the first two years of its inception the UNIC insurance
company incurred net losses of N10, 000 and N54, 000 respectively of course,
this was the formative years, then followed a period of modest growth and
success during which profit were recorded. But between 1989 and 1991, there was
a succession of high loss margin. This was however attributed to government
stringent economic measures and poor economic situation of the country.
However, UNIC insurance company offers all types of insurance protection. Some
of the demerit of the UNIC insurance company is that poor public awareness regarding
the principle of insurance has not helped, and even among those Nigerians that
do know the benefits of insurance cover, there remains a widespread perception
that Nigerian insurance are reluctant to settle claims.
1.3 STATEMENT OF THE PROBLEM
Nigeria insurance company has been described as undeveloped when compare with
those in the developed countries. For some time now. Nigeria insurance company
has be subjected to explosive criticism from economic, commercial educationist,
even professionals in insurance field etc. so, many accusation have been levied
against the insurance companies. The most common of such criticism is the one
which relates to settlement of claims majority of the insurance companies
customers and non-customers alike have been feeling dissatisfied about
settlement of claims as many of them would say. When it comes to their
(insurer) turn to pay claims, they will flimsy excuses.
OBJECTIVES OF THE STUDY
fundamental and cardinal objectives of this study are to critically examine and
determine the impact of insurance companies in the business world. The broader
objectives of the study could be summarized as follows;
The probable impact of insurance companies constriction, in term of stimulation
of business activities among the people of the nation.
The degree with which fear of risk has been removed from the minds of investor
in the economy.
The determination of economic situation or atmosphere, of the contribution of
insurance companies had created in the business economy.
The probable impacts of insurance companies on investment in the nation.
The degree with which the economic activities of businesses are accelerated
through insurance companies.
Finally, possible ways in which the insurance companies have contributed to
economic development of business world.
1.5 PURPOSE OF THE STUDY
purpose of the study is multi-dimensional. Its importance cannot be
overemphasized. The insurance companies play an important role in the growth
and development of the nation economy. The researchers purpose to this study
therefore are summarized under the following headings;
1. To help clarify some
misconception about the operation of the insurance companies, such
misconception include non-payment of claims by insurers: pool of thieves etc
will be clarified.
2. To identify and examine the ways
in which insurance companies create in individual the sense of thrift that is
how insurance practice help create in an individual the sense of thrift by
saving through easy monthly installments.
3. To examine the willingness or
unwillingness of business establishment in taking insurance policies. The
various businessmen and individual are willing to take cover in any of the
insurance policies and why some other firms and individuals do not want to take
4. To critically examine the
contribution/impart of insurance companies to the economic development of
business in Benin City, that is how they contribute to t he achievement of
basic economic goals.
5. To examine how the insurers collect
into pool the otherwise, uninvestable individual contribution, which provide a
regular source of investment loan in the economy. Among income earners, only a
few have small proportion of their disposable income as savings. This small
amount which cannot be used for any meaningful investment project, can be saved
through insurance contract or policy. This small amount of money from many
insurance policy holders are pooled together which form a pool of investment
1.6 SCOPE OF THE STUDY
The scope of the study is limited to the impact of insurance companies in the
business world especially in Edo State. Also, since Edo State is a very large
state with local government areas, the researcher confined herself to Benin
City, being the capital and a true representation of the whole state.
Furthermore, since there is a large number of insurance companies in Benin
City, a sample number of two insurance companies operating in the state capital
we be chosen for source of data collection.
1.7 DEFINITION OF TERMS
This sub-section becomes imperative due to usage of technical terms or words
that are either unfamiliar or are capable of having more than one meaning. The
following under listed terms are given working definition.
defined as a contract whereby a person called the insurer or assurer, agrees in
consideration of money paid to him, called the premium, by another person,
called the insured or assured, to indemnify the latter against loss resulting
to him on the happening of certain events.
Generally, risk has to do with the occurs because of variation in outcomes or
results. Uncertainty rather than certainly characterizes risks unpredictability
not knowing, rather than knowing. All these are what individual has to face in
his everyday endeavour as he pursues his source of livelihood.
Policy: This is a written statement of the terms and condition of
a contract of agreement between the insured and insurer taking the actual
Premium: This is the amount paid by the assured or insured to the
insurance company either monthly, quarterly, or yearly in respect of an
undertaking to cover the against some specified uncertain risk.
Whole life assurance: This is suitable for those who want to provide
for their dependants in the event of their death. Premiums are payable through
the life of the assured.
Assurance: This is a variation in whole life assurance which is
the cheapest way of insuring oneself as this given cover only for a stated
number of years and nothing is paid out as claims if you live any longer.
Perils: These are regarded as the course of the risk, common
examples of perils include fire, accident, theft, earthquakes, winds storm and
hundred of other causes of uncertainty.
Hazard: These are the various acts or conditions, which increase
the livelihood or severity of a loss.
Losses: The end result of risk is an economic loss, which usually
Annuities: This is a method by which a person can receive yearly
sum of money.
Fidelity: This is a policy aimed at protecting an employer against
misappropriation of funds or embezzlement of employee appointed to a position
of trust in which he may have been opportune to embezzle the company’s money.
Policy Form: After a contract has been made between the proposers
and insurer, it is then recorded in a document called a policy.
Cover Note: Temporary insurance cover to enable the insured to
enjoy the benefit of a policy while it is being prepared.
Reinsurer: This is a company which accepts part of the insurance
risk underwritten by another insurer with the public.
STRUCTURE OF THE STUDY
The study has been designed to accommodate five chapters. There is the
introductory chapter which takes on overviews of the study with the statement,
objectives, purpose, scope, limitations; definitions of terms and background
study of Benin City was clearly spell tout.
The second chapter laid down literature review and principles of insurance
operation, while chapter three laid more emphasis on methodology. The
presentation and analysis of data result is done in chapter four. Summary
policy recommendations and conclusion were rendered in the final chapter.
TERMS AND CONDITIONS APPLY
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