A Critical Analysis Of The Impact Of Insurance Industry Towards Economic Development Of Nigeria

Project and Seminar Material for Insurance

A Critical Analysis Of The Impact Of Insurance Industry Towards Economic Development Of Nigeria


Abstract


Evaluation of the impact risk survey in the manufacturing firm in Nigeria. The research was aimed at evaluation the impact of risk survey in manufacturing firms in Nigeria with a case study of Emenite Limited which is the researchers’ topic, objective of this study is to determine how risk managers survey their risk and how it is being control in manufacturing firm, and also these underwriting consideration in risk survey.

The research method used was design in a manner to ensure adequate representation of Emenite Limited in Enugu Research findings established that reduction in the volume of loss and increase in profit maximization are the important of risk survey in the manufacturing firms. Apart form the existing risk control in manufacturing firms, other various new risk controls should be adopted.


Chapter One


Introduction

1.1 Background of the Study

Risk is integral to everyday life. Once we have said that risk is always at the centre of insurance. We should also understand that risk is at the centre of our life. This means that for every human endeavor there is ‘risk’ as a result of our different economic pursuits. According to David (2001) risk exists where the future is unknown. It represents both desirable events and undesirable event. It is a desirable event when one internationally initiates certain things in order to better his socio-economic well being. Because of these desirable and undesirable events, an organization will want to transfer their risk to an instance company, which thereby brings about risk survey.

According to David (1989) the prime object of a risk survey is to provide the underwriter with as complete a picture of the risk being offered as possible; to enable him decide whether the risk was acceptable and how it compared with the same kind and as the basis for deciding premium and other terms.

In the present day the surveyor is still closely concerned with provision of underwriting information and in many situations the information disclosed by the completed proposal form, will need to be supplemented by a surveyors report before the picture is completed. However, the surveyor is now more closely concerned with accident preventions, surveying represents one aspect of the wider subject of risk control. Moreover, practice varies among individual answers and there are no established criteria for surveying manufacturing firms. However, it may safely be stated that risks of unusual character or with special features will normally be surveyed in that firm. A safety or risk audit will be conducted.

A safety audit is a critical examination of an individual operation in its entirely to identify potential hazard and level of risk Audits are often undertaken by multidisciplinary terms individual members should have a good knowledge of legal requirements, an understanding of reasonable practice in the industry and above all the ability to communicate with at levels of personnel or department within the organization. In many companies, this expertise is not readily available and so audits tend to be undertaken by external specialist such as consulting engineers acting independently or employed by insurance companies. In a manufacturing firm like Emenite Limited. Risks that presents a serious injury/hazard are those where there are substantial involvement machinery(s) Reports from the Health and safety executive in Emenite limited however, shows that some 80% of accidents are not caused by machinery but by such simple things as falls, lifting heavy weight or defective hand tools.

Risk survey will thereby go a long way in boosting productivity in manufacturing firm via review of risk and it will also help to facilitate improvement in the work force of the company like Emenite Limited.


1.2 Statement of the Problem

For the purpose of this study, the researcher identified some key factors that will help in identifying the problem.

  1. There are various risk exposures in manufacturing firms
  2. The ways of handling such risk exposures have not been encouraging.
  3. Risk surveyors in manufacturing firms have not been living up to their expectations.
  4. There have been lots of bottlenecks in implementing the preferred recommendations.
  5. To know the role of surveys in identifying such risk and controlling the effects of the operation of manufacturing firms in Nigeria.

1.3 Objectives of the Study

  1. To find out the various risk exposure in manufacturing firms in Nigeria
  2. To find out various ways of handling such risks exposures in manufacturing firms.
  3. To find out the problems facing the insurance companies on identifying such risk exposures in manufacturing firms.
  4. To know the role of risk survey in manufacturing firms
  5. To make recommendations on how to improve the manufacturing firms through adequate risk survey tools by the insurance industry.

1.4 Research Hypotheses

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

  1. H0: there are no problems facing the insurance companies on identifying such risk exposures in manufacturing firms.
    H1: there are problems facing the insurance companies on identifying such risk exposures in manufacturing firms.
  2. H02there is no role of risk survey in manufacturing firms
    H2there is role of risk survey in manufacturing firms

1.5 Significance of the Study

This research work will be of immense help to:

The student:

It will help the researcher to know more on the impact of insurance industry towards economic development of Nigeria.

The Stake holders:

This study will be of great importance to stake holders as it will enrich their knowledge on the various risk in manufacturing firms.

Insurance company:

This will equally be of help to the insurance companies and financial institutions in Nigeria because when they abide by the recommendations provided by the researcher it will help them in time of decision making.


1.6 Scope and Limitation of the Study

The scope of the study covers critical analysis of the impact of insurance industry towards economic development of Nigeria. The researcher encounters some constrain which limited the scope of the study;

a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study

b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

c) Organizational Privacy:

Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities.


1.7 Definition of Terms

Insurance Industry:

Insurance is a means of protection from financial loss. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss

Economic Development:

Economic development is the process by which a nation improves the economic, political, and social well-being of its people. The term has been used frequently by economists, politicians, and others in the 20th and 21st centuries


1.8 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows

  1. Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
  2. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
  3. Chapter three deals on the research design and methodology adopted in the study.
  4. Chapter four concentrate on the data collection and analysis and presentation of finding.
  5. Chapter five gives summary, conclusion, and recommendations made of the study

Chapter Five


Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was critical analysis of the impact of insurance industry towards economic development of Nigeria. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of impact of insurance industry towards economic development of Nigeria


5.2 Summary

This study was on critical analysis of the impact of insurance industry towards economic development of Nigeria. Five objectives were raised which included:To find out the various risk exposure in manufacturing firms in Nigeria, to find out various ways of handling such risks exposures in manufacturing firms, to find out the problems facing the insurance companies on identifying such risk exposures in manufacturing firms, to know the role of risk survey in manufacturing firms, to make recommendations on how to improve the manufacturing firms through adequate risk survey tools by the insurance industry. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of Emenite limited, Enugu state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made processing engineers,electricians, senior staff and junior staff were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies


5.3 Conclusion

Insurance is one of the cornerstones of modern day financial services sector. In addition to its traditional role of managing risk, insurance market activity, both as intermediary and as provider of risk transfer and indemnification, may promote growth by allowing different risks to be managed more efficiently through promoting long term savings, encouraging the accumulation of capital, serving as a conduit pipe to channeling funds from policy holders to investment opportunities as well as mobilizing domestic savings into productive investment. Insurance is an indispensable aspect of a nation’s financial system and theoretical conceptions explain that financial systems influence savings and investment decisions through lowering the costs of researching potential investments, exerting corporate governance, trading, diversification and management of risk, mobilization and pooling of savings, conducting exchange of goods and services and mitigating the negative consequences that random shocks can have on the economy. However, the level of insurance market activity which should be commensurate with Nigeria’s huge potentials has not been attained. Insurance by reducing uncertainty and volatility smoothen the economic cycle and reduce the impact of crisis situations on the micro and macro level. But, the demand for protection against losses of life, property caused by natural disaster, crime, violence, accidents, fire etc are not so demanded in Nigeria. It is against the foregoing that this study was undertaken to explore the impact of insurance market activity on economic growth in Nigeria. The result emanating from the hypotheses tested indicates that insurance market activity had positive impact on economic growth in Nigeria, implying that the insurance sector of Nigeria has assisted in influencing savings and investment decisions and hence long-run growth rates through lowering the costs of researching potential investments, exerting corporate governance, trading, diversification, and management of risk, mobilization and pooling of savings, conducting exchanges of goods and services, and mitigating the negative consequences that random shocks can have on capital investment thereby enhancing the growth of the Nigerian economy.


5.4 Recommendation

This study recommends amongst others that:

  1. Life insurance is a way of dealing with risk and a saving medium for consumers. It also plays important psychological and social roles. The major function of life insurance is to protect against financial loss from loss of human life. Life insurance is therefore developed on the concept of human life value as well as a means of savings for the policyholder. Thus, we recommend stronger government policies. Government agencies like National Insurance Commission (NAICOM) and National Pension Commission (PENCOM) should strictly enforce the implementation of compulsory group life insurance cover under the Pension Reform Act, 2004. Also life insurance companies should introduce life products particularly within the low income earners as the target which will enhance penetration and deepen the market. It will also be necessary to develop products that will optimize both investment returns to policy holders and financial protection to their dependants. This will assist in enhancing savings habit of Nigerians thereby increasing the quantum of funds available for investment into the real sectors of the Nigerian economy.
  2. The availability of insurance services is essential for the stability of the economy and can make the business participants accept aggravated risks. By accepting claims, insurance companies also have to pool premiums and form reserve funds. Thus, this study recommends an increased diversification of insurance products especially in the non-life business. The insurers should come up with new non-life products and a modification of existing insurance products, thus availing customers the opportunity of choosing from a variety of products. There is also need for the insurance companies to take advantage of the non-life insurance products made compulsory by law to substantially increase their premium income and deepen insurance penetration.

Project Material Download

5,000 5000

The Complete Material Will Be Sent to You in Just 2 Steps

Quick & Simple…


Step One Purchase

Make Payment (Through Transfer) of ₦5,000 to Any of the Account Below

Access Bank PlcAcc No: 0811003731
Samphina Academy
Current Account
Zenith BankAcc No: 1225513212
Samphina Academy
Current Account
PalmPay Main LogoAcc No: 8143831497
Samphina Academy
Digital Account

Or CLICK HERE To Pay With Debit Card


FOR STUDENTS OUTSIDE NIGERIA
CLICK HERE To Purchase Material ($15)
FOR GHANIAN STUDENTS
Make Payment of 120 GHS to 0553978005 | Douglas Cloud Osabutey | MTN MoMo

Step Two Purchase

Send the Following Details on WhatsApp ( 08143831497) After Payment

  1. Payment Details

  2. TOPIC: A Critical Analysis Of The Impact Of Insurance Industry Towards Economic Development Of Nigeria

The Complete Material Will Be Sent To You On WhatsApp After Receiving Your Details
T & C Apply


  Contact Our Help Desk


Need a Different Topic? Perform a Quick Search



List of Related Works

Click on Any Topic to Preview the Content

samphina.academy

Samphina Academy

Samphina Academy is an Online Educational Resource Center that is aimed at providing students with quality information and materials to aid them in succeeding in their academic pursuit.