The Goal Of Effective Management Of Life Assurance In Nigeria Insurance Industry
This research report examines the goal of effective management of life assurance product in Nigeria insurance industry; focusing specifically the Leadway Assurance Plc. The objectives of the study were identified which includes to know the important benefits of life assurance business in Nigerian economy; to evaluate claims procedures in life assurance business; upon these objectives, the research questions were formulated, the significance of the study evaluated and the scope and limitation identified. The literatures relating to the topic under review.
The researcher used both the primary and secondary source as the source of data, the sample and population of study ascertain, questionnaire and oral interview were the major instrument used for data collection. From the analysis and interpretation of the data collected the researcher found out that the image of insurance industry in Nigeria is retarded because of their inability of settle claims promptly and that life assurance helps to reduce the growth level of economic insecurity in the country. Upon the findings and conclusions the researcher recommended that there should be reduction in the level of unethical practice by the insurance practitioners in Nigeria and that the government together with the industry should embark on massive campaign seminar and workshops to educate the public on the important of life assurance product to the economy.
1.1 Background of the Study
The field of insurance has taken a giant leap at the threshold of twentieth century. Insurance has become an integral part of life of man all over the globe. The proverb “used in the mother of invention” is providing equally correct in case of insurance, insurance has already had a considerable impact on many aspects of our society. Claims management in life assurance is another important aspect of insurance. It is complex in nature that is true but it is a driving force to plant confidence in the heart of the insuring public and as well proffer the image growth and development of insurance business in Nigeria.
Claims management in life assurance business is one of the most challenging business process in the insurance industry. For many life assurance companies, claims management is expected to run the claim process efficiently and keep expenses low, but popularities afforded through effective data management in effect, the data captured in the claim process which all too often are under utilized, are rich in variable information for those who know how to extract and analyze it.
Claims management is an expert system which generated the rules and regulations for the assessment of claims using key information contained in medical reports; surveyor report, loss assessor’s reports, claimant’s petition and the procedures or condition and warranties contains in the policy document.
As opined by Dickson (2016), insurance is designed to protect the financial wellbeing of an individual, company or other entity in case of unexpected loss. According to him, some forms of insurance are required by law; while others are optional agreeing to the terms of an insurance policy creates a contract between the insurer and the insured. Thus, insurance acts as a promise of reimbursement in the case of loss, paid to people or company so concerned about hazards they have prepayments to an insurance company (Ajayi, 2002). According to Osoka (1999), the insurance industry is vital to the wellbeing and smooth functioning of a modern economy and as such for developing country like Nigeria; it can also act as a catalyst of economic growth by helping to accelerate the process of qualitative structural transformation. Bowers et al. (1997) views insurance system as a mechanism for reducing the adverse financial impact of random events that prevent fulfillment of reasonable expectations and Osipitan (2009) argues that the insurance business is vital to the financial system due to its role in helping people and businesses to manage their resources and mitigate risk efficiently.
Effective and efficient management of life assurance claims in Nigeria insurance industry will help to reduce the bad conception of the insuring public that insurance is in concept not in practice.
1.2 Statement of Problem
The level of growth and development which should be commensurate with Nigeria’s huge potentials has not been attained and may never be attained since independence (Oluoma, 2010). Thus as opines by Oluoma (2010), several factors have been advocated for this lack of growth of the Nigerian economy and among such notable factors is inadequate funding for investment purposes which have limited insurance penetration in the economy.
The following are the problems that prompted the research of this study;
- Poor management of life assurance claims and expenses in Nigeria insurance industry.
- Delay in settlement of life assurance claims in Nigeria insurance industry.
- The believe that insurance is in concept and not in practice.
- Failure of the public to understand the important benefit of promoting economic business in Nigeria economy.
- Poor knowledge of what life assurance is all about and the term and conditions of life assurance policies in Nigeria.
- Poor image growth and development of life assurance business in Nigeria.
1.3 Objectives of the Study
- To trace the historical development of the life assurance business in Nigeria.
- To know the important benefits of life assurance business in Nigeria economy.
- To evaluate claim procedures in life assurance business.
- To know how life assurance claims are assessed in Nigeria insurance industry.
- To examine the impact of effective management of life assurance claims management in Nigeria insurance industry.
- To examine the problems facing effective and efficient management of life assurance claims in Nigeria insurance industry.
- To make recommendation based on it.
1.4 Research Questions
As a follow-up to the specific objectives of this study, the following research questions emanated. These are:
- Is the image of life assurance business in Nigeria retarded because of poor management of life assurance claims and expenses?
- Are there any important benefits of life assurance business to the Nigerian economy?
- Does Nigerian insurance industry deny settlement of claims?
- Does Nigerian insurance industry delay in settlement of life assurance claims?
- Are there any problems and challenges facing affective and efficient management of life assurance claims in Nigeria insurance industry?
- Are there any impacts of effective and efficient management of life assurance claims in Nigeria insurance industry?
- What are the procedures involved in settlement of life assurance claims in Nigeria insurance industry?
- Does life assurance business help to reduce the level of economic insecurity in Nigeria economy?
1.5 Hypothesis of the Study
To provide answers to the questions highlighted above, the following testable hypothetical statements were considered:
- Ho: Managing life assurance effectively and efficiently will not significantly affect operational process in insurance management
- Ho: Promptness in claims handling processes does not essentially assist in fraud detection and prevention
1.6 Scope of the Study
The scope of the project work is restricted to some selected insurance companies in Lagos. Information were gathered from different insurance companies in Lagos metropolis. Therefore, the information gathered will be used as inference to other insurance and reinsurance companies in Nigeria.
The following are factors that limited this:
1. Sourcing of Data:
Due to the nature of insurance job, it was quite difficult to get the managers and other senior officers to answer our questions and to find information as related to this innovation.
The time given for the project work will too short as other academic works almost cut in time of investigation and data collection.
The researchers experienced inadequate finance in the time of undergoing this research work.
4. Previous Research:
Another fact that limited the study was death of previous research works on the related topics.
1.8 Significance of Study
The project work will be of immense benefit to the followings:
- Students: The study will be useful for academic purpose and it will serve as a date base for students carrying out further research on the related topic.
- Insurance Industry: The study will be useful to insurance companies in Nigeria in the sense that it will help them in their effort to improve in effective and efficient management of life assurance in Nigeria.
- The study will also help to advocate and as well serve as a means of creating more awareness on the important benefit of life assurance in Nigeria economy.
- Researchers: The study will provide some useful information to researchers and will give them the basis for validating or disapproving the findings of the research.
- When the public understand what life assurance is all about and begin to patronize the insurance companies, there will be returnes to the companies who will when pay their taxed and, the country economy will be affected.
1.9 Operational Definition of Terms
The following terms are defined in line with its use in this study.
Life Insurance Penetration:
This is total life insurance premium divided by gross domestic product.
Non-Life insurance Penetration:
This equals total non-life premium divided by gross domestic product.
Total Insurance penetration:
This equals total life and non-life insurance premium divided by gross domestic product.
This equals total premium of insurance of life and non-life insurance divided by total population.
Conclusion, Recommendations and Future Research
This study has been able to confirm the effectiveness, efficiency and promptness of life assurance and claims handling process with the Nigerian insurance industry as a research ground for its empirical assessment. The findings of the study have proven that effective and efficient management of life assurance can further enhance the operational process in insurance business. Rose (2013) affirms that the way an insurance company manages the claims process is fundamental to its profit and long-term sustainability. Capgemini (2011a) opined that highly effective claims practices can be a key contributor to a differentiated customer experience that strengthens customer loyalty and attract new customers, which is especially valuable in a market with little or no growth.
On recommendation, insurance managers should put forward strategic plans to ensuring that insurance claims complaint files are properly kept, monitored and handled for needs that may warrant its usefulness in the future. Secondly, state-of-the-art training mechanism should be put in place to enhance and improve the working pattern of a claim officer which invariably might affect the organizational efficiency of insurance companies. Claims handling procedures should be promptly managed to avoid deficiency in organization’s operational objectives. More so, regulators and other stakeholders within the industry should at regular interval intensify effort to ascertaining the claims handling procedural methods in use by insurance companies in Nigeria; and lastly, Government should ammonize their resources and technical knowhow with the Nigerian insurance industry in ensuring that insurance claims are well designed to curtail fraudulent claims experienced in the past.
5.3 Suggestion for Further Research
This study suggests that future studies should focus efforts at gathering information from the insuring populace as related to customers’ experience of insurance claims in Nigeria. Additionally, the various claims handling modes should be understudied to ascertain their acceptance level among the insurance companies and the use to which they are put. Research efforts could be drawn at designing insurance claims model for addressing the lingering perceived customer image related to insurance fraud in Nigeria. Lastly, future research could also attend to detecting and preventing insurance fraud within the Nigerian insurance industry.
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