The Impact Of Motor Insurance Policy On The Growth And Development Of The Economy (A Study Of NICON Insurance)
This research work titled “The impact of motor insurance policy on the growth and development of the economy” Nigeria motorist are not embracing motor insurance policies and one of the objectives are to know why Nigeria motorist embrace motor insurance policies, and the scope of the study is NICON insurance motor Department, The information for the study was collected using primary and secondary methods of data collection.
For the primary data collection, questionnaires, personal observations and oral interviews were used while existing literature relevant to the topic was consulted for the secondary data. The researcher used chi-square statistical model to analyze the data. The researcher gave a summary of the findings that Nigeria motorist are not embracing motor insurance policies and one of the recommendation is that people should know the reason why they are not aware of the compensation in motor insurance policies.
1.1 Background of the Study
Before now, motorist, were at liberty to drive their cars on the public highways without any form of insurance. However, as the number of cars multiply on the highways rate of accident injured and death also multiple. Hence, the need for motor insurance.
The first country that gave a lead in this direction was the great Britain. Other countries have the Traffic Act at 1930, introduced a compulsory insurance. The Act made it an offence for anyone to use or permit the use of a meter vehicle on a read unless there is in force a policy of insurance covering the liability of the motorist against death or motor accident.
The idea of compulsory insurance was recognized quite early in west Africa and British legislation on the subject was extended to the four west African British colonies, Nigeria, Gold Coast, Sierra Leone and Gambia, each of these territories now has it own specific legislation on this subject.
Modern insurance was introduced in Nigeria by European trading companies which establish trading post in Nigeria and their companies were appointed agent for insurance business by British companies in London Later, Nigeria traders and merchant of substantial status where given power to secure insurance business issues cover meters mostly on cargo and assistance in settlement of claim.
As a result of this progress, Royal exchange Assurance branch office was established in Nigeria in the year 1921 and this company dominated insurance business for almost thirty years before the establishment of other companies such as provincial insurance company, nor which union, fire insurance company and Nigeria General insurance company limited to mention but a few – the incorporation of Nigeria into the Board Traffic Act by the British Parharment in 1945 imposed a statutory obligation on the users of motor vehicle to provide security against their legal liability for causing death of or bodily injury to the third parties.
Thus, the study is meant to evaluate the impact of motor insurance policies on the growth and development of the economy. Looking of NICON insurance company as a study.
1.2 Statement of the Problems
- Nigerian motorist are not embracing motor insurance policies.
- People are not aware of the compensation in motor insurance policies.
- Nigerian motor and third parties have not actually felt the impact motor insurance policies.
1.3 Objective of the Study
The following are the objective of the study.
- To know why Nigeria motorist embraced motor insurance policies.
- To create awareness of the compensation motor insurance policies.
- To ensure that the Nigeria motorist and third parties actually felt impact of motor insurance policies.
1.4 Research Question
- Have Nigeria motorist been embracing motor insurance policies.
- Are people aware of the compensation on motor policies.
- Have Nigeria motorist and third parties actually felt the impact of motor insurance policies.
1.5 Research Hypothesis
H0: Nigeria motorist have not been embracing motor insurance policies
H1: Nigeria motorist havebeen embracing motor insurance policies
H02: Motor insurance policies do not have any impact on Nigerian motorist and third parties
H2: Motor insurance policies do have impact on Nigerian motorist and third parties
1.6 Significance Of The Study
It is believed that at the at the completion of the study, the findings will be of great importance to the management of NICON insurance, as the findings will guide them on the benefit of sanitizing the public on the need to subscribed to an insurance cover especially motor insurance policy, the study will also be useful to the motorist as the study seek to educate the motorist on the tremendous benefit of motor insurance policy the study will be useful to researchers who intends to embark on a study in a similar topic, as the study will serve as a reference point, finally the study will be useful to the students, teachers, lecturers, academia’s and the general public as the findings will add to the pool of existing literature.
1.7 Scope And Limitation Of The Study
The scope of the study covers the impact of motor insurance policy on the growth and development of the economy, with emphasis on Nicon insurance. But in the cause of the study, there were some factors 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
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
1.8 Operational Definition Of Terms
In insurance, the insurance policy is a contract between the insurer and the insured, known as the policyholder, which determines the claims which the insurer is legally required to pay
Vehicle insurance (also known as car insurance, motor insurance or auto insurance) is insurance for cars, trucks, motorcycles, and other road vehicles. Its primary use is to provide financial protection against physical damage or bodily injury resulting from traffic collisions and against liability that could also arise there from.
Economic growth is the increase in the inflation-adjusted market value of the goods and services produced by an economy over time.
1.8 Organization Of The Study
This research work is organized in five chapters, for easy understanding, as follows
- 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.
- Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
- Chapter three deals on the research design and methodology adopted in the study.
- Chapter four concentrate on the data collection and analysis and presentation of finding.
- Chapter five gives summary, conclusion, and recommendations made of the study
Summary, Conclusion And Recommendation
It is important to ascertain that the objective of this study was to ascertain the impact of motor insurance policy on the growth and development of the economy.
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 motor insurance policy and Nigeria’s economic growth.
Modifying the fixed-effect model of Marijuana et al. (2009) and co-integration estimation technique, we examined the impact of motor insurance policy on the growth and development of Nigeria’s economy, number of insurance companies as well as total insurance Investment in addition to a control variable of inflation rate contribute to economic growth of Nigeria using a range of time. According to the results, insurance sector development promotes economic growth of Nigeria. Thus, function of insurance companies – providing means of risk management and performing mobilization and allocation of resources (Marijuana et al., 2009) – are important for economic growth. As increase in number of insurance companies contribute to economic growth according to the result, it is suggestive for insurance sector policy maker to implement the policies that are going to provide more insurance companies with high competitive mind and increasing efficiency in the insurance industry.
This study has succeeded in establishing that a direct or positive relationship exists between investment in motor insurance and economic growth in Nigeria. This means that building a formidable insurance industry in the country would immensely boost the country’s economic growth. Consequently, the federal government should use policy actions to protect both the insurers and the insured in the country; encourage people to patronize insurance companies as well as encourage insurance companies to always pay genuine claims promptly at the occurrence of the event insured against. This will encourage more people to buy insurance, thereby increase premium income and provide investible funds which can be directed into lucrative investments for increased capital formation and productivity.
Haven completed the study, the researcher recommends that adequate regulation should be targeted at providing institutional improvements, especially in risk management and product development of insurance companies. The causal relationship between economic growth and insurance development of Nigeria is limited and not direct. This is because the influence of insurance market development in performing the role of intermediation is tempered by some negative factors in Nigeria. These factors can be identified as low per capita income, lack of orientation of the importance of insurance, cultural values undermining the popularity of insurance and adequate regulatory framework for insurance industry in Nigeria.
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