Unpopularity Of Modern Insurance In Nigeria

Project and Seminar Material for Insurance

Unpopularity Of Modern Insurance In Nigeria


Abstract


The aim of this project is to bring out the reason why modern insurance is unpopular in eastern part of Nigeria a case study of Enugu states.

Insurance plays a vital role in the economy but the eastern parts is yet to be insurance conscious. Chapter one of this work will deal with the introduction of the study, background of study statement of problems objective study, limitation of study and definite of term

Chapter Two literature review, and bring out more details bout the reason for unpopularity of modern insurance in Eastern State


Chapter One


Introduction

Background Of Study

There is a saying that in every country, their fire wood cook their meal. This aphorism is true of insurance, which started in various countries in diverse ways. However, industrial revolution development in science, and technology have let to people seeking better and more efficient ways of doing things

Some of these early forms of insurance practice like bottomry or respondent a bonds, craft guilds, sharing of goods amongst many vessel sailing down yantez River, issue, social clubs, Town unions and communal self- help programmes have metamorphosed into modern insurance practice

Bottomry bond was the granting of a loan on the security of vessel on the understanding that the loan was not repayable, if the vessel did not survive the voyage. Respondent a bond was almost the some thing with bottomry bound except that cargo was pledged to secure the lone. The interest represents the premium for covering the risk borne by the lender

Modern insurance as a means of risk management device is the central to the economic well- being of man. It is also endemic in any society as ways of turning for the betterment of financial consequence of misfortunes have been engaging the attention of man at every age.

Before the arrival of the British merchant Nigerian, there was no organized insurance business as we know it today . there existed some traditional systems of risk sharking like crude or primitive forms of mutual and social insurance schemes. The extended family system, age grade association, town or clan unions were some mutual insurance like schemes for showing benevolence to their member who had sufferer some misfortunes such as death, illness. Fire ravages or court cases.

Both the extended family extended family system and clan unions still exist in Nigerian today, but most of their insurance functions has been taken over by an organized insurance system. It was the British merchants who established the trading posts on the west coast of Africa that introduced modern insurance business in Nigeria in the late 19th century. They arranged insurance for their trading concerns on the London insurance market. As early as 1900s at least two insurance companies were know to have appointed agent in Nigeria.

Royal Exchange Assurance company appointed a resident official in Lagos in 1921. Thus they became first insurance company to commence full –scale insurance operation in Nigeria until when three other British insurance companies were established. The state of insurance industry in Nigeria should largely be a function of the state of nation economy.

The how level of awareness of insurance can be readily perceived from student

The success of insurance depends on the co-operation of a large number of people. modern insurance operation involves payment of assessed contribution known as premium, by the person wishing to insurance known as the insurance or policyholders .


1.2 Statement Of Problems

The problem of unpopularity of modern insurance in Eastern parts of Nigeria is associated by the fact that people were not aware of modern insurance services, they still believe in traditional system of insurance which the finds more convenient than modern insurance system. They remain unsatisfied with the service rendered by most insurance firms

Also some people sees insurance services as a malicious act (419) this was due to the attitude of the insurance to the policyholder at the time of claim the find one reason or the other why they should not compensate the claimant.

Another reason that contributes to unpopularity of modern insurance is the view of eastners about insurance. services, modern insurance service is a contract that pays at the time of loss or damages, in a situation whereby there is no loss or damage they will not compensate the policyholder for this reason some people prefer buying share from a financial institution like banks to buying insurance products.

1.3 Objective Of Study

This project work is taken to discover the following

  1. The causes of distrust on modern insurance service in Enugu state
  2. To reveal those factors that hinder the growth of insurance in Enugu state.
  3. To bring to light those factors which aided the development of insurance in the western states.
  4. To let the public know more about insurance .
  5. To satisfy the requirements for the award of national diploma in insurance.

Significance Of Study

This research work bases it significance on the following.

  1. To formulate and suggest ways of handling the better image of insurance in Enugu state.
  2. To understand the Nigeria economy and insurance companies performance.
  3. To let the public and insurance companies in Enugu state to know that modern insurance service is not popular unlike in Lagos state.
  4. To view the Nigeria economy and the insurance companies performance. More insurance conscious than the eastern Estates.

Limitations And Scope

The research is a student and is still faced with classroom work in this effect the researcher failed to devote her full time for research work.

Financial incapability is another constrain of which much could not be done because of the huge financial involvement therefore the research work is limited to Enugu urban.


Definition Of Term

Insurable interest

This is the financial involvement between the policyholder and the subject matter of insurance whereby he stands to gain if the subject matter is not destroyed and is prejudiced if destroyed

Premium

this is the price or monetary consideration passing from the insured to the insurance for their undertaking to pay the sum insured in the event of the risk insured against .

Indemnification

This is putting the insured back in the same financial position he was immediately before the loss.

Subject matter

This is the item for insurance

Underwriting

This means assessment of a risk to know whether to accept the risk or decline if to accept at what rate of premium.

Catastrophe

This is huge loss that is capable of damaging the existence of an insurance company.

Merger

This is the coming together of too difference companies to form a single unit company.

Insurance market

This is the market for the sales and purchases of insurance policies.

Broker

This is an insurance intermediary who brings the buyers and seller of insurance product together

Underwriter

The person that assesses risk in insurance companies.

Arbitration

This is the settlement of dispute out of count by appointing an independent body to look at the matter and given it decision .

Jeticism:

This means throwing away some cargo in order to save a vessel from sinking.

Proposal form

This is a document, which contains all the required information relating to the subject matter of insurance.

Proposer

This is one who comes to an insurance company for one or more insurance policies.

Cargo

This refers to the goods carried by the vessel

Warranty

This is a promise usually made by the insured to the underwriter which usually limply the improvement and maintance of the risk.

Subrogation.

This is the right of a person who has hadminitied another under a Legal obligation to stand in the place of the other person and avail himself of all the rights and remedies available to that other person whether already enforced or not.

General Average

All losses which rises in consequence of extraordinary sacrifices made or expenses incurren for the preservation of the ship and cargo


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