ROLE OF INSURANCE COMPANIES IN NIGERIA ECONOMIC DEVELOPMENT
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ROLE OF INSURANCE COMPANIES IN NIGERIA ECONOMIC DEVELOPMENT
ABSTRACT OF INSURANCE COMPANIES’ ROLE IN NIGERIA’S ECONOMIC DEVELOPMENT
This study is about the role of insurance companies in the economic development of Nigeria. According to all indications, the insurance industry is critical to Nigeria’s economic development as well as the problem of risk management in Nigeria.
It is obvious that the majority of the public who are unaware of the contributions made by the insurance industry have more faith in banking and other financial institutions,
but these people forget that the banking institutions recognise the fact that insurance companies contribute significantly to the development of the nation’s economy.
The second chapter is a survey of related publications, the most prominent of which were the extended family system, the age grade association, and the provision of some type of insurance coverage to its members, particularly during difficult times.
As this project is based solely on secondary data, the third chapter includes a research design and methodology. And chapter four contains the research findings, which show that insurance firms are settling more loss claims than ever before.
The fifth chapter is the conclusion and recommendation.
INTRODUCTION TO CHAPTER ONE OF THE ROLE OF INSURANCE COMPANIES IN NIGERIA’S ECONOMIC DEVELOPMENT THE STUDY’S HISTORY
Insurance has been defined as an economic device in which risk of people and economic enterprises is transformed from an individual to a group. In the process, the individual pays a fee known as the premium to the group for the assumption of risk.
As evidence of the risk assumption contract, the group issues a document known as the insurance policy. To the individual, the amount of the fee paid to the group by the policy holder constitutions the fund or pools from which individual members of the group’s losses are compensated. The group is known as the insurance, while the person is known as the insured.
According to all indications, the insurance industry is critical to Nigeria’s economic development as well as the problem of risk management in Nigeria.
The bulk of the public, who are unaware of the contributions provided by the insurance industry, clearly has more faith in the banking or other financial institutions.
However, these people fail to grasp that the banking institution recognises that insurance firms contribute greatly to the development of the nation’s economy. This is why loans were obtained from them.
The establishment of the NDIC to help reduce the rate of bank distress is another move to show that the role of insurance is very important to economic development.
Since then, the government has recognised the importance of insurance institutions in risk management and development. As a result of these, the Nigerian government has made certain insurance plans mandatory.
As evidenced by several insurance policies. Acts that every or any motor owner must have one of the different insurance covers available in the country for car insurance. The government had also mandated that all of her large buildings be fire-proofed.
As a result, the role of the insurance institution in the economic development of the nation will be emphasised in this study within the scope and unit of information within my reach.
1.2 STATEMENT OF THE PROBLEM
THE PROBLEM OF INSURANCE COMPANIES IN NIGERIA.
Here!? I’d want to have a general conversation about various issues that prevent insurance companies from fulfilling their mission of economic development. Among these issues are the following:
PROBLEM OF SOCIO-ECONOMIC. Religions beliefs, cultural background low, economic income pretend for ostentations living to thrift,
and level of development are some socio-economic elements that commonly determine Nigeria’s attitude towards insurance. In fact, “some cultures, for example, view life policy as inhuman, so some Muslims have manifested strong religion entergenusm to life assurance.”
Finally, at our current level of development, there is minimal personal wealth on which insurance may be secured, and because most people are living “hand to mouth,” insurance receives less attention. All of this contributes to the larger issue of Nigerians’ negative attitude towards insurance.
TECHNICAL ISSUE
Technical issues in insurance include those relating to people, education, and a low capital basis. Anybody who knows anything about insurance will tell you that the main problem with insurance is a shortage of technically trained staff.
Initially. People were uninterested in taking insurance jobs, and those who did take them were undereducated in the subject. The situation was exacerbated by the lack of a centrally organised training strategy for the staff.
As a result of insufficient premium collection, the industry’s offerings fall short of expectations. Inadequate claim settlement and a lack of trustworthy statistics.
Many people enter the insurance business through the back door, without first meeting the capital and other requirements. As a result, when they are dealt a bad economic hand, failure becomes theirs.
PROBLEMS WITH LEGISLATION
This is essentially the restriction put on the insurance business by Section 18 of the Insurance Decree of 1976. The restriction is problematic because, while investment is restricted to public firms with paid-up capital of at least one million naira, non-quoted public corporations are barred from participating in insurance discovery.
Because most indigenous Nigerian companies are not silenced, as they may stand, and because some vast multi-million naira companies remain private, their securities are outside the scope of insurance venture capital.
Because the number of quoted companies is still very small, this restriction on the scope of insurance investment is a constraint on option investment decisions and may reduce income and grant in the industry by lowering the outlook for insurance find to achieve maximum value.
1.3 PURPOSE AND OBJECTIVE OF STUDY
There are numerous insurance objectives, which include:
I. First and foremost, it guarantees that the insured will be indemnified (compensated) if the insured risk occurs.
II. Without an institution like insurance that closely follows trade and commerce and lends a helping hand in times of hardship, the international economic system would undoubtedly grind to a halt.
III. Insurance company investment helps to finance new projects, resulting in more work prospects for job seekers and increased national income.
1.4 SIGNIFICANCE OF THE STUDY
IMPORTANCE OF INCLUDING INSURANCE IN NATIONAL DEVELOPMENT PROGRAMMES
This country belongs to all of us, and we must all work together to save it. It was put together in a common slogon by the former head of state general……………………….. (RTD), but how can one salvage the economy of a place where he does not know how policies that directly affect him are received at dictatorship is the bone of human initiative?
When the government engages in important economic discussions, insurance companies are frequently excluded. As a result, the industry fails to play its role in economic development. Because they do not participate in government decisions, even in areas where they may fit in well.
As a result, I propose that the insurance industry, through the Nigeria Insurance Association (NIA), participate in national development plans. This will undoubtedly raise the national level of development.
THE DEFINITION OF TERMS
Insurance is defined as a risk-mitigation strategy. A type of insurance is any device that reduces the likelihood of a risk occurring, and when it does occur, reduces the extent of the damage and compensates those affected.
The basic fundamental of insurance is that insurance, as a modern concept for solving risk-related problems, relies on the cooperation of a larger number of people for its success.
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