EFFECTIVE RISK MANAGEMENT: A TOOL FOR SUSTAINABLE ECONOMY (A CASE STUDY OF ANCHOR INSURANCE COMPANY LIMITED, UYO, AKWA IBOM STATE)

EFFECTIVE RISK MANAGEMENT: A TOOL FOR SUSTAINABLE ECONOMY (A CASE STUDY OF ANCHOR INSURANCE COMPANY LIMITED, UYO, AKWA IBOM STATE)

CHAPTER ONE

1.0     Introduction

In many undertaking and many things individual own, risks normally occur either in one way or the other and the risk bearer will feel a greater pain’s for the lost incurred by him or her. Over the years, man sought they ways by controlling the risk effectively to which mankind business ventures are exposed.  However, only in the last twenty years has risks management emerged as district subject and as a aim of practical management in it’s own right, effective risk management has been a tool, technique for sustainable economy, it bring together idea and technique drawn from many disciplines in order to provide sound conceptual foundation and a set of tools for the analysis and control of risk. The reasons for this include the fear that some insurance industries may not be able to settle claims and also meeting their obligation to customers.

The new ideas are being brought to bear and new theories are being developed. Risk in this content refers to factors, event and parameter that determine the prospect of some lose which are capable of being expressed in financial term. It is also developed and defined to facilitate the process of risk identification, evaluation as well as adoption of the most practical and cost effective means of control in the insurance industry. The effective risk management that transcends insurance becomes insured as risk management transfer mechanism provides a lot of risk management sluices. Risk itself is at the centre of life as a result of which many people from different work of life one concerned, economist, doctors, engineers and lawyers in all have interest in the risk management concept. Insurance is another division of financial institution apart from bank that are carrying out commercial activities, insurance is being regarded as a “pool of risk” because even if premium is collected they in turned use in payment of compensation to the insured and that the common people, most people fell that some class of insurance company are not necessary and may turned out to be wasteful in the long run, the sense that if the risk insured against does not occur the premium which is continuously paid insured will be lost.

• Statement of the Problem

Many at times people also do not really know the duties and benefit of insurance business in Nigeria and as such they have developed adverse opinion which have evolved into wrong response toward the business it seems as people have been virtually forced to undertake insurance cover against future risk.  Insurance has emerged often as a response to some problem forced by the society and it is important to mention the insurance as a means of risk control is not new in Nigeria.

Before the introduction of Anchor insurance policy scheme into the country, other forms of insurance contribution immensely to the success of Nigeria in the business, insurance context has come to regarded as the pillar of economic structure of modern society, undoubtedly, the insurance against have been promoting the cause of insurance policy. Enough have been said to show that insurance with its contribution individual and commercial security is a pillar of economic structure to the modern society.

In spite of all these, the impact of adopting insurance as a protective measure in any business has not been adequately felt by insurance policy holders. Risk management contribution in the economic of Nigeria is still very low because policy holders lack proper understanding of the insurance in general perhaps the greatest problem facing the insurance industry is low acceptance of the insurance policy among the populace. Some people do not see the need for bringing future protection when their partners can come to their aid in the event of any case strophic their poor means of living also determine the acceptance of any form of innovation. The means that they are not wiling to accept any idea which do not give them immediate gain.

On the other hand, most insurance agent are dishonest and unpatriotic in dealing with government institution for example, there is a general belief that insurance are “Legalized rubber” the poor  image, as rooted in the few unscrupulous firm which claim settlement of their slighted protect in general pertinent most of the potential policy holders are ignorant of insurance. However, insurance companies still have to fight the battle for recognition and acceptance as a long importance venture in the society.

• Objectives of the study

The purpose of this study is to

1. Examine how effective risk management in the anchor insurance industry has contributed to the successfully and efficient insurance policy in the country.
2. Identify and manage (take preventive) step to handle the uncertainties that attend a business enterprise or that are personal to an individual.

• Studying the nature and form of risk treatment in insurance industry.

1. See how risk management become a tool for economy sustenance.
2. Highlight some of the problems of insurance policies with regards to management.
   • Research Questions

• Does the insurance company has risk control unit?
• Do the company offered insurance product?
• Does the product offered by the insurance company have a high risk factor?
• Is the any general risk involved undertaking any insurance product?
  • Research Hypotheses

Ho:   The more there effective risk management the less to t he economy sustainability.