INSURANCE AS A TOOL OF ECONOMIC DEVELOPMENT IN NIGERIA
CHAPTER ONE
INTRODUCTION
1.1 HISTORY AND DEVELOPMENT OF INSURANCE IN NIGERIA
Insurance as a business did not exist in Nigeria until the later part of the twentieth century. Before then existed in Nigeria some forms of organized mutual social insurance schemes prominent among their where the extended family system. The age grade associations and the cultural unions. These Associations and unions maintained found collected from member and extended to other members in time of needs. In 1921 the first operational branch of Insurance Company was opened in Nigerian day the Royal exchange Assurance Company Ltd.
In 1949, three British owned Insurance Companies where opened and operated mainly in International and expert sector is well as motor insurance sector. As at then a total of 300 cars and 17 miles of tarred road were recorded in Nigeria. By 1960 Nigerian recorded a total numbers were 88 insurance companies with a gross premium income of million and a corresponding market income of N634 million. Some of the major Insurance Companies operating in Nigeria include:
- NICON: National Insurance Corporation of Nigeria established 1969
- The Anchor Insurance etc
Licensed October 1989.
Insurance Association have also spring up to foster the growth of the Insurance Company or business and for the protection of the interest of members which include:
NICON – National Insurance Association of Nigeria
NIA – Nigeria Insurance Association
WAICA – West Africa Insurance Companies Association
AIO – African Insurance Organisation
For a number of years after the beginning of the 17th century insurance was not a specialized business, but was carried on by merchants who occasionally underwrote policies as a sidelines to their regular activities. In Akwa Ibom State on the early period of Insurance, the policies where in the lands of the brokers who acted as merchants agents in buying and selling goods. The insurance business had become specialized by the beginning of the 20th century. As a specialized business two defects had to be remedied.
First, there was a lack of any kind of guarantee of the financial stability of the under writers and second, there was no definite center for carrying on the business. The insurance brokers, therefore, had to go from office to office to secure sufficient incurrence.
1.2 STATEMENT OF PROBLEMS
Insurance Companies have a pivotal role in delivering value which surpasses the needs and aspiration of the peoples and at the sometime, one affordable. Some of the problem faced by the sector (Insurance) pertain to the business environment, competition in the insurance use of technology and regulation.
The implications and problems of insurance companies in Nigeria with a particular reference to Anchor Insurance Company Limited, Uyo has been termed as a long outstanding preamble by the Insurance practitioners.
Insurance should be an approved subject in all our secondary schools to enable people at tender age to understand and know the need for insurance not just as a subject but as a policy. Government should reduce number of Insurance companies from 49 to15 for easy regulatory and monitory, as well as active services. A side of shortage of manpower in the section more, problem seems to be with capital of the company.
History from a school of through argues that practice of Insurance in Nigeria especially AKS has been seriously misunderstood.
In general most of Insurance Companies are not trust worthy, the will sell quick their policies but become too slow in meeting their legal responsibilities which people want to make claims.
This can attributed to inability of Insurance management to meet up with their social expectation and lack of Insurance education.
1.3 OBJECTIVE OF STUDY
- To identify the role of insurance as a tool for Economic development
- To find out the ways in which insurance function is economic development
- To streamline the usefulness of insurance to the users
- To find out the problem affecting insurance in economic development standard of the country especially Akwa Ibom State.
1.4 SIGNIFICANCE OF THE STUDY
Actually the study will revert some of the problem affecting insurance industries in Nigeria most especially Anchor Insurance in Akwa Ibom State. The findings of this study would be of immense help to the practitioners as well as government. It will also change the attitude of the insurance brokers and underwriter of common interest. In order to motivate the general public on the set goals, a plan which the investigation on insurance as a tool of economic management in Nigeria, the industries should first live within their principle. “atmost good faith” with reference to the study, the problems of Insurance house and practitioners which will be drastically reduced if not eliminated. If the recommendation will be properly implemented by both the unsaved and insurance.
Although losses may be induced by efficient care and precaution, this study will light the further prospects of Anchor Insurance insaved general public, reader or users of this research and perlarge other underwrites at must also be added that in our schools, insurance should be consider endowment of professional for the study of this subject is important therefore, the public needs to be adequately informed before warranting to become professionals and thereby increasing the level of qualified manpower needed by insurance companies.
1.5 RESEARCH QUESTIONS
- Does insurance play role as a tool for economic development
- Do Anchor Insurance company method to canvas for insurance policies?
- What are the ways in which insurance in economic development
- Is there any usefulness of insurance to the user
- What are the problem affecting insurance in economic development.
1.6 SCOPE AND LIMITATION
This study is limited to Anchor Insurance Company Limited, Uyo – Akwa Ibom State. A closer look at this insurance house reveals that the contributions of insurance company plays in the Nation economy apart from acting as an aid to trader. The researcher do not have time to visit some other insurance houses of which the scope might have been wider and the resultant problems being included in this project. From findings, sample of the insurance house cover the achievement of all insurers from all part of the Nation.
I will like to add here that the insurance houses have problems more than the achievements, hence I will like my supervisor to please permit me some time to say a little of the please permit me some time to say a little of the problems and should not be regarded as out of scope of this project topic.
1.7 DEFINITION OF TERMS
Assurance: This is contract or an agreement between two parties, the assurer and the insured.
Assurer: The Insurance Company or body at which an insurance firm enters into a contract with
Comprehensive: Policy which covers all possible things you insured.
Compensation: The art of indemnifying the person who falls victim to the term insured.
Cover Note: This is a writer note insured to the policy holders in place of insurance certificate.
Endowment: This specifically states the time or at earlier death.
Insurable Interest: One of the principles of Insurance which state that one must have interest in the things before insured.
Premium: The total sum paid i.e. monthly or quarterly or yearly for the goods or items insured.
Utmost Good Faith: Another principle of insurance which means that one must be clarified and state all facts about what one want to insure.
Policy: This is the document which is issued by the Insurance company to the insured to empower him/her the right of a client.
Proposal Form: This is the first document from the insurer to any person proposing to buy an insurance cover.
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