THE IMPACT OF INSURANCE COMPANIES IN THE BUSINESS WORLD: A CASE STUDY OF BUSINESS IN BENIN CITY

CHAPTER ONE

1.1 INTRODUCTION

Insurance in its modern form was first introduced into Nigeria by the British long before the arrival of the British a lot of organized trading activities was going on in the Nigeria territory, but there was no organized insurance business, as we know it today. The first insurance company to have a full branch office in Nigeria was the Royal Exchange Assurance. It opened, its first office in Lagos in 1921 and until 1949 it practically dominated insurance business in the country. Therefore, there was high degrees of awareness of the importance of insurance services to the economic growth and business world particularly in Edo State and Nigeria in general. At the end of 1989 to 1998, insurance companies were operating as registered companies in Nigeria and most are indigenous. The leading indigenes insurance company in Nigeria is the National Insurance Cooperation of Nigeria (NICON) which is fully owned by the Federal Government of Nigeria which underwrites about 25% of the total insurance business in Nigeria. Some of the objectives of the company is to encourage commercial houses, cooperation’s and companies to go into ventures by giving them cover against possible losses. It also encourages the spirit of savings by way of life assurance which provides benefits for the dependent, in case of untimely death of the assured. The board is run by experienced men and a set of businessmen and it headed by a chairman. The management of the company is completely Nigerianised (i.e. Nigerians) as mentioned before. The chief executive is the general manager who directly responsible to the board of directors.

He supervised day-to-day running of the company and he is assisted by experienced and able senior management staffs who are in charge of finance, administration, life and pension and technical department. This was however, attributed to government stringent economic measure and poor economic situations of the country. According to the insurance Act of 1976, insurance in Nigeria is divided into two main classes. Thus life assurance and non-life insurance. A. Life Assurance i. Whole life assurance ii. Endowment iii. Children education and assurance iv. Mortgage protection v. Terms assurance vi. Group business protection B. Non-Life Insurance i. Motor vehicles ii. Burglary house breaking iii. Fire iv. Cash-in-transit v. Goods-in-transit vi. Bonds vii. All risks/contractors viii. Fidelity ix. Workman’s accident.