INSURANCE AS A TOOL OF ECONOMIC DEVELOPMENT IN NIGERIA
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INSURANCE AS A TOOL OF ECONOMIC DEVELOPMENT IN NIGERIA
Chapter one
INTRODUCTION
1.1 History and Development of Insurance in Nigeria.
Insurance as a company did not exist in Nigeria until the late 20th century. Before then, Nigeria had some organised mutual social insurance plans, the most important of which was the extended family system. Age grade associations and cultural unions.
These associations and unions preserved funds gathered from members and distributed to other members in times of need. The first functioning branch of an insurance company in Nigeria was opened in 1921 by the Royal Exchange Assurance Company Limited.
In 1949, three British-owned insurance companies were established and operated mostly in the international and expert sectors, as well as the motor insurance market. As of then, Nigeria had 300 cars and 17 miles of asphalt road.
By 1960, Nigeria had 88 insurance companies, with a gross premium income of million and a market income of N634 million. Some of the largest insurance companies operating in Nigeria are:
NICON: National Insurance Corporation of Nigeria, created 1969
The Anchor Insurance is licenced since October 1989.
Insurance associations have also emerged to promote the expansion of the insurance company or business and to safeguard the interests of members, which include:
NICON (National Insurance Association of Nigeria)
NIA – Nigerian Insurance Association
WAICA: West Africa Insurance Companies Association
AIO – African Insurance Organisation
For many years following the beginning of the 17th century, insurance was not a specialised business, but rather one carried on by merchants who occasionally underwrote policies in addition to their regular activity.
In Akwa Ibom State during the early days of insurance, policies were held on the lands of brokers who worked as merchants’ intermediaries in purchasing and selling products.
By the turn of the twentieth century, the insurance industry had become highly specialised. As a specialised firm, two flaws needed to be addressed.
First, there was no guarantee of the underwriters’ financial stability, and second, there was no fixed location for conducting business. As a result, the insurance agents were forced to travel from office to office in order to get adequate coverage.
1.2 Statement of Problems
Insurance companies play an important role in providing value that exceeds people’s requirements and aspirations while also remaining cheap. Some of the issues confronting the sector (Insurance) are related to the business environment, competition in the insurance industry, the use of technology, and regulation.
The consequences and issues of insurance businesses in Nigeria, with a special focus on Anchor Insurance Company Limited, Uyo, have been described as a long outstanding preamble by insurance practitioners.
Insurance should be an approved subject in all of our secondary schools so that children of a young age learn and recognise the importance of insurance as a policy rather than just a subject.
The government should limit the number of insurance companies from 49 to 15 to facilitate regulation and monitoring, as well as active services. Aside from the shortage of staff in the section, the problem appears to be with the company’s capital.
History from a school of thought suggests that the practice of insurance in Nigeria, particularly AKS, has been severely misunderstood.
In general, most insurance companies are untrustworthy; they sell their products quickly but are hesitant to meet their legal commitments when individuals file claims.
This can be ascribed to insurance management’s inability to fulfil social expectations, as well as a lack of insurance education.
1.3 OBJECTIVE OF STUDY
Determine the role of insurance as a tool for economic development.
To understand how insurance contributes to economic development.
To streamline the usefulness of insurance for users.
To identify the issues influencing insurance in the country’s economic growth standards, particularly in Akwa Ibom State.
1.4 Significance of the Study
Actually, the study will address some of the issues impacting the insurance industry in Nigeria, particularly Anchor Insurance in Akwa Ibom State. The conclusions of this study would be extremely beneficial to practitioners as well as the government.
It will also alter the perception of insurance brokers and underwriters of common interest. In order to urge the general people to achieve the aims established by the inquiry into insurance as a tool of economic management in Nigeria, industries must first adhere to their principles.
“Utmost good faith” in relation to the study, the issues of insurance companies and practitioners, which will be significantly reduced, if not abolished. If the recommendation is properly implemented by both the unsaved and the insurance.
Although losses may be induced by efficient care and precaution, this study will light the further prospects of Anchor Insurance saved the general public, readers or users of this research and perlarge other underwriters at must also be added that in our schools
insurance should be considered endowment of professionals for the study of this subject is important, therefore, the public needs to be adequately informed before warranting to become professionals and thereby increasing
1.5 RESEARCH QUESTIONS.
Does insurance serve as a tool for economic development?
Does Anchor Insurance use a canvassing strategy to sell insurance policies?
What are the ways in which insurance affects economic development?
Is there any benefit in insurance for the user?
What are the issues impacting insurance in economic development?
1.6 SCOPE AND LIMITATION.
This research is limited to Anchor Insurance Company Limited, Uyo, Akwa Ibom State. A closer study at this insurance house demonstrates that, in addition to assisting traders, insurance companies make significant contributions to the national economy.
The researcher did not have time to visit other insurance companies, where the scope may have been broader and the resulting concerns incorporated in this project. According to the data, the sample of the insurance firm covers the achievement of all insurers from around the nation.
I’d like to add here that insurance companies have more problems than successes, so I’d like my supervisor to please give me some time to discuss some of the problems, which should not be considered outside the scope of this project topic.
1.7 Definition of Terms
Assurance: This is a contract or agreement between two parties: the assurer and the insured.
Assurer: The insurance company or body that an insurance firm enters into a contract with.
Comprehensive: A policy that covers all of the things you insured.
Compensation: The practice of indemnifying the person who is a victim of the term insured.
Cover Note: This is a writer note insured to policyholders in lieu of an insurance certificate.
Endowment: This specifies the time of death or at an earlier date.
Insurable Interest: One of the insurance concepts that states that you must have an interest in the items you want to cover.
Premium: The total amount paid, whether monthly, quarterly, or annually, for the products or commodities insured.
Utmost Good Faith: Another insurance concept that requires you to be clear and state all of the facts about what you wish to insure.
Policy: This is the document supplied by the insurance business to the insured to grant him or her the rights of a client.
The Proposal Form is the first document that the insurer sends to anyone who wants to get insurance.
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