The management of insurance companies towards the development of business enterprises

Thesis Overview

<p> </p><p>INTRODUCTION</p><p>Life is full of risk and every human being is confronted with<br>possibility that one day one of these hazards which form part of life<br>may befall them because one financial loss or the other. The purpose of<br>insurance is to indemnify the victims for the financial loss they might<br>have suffered as a result of these risks. Risk is a concept that denotes<br>a potential negative impact to an asset or some characteristic of value<br>that may arise from some present process or future event. In everyday<br>usage, “risk” is often used synonymously with the probability of a known<br>loss. Paradoxically, a probable loss can be uncertain and relative in<br>an individual event while having a certainty in the aggregate of<br>multiple events (see risk vs. uncertainty below). Risk is the<br>possibility of an event occurring that will have an impact on the<br>achievement of objectives. Risk is measured in terms of impact and<br>likelihood.<br>Insurance was not set out to climate and cannot soften the blow in a<br>purely financial sense of obtaining monetary compensation to the victims<br>thereby placing them in a financial position.<br>The purchasing of an insurance has been earlier describe as the insured<br>person as a policy holder in order to protect himself against a<br>particular risk, take out a policy with an insured, thereby passing over<br>the risks to the insured on a payment of a fee known as premium.<br>Life is associated with different kind of risk some of this risk are<br>insurable while some are not. The insurance industry in each devices<br>different type of insurance policy to carter for each one to the<br>insurance risk. The more conventual‟s, one being marine, fire, life,<br>aviation, motor, person, accident and a lot of others.<br>1.1 BACK GROUND OF THE STUDY<br>Insurance as an industry did not exist in Nigeria until the later part<br>of the twentieth century. However, there existed in Nigerian<br>communities, some form of organize mutual social insurance schemes which<br>had the future of modern insurance.<br>Apart from the early social insurance scheme, insurance as an industry<br>is relatively new in Nigeria. The first operation branch of an insurance<br>company was open in Nigeria in Lagos in 1921 by the Royal exchange<br>assurance Plc. and it remain the only insurance company in Nigeria until<br>1949 when three British owned insurance companies were opened up.<br>As at the time Nigeria got her independent operating insurance as risen<br>to twenty five and were mainly foreign owned. The insurance degree was<br>prorogated to regulate the way previous legislation did not do.<br>The insurance company In Nigeria and the insurance industry are control<br>by the federal ministry of finance another offices of director of<br>insurance. The insurance departments of these ministries are responsible<br>for the control activities of insurance companies so as to ensure<br>compliance electrets of 1976 and other relevant regulation related to<br>the business of insurance in Nigeria.<br>Royal Exchange assurance Plc. engage themselves in the following types<br>of risk, they are;- loss of profit following the insurance personal<br>inability, trained insurance, private can insure motor cycle group,<br>house holders comprehensive insurance and all kind of risk.<br>Royal Exchange Insurance Nig. Plc. as many branches within Nigeria with<br>the head office in Lagos and the incorporation number 6572 and the<br>degree number that symbols Royal Exchange insurance his degree 58 of<br>1920.<br>1.2 STATEMENT OF THE PROBLEM<br>Owing to the negative factions surrounding the insurance industry in<br>Nigeria, the activities of the industry have been subjected to various<br>criticisms of those negative factions. We can identify good number of<br>problems. Therefore, the statement of this problem of this study could<br>be obtained based on the observation and critical analysis of the<br>industry. Non payments of claims in the industry have become a faction<br>that negatives the performance of the industry. Despite the factor,<br>insurance company collect premium from their clients.<br>Another is the issue of inadequate capital and investment to put the<br>company in a more favorable condition to meet their demand of their<br>clients.<br>Often business organization in the country that rely on the insurance<br>companies realize they are in the case were they incurred losses which<br>have been insured barely affect the business.<br>1.3 OBJECTIVE OF THE STUDY<br>As a general rule, there are hardly any differences between the aims and<br>objectives of the insurance in Africa from those of similar ones<br>operating elsewhere in the world. A brief examination of the aims of a<br>typical insurance emphasizing those features that would be OD special<br>interest to the prop actors and managers of insurance company in<br>Africa will be useful. The objective of an insurance company may be summarized as follows;-<br>1. To sell insurance cover to insurance consumers.<br>2. To settle all genuine claim family land promptly in accordance with law and be formed relevant insurance policy.<br>3. To run business or organization in such a way that it produce a fair<br>to the shareholders who funded that capital with which the business was<br>established.<br>In moving forward these basic objectives, the prop actor and managers of<br>the insurance company have certain responsibility to different group<br>and making their decision they must bear in mind and protect the<br>interest of each group, these groups are;-<br>i. The policy holders.<br>ii. The shareholders.<br>iii. The workers and staffs.<br>iv. The Nation and the society.<br>1.4 SIGNIFICANCE OF THE STUDY<br>Insurance companies form a part of the very fabric of the economy and<br>are indispensable to it in the modern state. They are vitally necessary<br>because they are one of the most important vehicles for development and<br>because of the security they give to entrepreneur, that policy holder<br>and shareholders.<br>The availability of insurance maximizes the entrepreneur‟s uncertainty<br>to the extent that some of the risks with which he is faced with can be<br>translated, for a fix amount called the „‟premium‟‟. He is to fully<br>commit his assets to the operation of his business. This enables them to<br>acquire the necessary confidence and tranquility of mind that are<br>requisites to fruitful risk looking.<br>1.5 SCOPE OF THE STUDY<br>The researcher‟s work would have been wide in nature; however, it has<br>restricted itself to insurance company. Thus the study will focus and<br>concentrate strictly on the role of insurance company towards the<br>development of business enterprises. Insurance provide a means for<br>industrial and societies to cope with some of the risks faced in<br>everyday life. Earning capacity is asses that should be protected<br>through insurance.<br>1.6 LIMITATIONS TO THE STUDY<br>A research of this nature is found to have a lot of limitations. Time<br>factor was a serious problem encountered; the period given for the<br>completion of this research work was share along with academic,<br>non-academic work which was necessary in relation with a completion of<br>school in general. The time spread to include the distribution and<br>gathering of questionnaire from respondents which was a problem of its<br>own entirely.<br>Financial constraints can never be rule out in a situation like this,<br>the money required for the running around, cost of materials etc.<br>Another limitation is that of material for the secondary data. Even<br>though there are many existing text books and journals of insurance<br>nature which would have been used for this research work. Getting them<br>in the library wasn‟t easy as many students are equally writing on<br>similar topics which require the same materials.<br>1.7 STATEMENT OF HYPOTHESIS<br>In every study, there is an assumption on the variable of that study.<br>This assumption tends to predict the outcome of the study. The<br>hypothesis of this study is to asset the following;-<br>HI: Insurance firms play a vital role in the development of nation economy.<br>HO: Insurance firms don‟t play a meaningful role in the development of nation‟s economy.<br>1.8 DEFINITION OF KEY TERMS<br>OD: Organizational Development</p> <br><p></p>