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ABSTRACT
The study evaluated insurance contribution to the growth of Nigeria. the specific objectives are to examine insurance as a contributing factor to the growth of Nigeria, that government should actively participate in the insurance business to enhance rapid economic growth of the nation, it is also aimed at to device practical measures to ensure massive awareness among the timid youth, to unveil the various opportunities available to insurance students in Nigeria.The researcher deemed it necessary to sample opinions by administering a number of questionnaires. In view of the fact that the nature of the problem of this study concerns the entire country. Our research judgment was based on data collected from staff and management of Nicon Insurance as well as Lead Way Insurance Companies of Rivers State.the researcher made use of both primary and secondary data collection techniques. Findings revealed that insurance contributes significantly to the growth of a Third World Nation. Based on the findings of the study summary conclusion and recommendations were made that a regular orientation programme should be organized from time-to-time for individuals, Government, as well as corporate organizations about safety and risk management culture so as to increase their level of competency and work performance, government should reduce the rate of tax paid by companies (Insurance Companies) so that they can pick up the challenges of providing social amenities to better the standard of living of the people.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Before the inception of modern insurance it is practiced today in Nigeria, some form of traditional insurance was in existence in Nigeria. Osaka (1992:3) explained the above as including social schemes which evolved through the existence of extended family system and social associations such as age grades and other unions.
The practice of insurance in our contemporary society could be traced to 1893 when the bank of British West African (BBWA) the ancestors of First Bank of Nigeria PLC which was founded to acquire the business carried on at Lagos by the African Banking CorporationLimited and Elder Dempter company and since then, the business has grown to its present size of about seventy- nine registered companies, conducting varieties of insurance business in Nigeria. This figure however, was consequently upon the downsizing of the financial sub-sector by the Apex financial institution in Nigeria, the Central Bank of Nigeria and the Federal Ministry ofFinance.
It is obvious that there is no free risk society. Human being are exposed to different kinds of risks such as fire, accident, diseases, armed robbers, kidnapping and other criminalities in our everyday life. Insurance product therefore were developed in response to environment changes as they affect certain communities. For this reason, whilst some classes of insurance product are regarded as new to the Nigerian market, they may infact have long existed in other insurance market. It is necessary to bear these peculiarities in mind when we speak of few insurance product. Insurance practitioners sometimes tends to take it for granted and go about theirdaily business as if they can exist without effectively responding to the growing need of their customers.
Insurance exist solely as a mechanism to alleviate the financial impact of a mishap affecting an individual, a corporate body and the society as a whole. The industry cannot claim to have the divine right to sell its product at a price solely determined by the industry, without fully taking into account whether the products satisfy the needs of its clientele. Even where it is believed that such right exists, a competitive environment within the insurance market will not always permits that. The industry therefore, has an obligation to research the needs of the society we live in and to develop appropriate product to meet these need at fair price. It can only survive and remain relevant as long as it is responsive to the development of new products to meet the over changing economic and social environment, Carr S. (2007).
Insurance therefore is an arrangement whereby people who are exposed to identical risk situation contribute money into a common fund out of which those who are unfortunate to suffer loss receive compensation or being indemnified there from. The purpose of insurance is to provide for the payment of monetary compensation for losses suffered by the insured party a small sum of money known as a premium to an insurer who promise in return to compensate the insured person who has paid premium for any loss he may suffer, subject to the general conditions expressed in the policy of insurance; (Carr S. 2007).
1.2STATEMENT OF THE PROBLEM
- To what extent does insurance serves as a contributing factor to the growth of a third world nation?
- Does insurance operation has any positive impact on the lives of the populace?
iii. Can insurance reduce the severity and frequency of loss occurrence in our daily life and therefore encourage economic growth?
- Has insurance been able to meet up the ever increasing need of the general public through product modification?
- Does insurance as an aids to trade contributes to the growth of commerce in this country?
1.3 PURPOSE OF THE STUDY
- The crux of this study is to examine insurance as a
contributing factor to the growth of Nigeria.
- That government should actively participate in the insurance business to enhance rapid economic growth of the nation.
- It is also aimed at to device practical measures to ensure massive awareness among the timid youth.
- To unveil the various opportunities available to insurance students in Nigeria.
1.4 RESEARCH QUESTION
This study is aimed at providing answers to the followingquestions.
1) What is insurance?
2) To what extent has insurance a contributing factor to the growth of the country?
3) Is there any relationship between insurance and economic growth?
4) Can insurance meet up the challenges ahead of it?
5) Can insurance ensure a free risk surety through its risk management strategies?
1.5 RESEARCH HYPOTHESIS
The research hypothesis that has been formulated for analysis is in the form of null and alternative hypothesis. They are as follows:-
H0: Insurance does not contribute significantly to the growth of a third world nation.
H1: Insurance contributes significantly to the growth of a third world nation.
1.6 SCOPE OF THE STUDY
The problem under study affect the country in its entirety and therefore require the whole Nigerian coverage. But since it is impossible to achieve that the study was limited to Nicon insurance and Lead Way Insurance Companies in Port Harcourt metropolis.
1.7 SIGNIFICANCE OF THE STUDY
Significantly, this study is embarked upon to unveal the true benefit of insurance as a contributing factor to the growth of a third world nation. It also shows that insurance industry has remained the highest employer of labour in Nigeria, strengthen the growth of commerce and industry and rekindle the confident of investing scarce financial resources into meaningful endeavour for profit making devoid of loss of capital guarantee. Significantly put, insurance has helped to alleviate the burden of old age dependants and displaced accident victims from the government thereby foster economic development of the third world nation.
1.8 LIMITATION OF THE STUDY
The basic and fundamentals set back that have belated (his study-is financial incapacitation which could have rendered this work useless though effort were made to actualize this. The second problem affecting the work was “time frame” which was too short to carry out the study in all the insurance companies in Nigeria though limited to Nicon insurance and Lead Way Insurance companies all in Port Harcourt, Rivers State.
1.9 DEFINITION OF TERMS
The following definitions were proffered for thorough comprehension of some of the intrigue terms that are used in this research work, among which are;
- Insurance: Is an arrangement whereby people
who are exposed to identical loss situation contribute money into a common fund from which the unfortunate ones get compensation from.
- Insured: The person who transferred his risk to the insurance company on payment of a stipulated fees called premium.
iii. Insurer: The person to whom risk is transferred to
- Growth: An increase in size, amount or degree of something.
- Contribution: A give or payment to a common fund or collection.
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