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ABSTRACT
This research work critically examined the role of Government in making Insurance count in Nigeria. Works of other scholars on related areas under investigation were extensively considered. The objective of the study was In achieving this objective data were collected using self designed questionnaires of which 100 were distributed to 100 respondents, furthermore, organized interview were also carried out. Related literatures were also reviewed all in a bid to buttress the point. A simple percentage table was used to present the response in the questionnaires. Following the response gathered from the respondents, it was discovered that the Government have a very significant role to play in ensuring that insurance count in Nigeria and gain prominence in the Economy of the nation. Based on the finding, it is recommended that compulsory insurance policy should be fully implemented amongst other recommendations such as the effects of interpreting law on insurance transaction, government policies affecting insurance business, government as buyers of insurance product, government as providers of insurance product, to increase the level of insurance patronage in Nigeria by the public and gain prominence in Nigeria.
TABLE OF CONTENTS
TITLE PAGE – – – – – – – – – i
CERTIFICATION – – – – – – – – ii
DEDICATION – – – – – – – – – iii
ACKNOWLEDGEMENT – – – – – – – iv
ABSTRACT – – – – – – – – – v
TABLE OF CONTENTS – – – – – – – vi
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY – – – – 1
1.2 STATEMENT OF PROBLEM – – – – – 4
1.3 PURPOSE OF THE STUDY – – – – – 5
1.4 RESEARCH QUESTIONS – – – – – – 6
1.5 SIGNIFICANCE OF THE STUDY – – – – 6
1.6 SCOPE OF THE STUDY – – – – – – 8
1.7 LIMITATION OF THE STUDY – – – – – 8
1.8 DEFINITION OF TERMS – – – – – – 9
REFERENCES – – – – – – – – 12
CHAPTER TWO
LITERATURE REVIEW
2.0 INTRODUCTION – – – – – – – 13
2.1 SIGNIFICANCE OF INSURANCE – – – – 13
2.2 THE INSURANCE INDUSTRY – – – – – 19
2.3 THE ATTITUDES OF THE PUBLIC TOWARDS
INSURANCE IN NIGERIA – – – – – – 22
2.4 POSSIBLE SOLUTION TO INCREASE AND
ENHANCE CONSUMER CONFIDENCE AND TRUST
IN THE INSURANCE INDUSTRY IN NIGERIA – – 25
2.5 THE ROLE OF GOVERNMENT IN MAKING
INSURANCE COUNT IN NIGERIA – – – – 27
2.6 THE EFFECTS OF INTERPRETING LAW ON
INSURANCE TRANSACTION – – – – – 28
2.7 GOVERNMENT POLICIES AFFECTING
INSURANCE BUSINESS – – – – – – 29
2.8 GOVERNMENT AS BUYERS OF INSURANCE – – 30
2.9 GOVERNMENT AS PROVIDERS OF INSURANCE
PRODUCT – – – – – – – – – 31
CHAPTER THREE
RESEARCH METHODOLOGY
3.0 INTRODUCTION – – – – – – – 33
3.1 RESEARCH DESIGN – – – – – – – 33
3.2 POPULATION OF THE STUDY – – – – – 33
3.3 SAMPLE AND SAMPLING TECHNIQUES – – – 33
3.4 INSTRUMENTATION – – – – – – – 34
3.5 VALIDITY – – – – – – – – – 35
3.6 RELIABILITY – – – – – – – – 35
3.7 ADMINISTRATION OF INSTRUMENT – – – – 36
3.8 DATA ANALYSIS – – – – – – – 36
CHAPTER FOUR
PRESENTATION AND ANALYSIS OF DATA
4.0 INTRODUCTION – – – – – – – 37
4.1 DATA PRESENTATION AND ANALYSIS – – – 37
4.2 DISCUSSION OF FINDING – – – – – 45
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 INTRODUCTION – – – – – – – 49
5.2 SUMMARY – – – – – – – – 49
5.3 CONCLUSION – – – – – – – – 51
5.4 RECOMMENDATIONS – – – – – – 52
BIBLIOGRAPHY – – – – – – – 54
APPENDIX I – – – – – – – – 56
APPENDIX II – – – – – – – – 57
CHAPTER ONE
INTRODUCTION
1.9 BACKGROUND OF THE STUDY
In Nigeria presently, the banking sector enjoys more acceptance and recognition by the Nigeria Public, following the fact that it provide domestic credit measured at 37.27 percent according to the World Bank Report in 2011. This singular practice has gone a long way in enhancing the economy of the country as well as reducing poverty rate as more jobs are created and there is employment opportunities in small and medium scale enterprise.
Following the activities of the banking sector, it has to an extent made the insurance business to be obscured as it is believed by the Nigerian citizens that, the banking sector covers their needs, where loan and overdraft are issued to the public thereby not given insurance a chance of proving its role in the society.
Risk is since as hazard, chance of loss or chance or bad consequence or exposure to mischance, one important failure of risk is its close association with uncertainty.
Unfortunately, uncertainty cannot be eliminated and since it is clear that wherever there is uncertainty there is rest, it follows that not all risk outcome is uncertainty. This uncertainty of risk give rise to “insurance” so as to provide appropriate measure in handing the risk so that when the uncertainty of the risk scale which constitutes a loss, the business enterprise and everyday life will not suffer the loss and the financial loss or damages that would have been incurred by the business and individual is now taken care by insurance companies.
Despite Nigeria growing population, it’s still lagging behind in the world global market ranking. Nigeria occupy the 6th position in Africa and 66th position in the global insurance market with Human Development Index (HDI) of 0.453% and Gross Domestic Product (G.D.P) per capital is U.D.S 43 and 0.70% as premium share of GDP sigma, 2005: U.S.P.D, 2003).
While bemoaning and lamenting the current situation facing insurance in Nigeria, which include low patronage of insurance produce and others in Nigeria, Osoka, (1992).
Highlight the prevalence of confusion among insurance practitioners which premised on selling and marketing. According to Osoka, while selling the marketing centre on creating demand for the product that has already been decided, marketing on the other hand is directed towards identifying the various needs and wants of the consumer and design product that will fit in for the needs and wants of the insuring public (consumer), hence, the necessity of understanding the needs and wants of the insuring public would likely solve the problem of low patronage and under-insurance in Nigeria.
The Government perform various functions or roles in making insurance count, the Government also established a regulatory body (NAICOM) to regulate the practice of insurance, it is in the light of the above statement that this study is carried out to evaluate roles in details that are performed by the Government in the making insurance count.
1.10 STATEMENT OF PROBLEM
The problem state here are problems demonstrated by majority of the insuring public towards insurance business activities in Nigeria, as well as the opinion and perspective of the insuring public which have resulted insurance into low patronage base on the fact that the insuring public that insurances are “fraudsters” base on claim level investigation.
The perspective of the insuring public is as a result of low understanding about insurance business for clarity and precision, the problem are itemized as follows:
- Low patronage of insurance products by the insuring public following fear of fraud or being defrauded by the insurance companies.
- Delay following settlement of claims (compensation, indemnities, benefit) as the case may be depending on the policy.
- Rampant litigation in the business of insurance between the insured and the insurer; the assured, assurer and beneficiary.
- Fraudsters and inexperience staff in the insurance industry insurance has been seen and experienced as a risk transfer mechanism that benefit all disciplines and the government have made some insurance compulsory, yet insurance still remains at the back corner of the economy as seen above.
It is in the light of the above realities that this study is carried out to examine the roles of government in making insurance count in Nigeria.
1.11 PURPOSE OF THE STUDY
In accordance with this research work ‘making insurance count: the roles of government’. The purpose of this study is clearly itemized for the purpose of proper understanding.
- To investigate the reason why majority of the insuring public do not buy or have insurance policy in Nigeria.
- To investigate the role played by the government towards enhancing insurance business.
- To examine the extent of insurance development in Nigeria.
- To investigate how far government has helped in the development of the Nigeria insurance industry.
- To x-ray the extent government’s involvement in the insurance business will make insurance count in Nigeria.
1.12 RESEARCH QUESTIONS
- Why do majority of the insuring public don’t buy or have insurance policy?
- What are the roles play by the government in enhancing insurance business?
- What is the extent of insurance development in Nigeria?
- To what extent has government helped in the development of the Nigeria insurance industry?
- To what extent can Government involved in insurance business make insurance count in Nigeria?
1.13 SIGNIFICANCE OF THE STUDY
This study is basically aimed at examining the roles of government in making insurance count in Nigeria and also providing solution to the problem of low patronage of insurance business which have destroy the image and reputation of insurance business.
This study will help the insuring public to understand the purpose of insurance and it’s operation in other for proper understanding and clarity. These are the following reason for this research work:
- The government will find the study of immense benefits as they will see reasons why new laws should be enacted or formulated to enable the business of insurance to thrive in Nigeria.
- The prospective insured and assured and the general insuring public will find this study interesting as will demystify and simplify the practice of insurance and this in return will make them have a proper understanding about insurance and also a positive impact about insurance thereby making insurance count and gain prominence in Nigeria.
- The study will also help various insurance companies in Nigeria as they will discover new ideas and new information that will help them thrive in business.
1.14 SCOPE OF THE STUDY
This research work titled ‘making insurance count: the role of government’ constitute the basis and premise of the research work.
This study critically examine the role performed by the government in making insurance by way of making it gain prominence in Nigeria, but the purpose of concision and precision and to avoid unnecessary lengthiness and as well as undue stress, this study is limited to Government establishment, the insuring public and one (1) insurance company (Niger insurance Plc).
1.15 LIMITATION OF THE STUDY
This is an evaluation of the role of government in making insurance count in Nigeria, this study is of important as it will shift the idea and believe of the insuring public in favour of the insurance when proper understanding shall be given about the operation of insurance business in Nigeria.
The researcher also intend to evaluate the role of Government in making insurance count by way of making it gain prominent in Nigeria.
However, such tedious and lengthy research work will consume time and a huge amount of money as well, so following the constrains of insufficient time and financial deficits, this research to an extends limited or restricted thereby having a scope of the study.
1.16 DEFINITION OF TERMS
Insurance being a professional course of practice like other professional courses of practice have its’ distinct and unique term/terms which differentiate it from the other profession, these terms are used to achieve and attain maximum meaning of this work, so it is very imperative for readers of this work to memorize or at list have a fair knowledge of what these terms mean for proper understanding of what the study is all about.
Here are some of the terms used and their meaning.
Assurance: This is a contract between the assured and assure a little some call premium is paid by assured and in return the assurer paid a sum call benefit upon the occurrence of death illness or disability comes first.
Insurance: Insurance is a pool of risk it is an agreement between the insured and the insurer in which the insured pays his premium and the insurer shall compensate or indemnify the insured upon the occurrence of an insured event, that is the insured pays his premium and the insurer shall compensate the insured when the loss which is property damage or liability to third party occur as stated in the contract.
Risk: Risk is any chance which is likely to cause a loss, it can also be seen as any contingency which is likely to cause a loss.
Government: government is an agency that carry out the management function and responsibility of the state, it is also a machinery through which the state is been run or administer.
Insuring public: Insuring public are person that are eligible to have insurance policy or product.
Assurer: this is also refer to as the life office, this is a company that issue life assurance policy.
Insurer: This is a company that issue insurance policies, its policies are base on property damage and liability to third party.
Claim: Claim is a request or demand being made by the assured and insurer upon the occurrence of loss which is an insured event.
Count: For the purpose of this study count shall mean making something known or gain prominence by mean of enhancing its operation.
Roles: Roles are strategies put in place or duties perform by a body or individuals.
Compensation/indemnity: Compensation and indemnity work together compensation which means payment of money for loss occurred which is an insured event, indemnity. It means restoring back to the same financial position. It was before the occurrence of loss.
Benefits: Benefit are money paid in life assurance policies or business.
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