THE IMPACT OF PROMOTIONAL STRATEGY ON THE DEVELOPMENT OF INSURANCE IN NIGER

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ABSTRACT

 

The purpose at this research is concerned on the impact of the government policies in regulating the activities of insurance companies operating in Nigeria. The government responsibility to supervise, regulate and control the activities of insurance companies and intermediaries is to protect the interest of the insuring public and to save them from exploitation by unreliable insurers. Because of the intangible nature of insurance product, the government wants to make sure that those engaged in it must be competent person who will fulfil their promise a d pledges when the need arise. Also because of the complexity of insurance business it is necessary that the government regulate the policy holders. Also because of violation trust that occurs in insurance transistors, the government has found it necessary to regulate insurance industries so as to control such violations.

The project attempts to appraise the effectiveness of government policies in regulating the insurance companies in  Nigeria. The insurance industry in Nigeria has acute shortage of high level of manpower for most classes of insurance, also many Nigerians suffer financial loss due to lack of knowledge in insurance. Due to this problem, government should introduce programs regarding to insurance to the public as to highlight them on the benefit accrued to insurance due to constant financial loss they encounter as a result of lack of insurance knowledge.

TABLE OF CONTENTS

CHAPTER ONE

1.0       Introduction

1.1      Background of the study

1.2     Statement of the problem

1.3     Purpose of the study

1.4     Significance of the study

1.5     Scope of the study

1.6     Definition of the term

CHAPTER TWO

2.0     Literature review

• The origin of the insurance industry
• The development of modern insurance in Nigeria
• The insurance market and intermediaries
• The socio-economic significance of insurance
• Structure and performance of the insurance industry
• Government regulation of the insurance companies
• The impact of structural adjustment programs on insurance companies operation in Nigeria

CHAPTER THREE

• Research methodology

Introduction

3.1     Restatements of research question and hypothesis

3.2     Research design

3.3     Sources of data

3.4     Population of study

3.5     Sample size / Design and procedure

3.6     Data collection instrument / process

3.7     Data presentation and analysis on techniques

3.8     Limitation of the methodology

CHAPTER FOUR

4.0     Data Presentation and Analysis

4.1     Presentation and analysis of data

4.2     Hypothesis testing

4.3     Analysis of result

CHAPTER FIVE

5.0     Summary of finding, Recommendation and conclusion

5.1     Summary of findings

5.2     Recommendation

5.3     Suggestion for further research

5.4     Conclusion

References

Appendix

Questionnaires

 

 

CHAPTER ONE

 

• BACKGROUND OF THE STUDY

“Risk is a phenomenon which has been in existence since the beginning of the world. Risk exists whenever the future is unknown” (Lemon 1989: 17). This means that the word implies some element of doubt about future and the outcome may be worse than what it had been at the moment. This man in his daily operations could be viewed as a risk manager, in that man does his best possible to reduce, eliminate, avoid, retain or share risk where they are present.

Tough there were some forms of risk management before the advent of insurance companies in Nigeria such as the extended family system, age grade  association and others. insurance in its modern form was introduced into Nigeria by British.

In 1921, the Royal Exchange Assurance Company was established and it was the first insurance company to open full branch in Nigeria.  In 1949, three other companies emerged. In 1958, Africa insurance company. By 1965, the number of insurance companies rose to 70. in 1977, the Nigeria Re-insurance company was established as a federal government owned insurance company. Nigeria was however under the British colonial rule up to 1960 when she gained her political independence and as a developing country. From 1960 to date a lot of insurance companies came into operation. Insurance is a modern method of sharing loss or spreading risk lightly over a great number of people so that the few unfortunate ones o r persons who sustain or suffer loss do not heavy financial loss as a result of their misfortune to the community. the insured pay premium into a common pool outcome of which the unfortunate few who suffer loss are compensated.

The secondary function of insurance companies includes:

1. Provision of loans for building on the security of a life policy.
2. Encourage and promote commercial enterprise men and industrialist

The accumulated sum of money by insurer re invested to state approved securities and this helps to provide the state with a steady flow investment funds with which the state can provide development and promotions to the local industries which will be of benefit to the community.

Insurance is a contract whereby a person called the insurer or assurer agrees in consideration of money paid to him or her known as premium by another person called the insured or assured to indemnify him against loss resulting to him on the happening of certain events. However, it was known that risk exist whenever the future is unknown and therefore insurance exist primarily to combat the adverse effect of risk.

The purpose of insurance is to compensate or indemnify the victim for his financial loss. It should be noted here that the insurance neither eliminate the loss nor stops the disaster from  happening, what insurance does is to soften the blow in a purely financial sence by offering monetary compensation to the victim whereby placing him in the same financial position after loss as he was before though within the terms of the policy.

Re-insurance is the transfer of insurance business from one insurance company ot another. The original insurer who obtain the insurance contract form the insured or assured is called the direct insurer or the ceding company. Re-insurance arose from the need of the original insurer to spread the risk he has undertaken. Under re-insurance contract is between the ceding company policies. Therefore in the event of a loss, the insured cannot enforce the re-insurance contract.

However, the effect of re-insurance contract on the ceding company includes:

i         Re- insurance reduces the probability of the ceding

company’s ruin by assuming his catastrophe risk.

ii        Re- insurance stabilizes the ceding company’s balance sheet by taking on apart of his risk of random fluctuation risk of change and risk error.

iii       Re- insurance increases the amount of capital effectively available to the ceding company by freeing equity that was tied up to cover risk.

iv       Re-insurance enlarges the ceding company’s underwriting capacity by accepting a proportional share of risks and by providing part of the necessary reserves.

The insurance section is made up of a large number of companies with varying sizes, among which the NAICOM was established. The government uses this commission to regulate the insurance industry. The government uses this commission to regulate the insurance industry. It was established in 1997 by NAICOM decree N0 1 of 1997. Prior to the establishment of National insurance commission, the insurance business regulation and supervision were done by the insurance department of the ministry of finance.

The national insurance supervisory board (NISB) was established in 1991 to take over the supervision of insurance form the director of insurance. National insurance commission (NAICOM) is the head by the commission finance and administration and deputy director for insurance technical.

NAICOM Decree 1 of 1997 stated the functions of NAICOM as follows:

• To ensure eh effective administration, supervision regulation and control of insurance business in Nigeria.
• Establishment of standards of the conduct of insurance business in Nigeria.
• Approval of rate insurance premium to be paid of all classes of insurance business.
• Regulation of transactions between insurers and re- insurance in Nigeria and those outside Nigeria
• Ensuring adequate protection of strategic government assets and other properties.
• To act as adviser to the federal government on all insurance related matter.
• Approve standards, conditions and warranties applicable to all classes of insurance business.
• To protect insurance policy holders and beneficiaries and third parties to insurance contract.
• To publish for sale and distribution to he public, annual reports and statistics on the re- insurance industry.
• To liaise with and advise federal ministries, extra ministerial departments, statutory bodies and other government agencies on all matters relating to insurance contained in annual technical agreements to which Nigeria is signatory.
• To contribute to the educational program of the chartered institute of Nigeria and the West African insurance institute.
• To carry out such other activities connected or incidental to its other functions under the decrees.

1.2     STATEMENT OF THE PROBLEM

The insurance industry in Nigeria has acute shortage of high level manpower for most classes of insurance and re- insurance business. the Nigeria insurance industry does not enjoy the required public goodwill and reason for this has to do with the damage done to practice of the profession by the get rich entrepreneur who goes about the business of insurance with the little regard to the principle of the profession. As a result of this, the government has come up with so many policies aimed at the study though will save the insurance industry. The extent to which all those government policies affect insurance companies and provides solution to ensure  the survival of these insurance companies is another thing. The research therefore, is indicated to examine the impact of various control measures as promulgated by government to regulate the activities of the insurance industry.

1.3     PURPOSE OF THE STUDY

The purpose of this research is essential in a direct investigation on the impact of government policies on the insurance industry in Nigeria.

• To look into the factors hindering the performance of insurance companies through the various government regulatory policies.
• To determine the impact of those government policies on the insurance companies and the insuring public
• Since the insurance industry is the second largest deposit mobilization institution in the country, it therefore encourages saving which plays an important role in the social and economic well being of the country.
• To evaluate the performance of the industry therefore, is necessary for the growth of the economy.

1.4     SIGNIFICANCE OF THE STUDY

i         To enlighten the Nigerian populace about the benefit that they could drive by taken up insurance cover.

ii        To guide the policy makers when hey are enacting laws concerning insurance.

iii       Ascertain the need or otherwise for government intervention through regulatory body in the insurance industry.

1.5     SCOPE OF THE STUDY

i         To determine the impact of government policies in regulating the activities of the Nigerian insurance industry.

ii        The study therefore will concentrate on the Nigeria insurance industry.

1.6     DEFINITION OF THE TERM

i         INSURER / ASSURER: This is the insurance or assurance company that issue out policy to the policy holder.

ii        INSURED / ASSURED: This are policy holders in the insurance business.

iii       PERIL: This is known as a prime cause or what gives rise to the loss.

iv       PREMIUM: This is periodic consideration payment by the policy holder to the insurance company which will necessitate compensation by the insurer to the insured.

v        POLICY: This is a written contract of insurance which is issued to the policy holder.

vi       RE-INSURANCE: This is an insurance company re-insuring again a risk that had already been insured to another insurance company.

vii      CEDING COMPANY: This is the direct insurer or the original insurer who is re-insuring the risk to another insurer.

viii    UNDERWRITING: This is a process by which an insurance company determine weather or not on the basis it will accept an application for insurance.

THE ROLE OF NATIONAL INSURANCE COMMISSION TOWARDS INSURANCE PENETRATION TO THE GRASSROOTS

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TABLE OF CONTENTS

CHAPTER ONE

1.0    Introduction

• Background of the study
• Objectives of the study
• Statement of problems
• Research questions
• Research hypothesis
• Significance of study
• Scope of the study
• Limitations of the stud
• Definitions of terms

 

 

CHAPTER TWO

2.1    Literature review

2.2    Reasons for insurance penetration to the Grassroot levels

2.3    Reasons why insurance are not full penetrated in the

level in the country

2.4    Supervision of the commission

2.5    Reasons for regulation

2.6    Meaning and strategies of marketing development restructuring initiative of national insurance commission towards insurance penetration to grassroot.

2.7    Micro-insurance means of penetrating insurance to grssroot

2.8    Islamic Complaint insurance means of penetrating insurance to grassroot

2.9    Agricultural insurance means of penetration insurance to grassroot

CHAPTER THREE

• Research Methodology

3.2    Primary source of data collection

3.3    Population of the study

3.4    Sample size

3.5    The sample method used

3.6    Method of data analysis

3.7    Formula used

CHAPTER FOUR

• Data analysis
• Analysis and evaluation of data

CHAPTER FIVE

5.0    Summary, Conclusion and Recommendation

5.1    Summary

5.2    Conclusion

5.3    Recommendation

References

Appendix 1

Questionnaire

ABSTRACT

The aim of this project is to analyze the role of the National Insurance Commission in depending insurance service among the vast population of Nigeria. This can  be achieved thorough is oversight functions and use of innovation tools like MOR, micro insurance, Islamic complaint insurance and Agricultural Insurance to meet the majority of Nigeria living in the rural areas. In the course of the study many problems encountered are to be solved by the recommendations that will ensure adequate coverage of the limitations. The type of research method used is primary source of data collection

CHAPTER ONE

1.0   INTRODUCTION

National Insurance Commission is a body that ensure is effective administration, supervision, regulation and control of insurance industries in Nigeria.

The national insurance Commission (NAICON) under the able watch of Mr. Fola Daniel is on top of the situation. The industry is poised to take advantage of serial despoliation and corruption enthroned every where in our economic landscape that poll into insignificance value that enables the society. The insurance consumer Association of Nigeria (INSCAN) and NGO ably led by rear Admiral Isaac Areola is protecting the insurance consumer in Nigeria against unfair practice from insurers.

Insurers should therefore enhance after. Sale service, such as prompt payment / settlement of claims as well as effective intermediation model. And also develop environmentally friendly products, based on market research and ensure an efficacious marketing that will speak to the customers in the grass root.

The bottom line for effective insurance coverage is a prompt payment of claims. Insurance operator should ensure that they take settlement of claim seriously for that will guarantee adequate penetration of insurance to grass root. The commissioner for insurance Fola Daniel sates that the easiest way to attract the public to patronize insurance is treating those who are already insured through prompt payment of claims. “If one tells his friend that his insurance company did not pay claim after his loss, that single complaint is capable of stopping more than 20 peoples from buying insurance in future” in his statement, he said that prompt payment of claim remain the best instrument.

For insurance awareness and penetration expatiating on its utmost importance, that commissioner state that NACCOM will continue to ensure that operators live up to their claim responsibility adding that the commission had received 86 claims complaint out of which 52 valued at 1.2 billion have been resolved and 34 in court. He read the ‘riot act’ that the axe will be yielded on operators who consistently fail to settle discharged claim promptly by losing their license. Insurers had been mandated to administer claim. In accordance for that will enable those at grassroot to embrace insurance and in order to standardize insurance practice.

Moreover, the weak legal framework for the regulation and supervision of insurance industry in Nigeria has been attributed to the poor public perception of the sector; low level of awareness amongst the populace; high political economic and financial systemic risk; non remittance of accumulated premium and investment losses resulting from decline in insurance penetrations.

Furthermore, a lot of companies are being built in the urban area forgetting that many Nigerian are living in the rural area without having the knowledge of what insurance is all about and are eager to boy the policy if well explained.

According to Mr. Fola Daniel, he said that derive to penetrate insurance into the grassroot will see the insurance market growing in an accelerated rate of hitting 8:64% in the net four years. According to the commissioner of insurance, premium income will increase from N300 billion in 2012 to N1 trillion in 2017, motor insurance will increase by ten percent (10%), life insurance by three percent (3%)  and oil and gas by two and half percent 2 ½  % .

The industry’s contribution to the Gross Domestic product will be three percent (3%) and the insurable population will increase to twenty-two percent (22%). The Nigeria insurance penetration is expected to rise above six percent (6%) when compared to Kenyan 3.2% and South African 15%.

1.1   BACKGROUND OF THE STUDY

The Nigerian Insurance Industry has come of age, the genesis of the industry in 1921 had gone through transformation. It morph and from the insurance companies Act 1961, the insurance (miscellaneous provision) Act 1964, the companies decree 1968, the insurance decree 59 of 1976, the insurance Decree 58 of 1991, insurance decree 2 of 1997 to the present insurance Act 2003. There is still room for amendment following strident calls for more consolidations was upgraded to National Insurance Supervision. Board headed by Chief Oladipo Bailey who become the first commissioner of insurance when the National Insurance Commission was set up by Decree N0 1 of 1997, He was later replaced by Barr. Emmanuel Chukwulozie and the incumbent Fola Daniel.

1.2   OBJECTIVES OF THE STUDY

        The following are the objectives of the study,

1. To examine the role of the National Insurance Commission towards Insurance penetration to the grass root.
2. To lay an emphasis on the strategies and way through which National Insurance Commission is using towards penetrating insurance to the grass root.
3. to know how insurance growth can contribute to GDP of the country.

1.3   STATEMENT OF PROBLEM

Most of the problems confronting the commission from carrying out efficient administration on insurance industries in Nigeria are inexperienced management team, inadequate fund for carrying out the roles of the commission etc.

1.4   RESEARCH QUESTIONS

1. Has National Insurance Commission contributed to the growth of insurance industries in Nigeria?
2. Does the level of the commission influence the performance of the industries?
3. What is the role played by the commissioner in Nigeria?

4       What are the efforts of the commission to penetrate insurance to grass root.

5       What are the achievements of the commission so far in the country?

1.5   RESEARCH HYPOTHESIS

HO:  That NACCOM contributes immensely to the growth of the industry in Nigeria.

Hi:    That NACCOM does not contribute to the growth of the industry in Nigeria

Ho:   That the function of the commission is fully executed.

Hi:    That the function of the commission is not fully executed.

• SIGNIFICANCE OF THE STUDY

The significance are as follow

1. To educate the reader of this project about the role of National Insurance commission and the method and strategies used towards insurance penetration to grass root.
2. To alert the commission on several ways of maintaining a strong administration.

1.7   SCOPE OF THE STUDY

This study will cover only the National insurance Commission zonal office Enugu, Nigeria and emphases on the roles they play towards insurance penetration. The analysis and conclusion will base on the data supplied by the commission.

1.8   LIMITATION OF THE STUDY

There are numbers of factors which militated against the smooth conduct and execution of this research work they are as follows:

–       Difficulties in obtaining relevant information about the commission.

–       The scarcity of fuel, hence the high cost of transportation limit the researcher’s movement to various places where necessary information for the research work could be obtained.

–       Financial and time constraint. The research work would have not been carried out as one would have wanted some other method of collecting information could not be used for example observation of work and asset could not be effectively carried out.

1.9   DEFINITION OF TERMS

1. A) NATIONAL INSURANCE COMMISSION: Is a body that ensuring efficient administration, supervision, regulation and control of insurance business in Nigeria.
2. B) CO-OPEARTIVE SOCIETY: This is an insurance association registered under any enactment or law relating to co-operative society. They are not allowed to provide cover to non members. It is guided by a co-operative principle of democracy, equality, religion and political neutrality patronage rate and open membership.
3. C) INSURANCE BROKER: They are experts and professionals in the field of insurance and have a higher duty of care to their principal.

Thy are described as agent of the insured.

D)     INSURANCE AGENT: They connect the insurer and the insured in the insurance market. They are not professionals or experts. They are described as he agent of the insurer, they bring business to the insurer and advice the insurer on market situations.

Impact of pure water production on the economic development of Nigeria

 

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Chapter one- introduction

1.0 background to the study…………………………………….……………….2

1.2 statement of the research problem…………………………………………….2

1.3 objectives of the study………………………………………………………………………….3

1.4 research question…………………………………………………………….4

1.5statement of the research hypothesis………………………………………4

1.6 scope of the study…………………………………………………………..4

1.7 significance  of the study……………………………………………………5

1.8 limitation of the study……………………………………………..………….5

Chapter two  -literature review

2.1production techniques…………….………………..……….………………..6

2.2 packaged water production system…….………………….…….…………7

2.3 quality issues in packaged water production………….……………………7

2.4 procedures for packaged water production……………………………….….8

2.5 the nafdac mandate……………………………………………………….9

2.6 steps taken by nafdac in ensuring effective regulation & control of water production..11

Chatpter three-research methodology

3.0 introduction…………………………………………………………………….14

3.1 design of the study……………………………………..……….……………14

3.2 area of study……………………………………………..….………………..14

3.3 population of the study……………………………………….………………14

3.4 instrument for data collection………………………………………………..15

3.5 method of data collection ………………………………………………16

3.6 validation of the instrument …………………………………………….16

3.7 method of data analysis …………………………………………………16

3.8 decision rule………………………………………………………………18

Chapter four- presentation and analysis of data

4.0 introduction………………………………………………………………………19

4.1 bio data of respondents………………………………………..…………19

4.2 analysis of the research questions………………………………………24

Chapter-five-summary,conclusion and recommendarion

5.1 summary……………………………………………..………………………30

5.2 conclusion ………………………………………………………..………….31

5.3  recommendations…………………..…………………..……………………31

References……………………………………………………………………32

Appendices ……………………………………………………………………33

                                                           abstract

Almost every nook and cranny in nigeria is littered with sachet water nylon, popularly called “pure water”, as noted by edoga et al. (2008), about 70 percent of nigerian adults drink at least a sachet of pure water per day resulting in about 50 to 60 million used daily across the country. This has significant impact on the economy of nigeria. This study recommends that the pure water business should be allowed to thrive. This is because it provides employment for labour and profitable to the owners. The study further suggest that the pure water production should be encouraged in nigeria under a guided atmosphere such that non-registered pure water factories are not allowed to produce untreated water for human consumption, that the water source be subjected to periodic test by analysts and that pure water should be produced under hygienic condition that conforms with the standard required by the nafdac.

                                      Chapter one

                                      introduction

 

• Background to the study

Water has been identified to be very important to human existence because it is very necessary for survival.a reliable supply of clean wholesome water is crucial in an attempt to promote healthy living amongst the inhabitants of a well defined geographical region (mustapha and adam, 1999). In an attempt to proffer solution to water problem, it was estimated that 1.2 billion people around the world does not have access to clean safe water and about 2.5 billion people are not provided with adequate sanitation (third world water forum, 2003). Majority of the affected people that lack access to clean safe water and adequate sanitation are located in the developing countries because the standard industrialized global model for safe water delivery and sanitation technology is not affordable (gadgil and derby, 2003).

 

1.2 statement of the research problem

Narrowing down to nigeria, the supply or provision of public drinking water is not reliable (egwari and aboaba, 2002). As a result, this has adversely affected the good health of nigerians most especially during the dry season (adesunkanmi and ajao, 1986). In nigeria, ground water and pipe borne (tap) water are the major sources of drinking water. These sources are said to be unsafe sources of drinking water because findings indicated that ground water sources contain trace elements, dissolved solids and pathogens in excessive quantities that may be dangerous to the health of the people. Consequently, most of the investigations carried out on ground water samples from different parts of nigeria revealed that most of the available sources of water or water types are polluted or contaminated hence, were not fit for drinking purpose (ogunbanjo,2004 and tijani, 2003) cited in olaposi (2009) unpublished phd thesis. In addition, physical assessment of many public supplied pipe-borne water samples also testified to their poor quality.an example of locally developed alternative of safe water provision in nigeria is the drinking water sold in polythene sachets and plastic bottles. There are few studies on  the impact of pure water production on the economy of nigeria to employment creation, income generation and wealth creation, hence this study.

 

1.3 objectives of the study

The broad objective of this study is to assess the impact of pure water production on the nigeria economy with specific attention to nnewi north l.g.a of anambra state .

The specific objectives are to:

1. Analyse how pure water production has impacted positively on the nigeria economy
2. Assess the extent to which  pure water production has created income generation.

1.4 research questions

I.what are the impact of pure production on the economy of nigeria?.

Ii.has the production of pure water created income generation in nigeria?

1.5 statement of the research hypothesis

This study would be guided by the following hypothesis

1 ho.pure water production has not impact positively on the economy of nigeria.

Hi. Pure water production has impact positively on the economy of nigeria.

2 ho. Pure water production do not contribute towards economic development of nigeria.

Hi. Pure water production contribute towards economic development of nigeria

1.6 scope of the study

With the aim of examining the impact of pure water production on the economy of nigeria, pure water should be produced under hygienic condition that conforms with the standard required by agencies such as nafdac.

1.7 significance  of the study.

Most researchers in nigeria have not taken time to document the nature, production techniques and processes involved in pure water production as well as the impact of pure water production on the economy of nigeria, hence this study .the researcher examined the impact of pure  water production on the nigeria economy which include:provision of employment for labour,provision of clean and treated water among others.

1.8 limitation of the study

Some factors may limit the level of accuracy and reliability of this study. Factors include:

1. Difficulty in obtaining data
2. Low response rate from individual parties.

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