THE ROLE OF INSURANCE COMPANIES IN THE DEVELOPMENT OF NIGERIAN ECONOMYABSTRACT
Insurance by nature, is not a modern day concept. It has a
development history of so many – centuries. The art of insurance has
grown as a result of individual, corporate bodies and government need
for the fortunes of lives and business. Therefore, the types and
classes of account were those which were expected to show to the
venturers, i.e. the owner of business, government and individuals.
It is based on this that the researcher, therefore, focused this
study on the role of insurance companies in the development of Nigeria
economy. Hence, the general objective of the study is aimed at
ascertaining the roles which insurance companies plays in the
development of Nigerian economy.
Thus, in chapter one, retrospective review of historical development
of insurance was carried out, this is following by the background of the
study, objectives of the study, research-question and scope of study.
Chapter two takes care of the literature review and was carried out
in seven-subheadings, evolution of modern insurance in Nigeria, the
fists that may be insured, classes of insurance, the Nigerian Insurance
Finally, chapter three really deals with the summary of findings,
which is based on the observations of chapter two. Then conclusion was
made on the entire research carried out.
TABLE OF CONTENTS
Table of content
1.1 Background of the study
1.2 Objectives of the study
1.3 Definition of terms
2.0 Literature Review
2.1 Origin of Insurance
2.2 Evolution of Modern Insurance in Nigeria
2.3 The risks that may be insured
2.4 Classes of Insurance
2.5 The Nigerian Insurance Market
3.0 Summary of Findings
3.1 Discussion of findings
Insurance is the modern means of protecting himself against losses.
It is the device, by which man is able to protect himself against risk.
In other words, insurance is the system where an insurance company upon
the receipt of a certain amount of money from a person, agrees to pay
compensation or render certain services, to the person, if, and whenever
that person suffers the kind of loss that was specified in the
insurance agreement. What this means is that insurance is the means by
which people can save money to take care of unforeseen dangers and
accidents. When a person agrees to take insurance, policy to protect
himself against certain accidents, he will pay a sum of money (which is
called premium) to the insurance company. Once the insurance company
(who is called the insurer) accepts that premium from the person who
intends to take insurance cover (such a person is called the insured)
the insurer has thus agreed to pay an amount of money (called claims or
compensation) to the insured whenever the insured loss occurs. This
agreement is usually contained in a document called a policy.
Premiums, that is the cost of purchasing an insurance, are not fixed
arbitrarily. They are usually calculated by insurance experts,
mathematicians called actuaries. High risks usually attract high
premiums. For instance, if a 20-year old man is taking a life insurance
policy, his premium will be much less than that of an 80-year old man
who insists on taking a life insurance policy.
Since insurance contract as may other commercial, activity. It is
these principles that make for its validity, insurance contract is
subject to the general principles of Nigerian Law not only does it
affect insurance, but it operates in every other commercial aspect of
life. They are as follows: offer and acceptance, consideration,
capacity to contract, legality, consensus ad idem (parties should be of
one mind) and intention to create legal obligation/ relations.
1.2 BACKGROUND OF THE STUDY:
Insurance did not emerge completely and perfectly, which in every
detail, but, it developed slowly over the centuries in order to satisfy
the needs of those concerned with the protection of individuals,
business, other organisation and governments.
Insurance which is believed to have originated from the ancient
practices of the inhabitants of the valleys of Rivers Tigris and
Euphrates in present day Iraq in about 400 BC rose to the earliest trace
of interest in modern insurance in England, dates to 1666AD. Up to the
Lloyd’s of London which occupies the central position in today’s global
insurance market, started as a small coffee house which was patronized
by merchants, bankers and insurance underwriters. Originally, Llyods
was the world’s dominant insurer of marine risks.
Although modern insurance started in Nigeria in the early part of the
20th century, historians and sociologists argue that what is today
known as insurance was totally alien to indigenous Nigerian culture.
Presently, insurance has grown to meet the increasing demands being
made on the practicing insurers. Following the historical development
of insurance, it should be observed that covers those risk affecting,
individuals, business organization and government as an insight into the
protection of risk and form of savings to the insured.
However, insurance has extended far beyond the actual protection of
risk, but is concerned with the development of Nigeria economy at this
1.3 OBJECTIVES OF THE STUDY:
The broad objective of this study is to know the roles of insurance
companies in the development of Nigerian economy. Bit it individuals or
corporate bodies, or government, the objectives of this study will help
the nation at large in knowing the roles all insurance companies play
in the country.
So also is the government who needs a good balance, of payment in the
country, in this process, the insurance companies plays a great roles
in their own part. By this process, the insurance companies are able to
do as long as they are able to utilize and carries the risks well and
also utilizes their financial resources properly. For them to do this,
is specifically for the objectives of the study which includes:
(a) The role of insurance companies in Nigeria
(b) The services of insurance companies to Nigeria
(c) The advantages of insurance companies
(d) To make recommendation based on findings,
(e) To create awareness of the importance of insurance to the public.