INSURANCE COMPANIES AND THEIR IMPACT ON ECONOMIC DEVELOPMENT OF NIGERIA

ABSTRACT

Business produce goods and services to satisfy the demand of customers. Much as these businesses declare profit year-in-year-out, they also face element of risk and uncertainties that may causes losses. This includes fire, theft, damage by artificial or natural agents and so forth. The business men in the olden days engage into economic activities with pessimism and fear of incurring losses. This inhibits large scale production which is capital intensive. However, with the advent of the insurance business, things improved for the between, as business men become encouraged to commit more of their resources in production activities, knowing fully well that the insurer will reimburse item in the event of damage or loss. Simply put, insurance is a contract of utmost good faith in which the insurer will pay compensation to a policy holder for loss or damage of insured items.

Meanwhile, the practice of insurance has become a lucrative business in itself, such that it contributes enormously to the national development in items of employment opportunity provision as well as Gross Domestic Product (GDP)

Thus, the interest of the research is aroused to carry out a study in this important, yet neglected sector of the economy with a view of sensitizing the students, business men and the entire public of the benefits derivable from the insurance business. The public policy makers shall be intimated as to the areas that require further regulations and or deregulations.

The researcher therefore employed and secondary sources of data collection in order to do justice to the topic. Chi-square technique of data analysis was used to fully digest the sourced information. This technique is quantitative and its choice was informed by its ability to give a pictorial view of the research findings numerically. Similarly, NICON insurance company was the focus as a case study.

The most important among the research findings include the lack of awareness on insurance issues by the teaming Nigerian populations, minimal coverage of the industry’s activities in such important sector as health and agriculture, lack of adequate government as well as private sector participation in insurance business, death of professionally qualified staff operating with the industry to boost the confidence of patronizers; vague and intricate operational mechanism and of course public suspicion about the sincerity of purpose with which the insurance business is dispended, the researcher, hence, proffered such remedial recommendations as infusion of deep sense of professionalism by practitioners in the industry with a view to fostering public confidence, inclusion of insurance training in schools curriculum right from secondary to post secondary institutions as mandatory especially for science students, sponsored programmes on point and electronic media outfits on insurance matters, increased government participation and deregulation of stringent rules barring the engagement of private sector into insurance business and up-front settlement of genuine claims as they fall due.

 

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