THE ANALYSIS OF THE RELATIONSHIP BETWEEN PREMIUM AND CLAIM SETTLEMENT IN NIGERIA INSURANCE INDUSTRY (BETWEEN THE YEAR 2002-2012)
CHAPTER ONE
1.1 Background of the Study
The role of insurance in the economic development of the country is paramount and vital. In the observation of this fact, the federal government gave approval for the establishment of more insurance companies in the past century.
Ever since the establishment and formation of insurance industry, premium has been a vital tool for the contract of insurance to be effectively binding on both parties to the contract.
Premium is the monetary consideration passing from the insured to the insurer for the undertaking to pay the sum insured in the event of the risk insured against happening. It is a necessary element and ingredient in the formation of an insurance contract.
Insurers have table in rates of premium chargeable by them for each class of risk underwritten. In construction these tables, they are guided as far as possible by experience. The rates of premium ordinarily charged may be increased or decreased depending on whether the insured seeks a wider protection than that which the insurers are willing to provide for property similar to that for which insurance is sought of if the insured is prepared to accept a narrow cover or to comply with any special requirement imposed by the insurers.
On the other hand, when a person buys some product, his major or primary objective, aim or concern is whether that product will be fit for the purpose for which he is buying it. Most of the time, he would have satisfied himself by inspecting the product and that it is performing before eh actually pays for it.
But as far as insurance is concerned, there is no tangible product to test, what the insured purchase is just a promise to pay a claim arising after the purchase and consisted with the policy sold. The actual test therefore does to come until such a claim comes up from the insured or other party concerned. If the insured is satisfied, then he made a good bargain. But where however the insurer fails, the insured is disappointed. His disappointment may result in serious consequences to the insurer. The insured may feel so badly injured that he may resort to court action with its attendant bad publicity for the insurer. Therefore, an insurer will be regarded as good if he has a good reputation as far as settling of claim is concerned.
Meanwhile, claims settlement is a very vital issue that may cause dispute between the insurers and their policy holders, infact, most of the disputes that arise in insurance contact have to do with settlement of claims and “quantum” i.e. the amount to be paid. So an important factor that distinguishes a good insurance company is its claims settlement services.
It does not mean therefore that an insurer should be over liberal in order not to edge it’s self out of the market. Meanwhile, admitted genuine claims should be settled promptly for an insurance company to maintain a good public image and confidence.
1.2 STATEMENT OF PROBLEM
1. Poor relationship between premium payment and claims settlement in Nigeria insurance industry.
2. Inadequate knowledge of the effect of claims settlement on insurance practice.
3. Lack of proper management of premium payment by the insured.
4. Challenges facing insurance that hinders effective claim settlement in insurance business in Nigeria.
1.3 OBJECTIVE OF THE STUDY
1. To evaluate and analysis the relationship between premium payment and claim settlement in Nigeria insurance industry.
2. To determine if adequate premium payment will have impact on claim settlement in insurance industry.
3. To determine the role of premium payment will have impact on clam settlement in Nigeria insurance industry.
4. To find out and highlight problems facing insurance that hinders effective claim settlement in insurance business in Nigeria.
1.4 RESEARCH QUESTIONS
Based on the objectives of the study, the following questions were formulated:
1. Is there any relationship between premium payment and claim settlement in Nigeria insurance industry.
2. Is there any implication of inadequate premium payment on claim settlement.
3. Is there any role of premium payment towards claim settlement in Nigeria insurance industry.
4. Are there problems facing insurance practice that hinders effective claim settlement in insurance business in Nigeria.
1.5 RESEARCH HYPOTHESES
1. Ho: There is no direct relationship between premium payment and claims settlement.
Hi: There is a direct relationship between premium payment and claims settlement.
2. Ho: Adequate premium payment will not have any effect on claim settlement in insurance industry.
Hi: Adequate premium payment will have any effect on claim settlement in insurance industry.
3. Ho: Insurance Industry does not face challenges due to premium payment and claims settlement
Hi: Insurance Industry faces challenges due to premium payment and claims settlement
1.6 SIGNIFICANCE OF THE STUDY
THE STUDENT
It will serve as a secondary data for students who will carry out related research study in future.
THE STAKEHOLDERS
This work will review the activities of insurance companies as concerning premium payment and claims settlement.
THE INSURANCE COMPANY
The knowledge gained in this work will help insurance companies to know the effect of claim settlement on insurance practice.
THE COUNTRY AT LARGE
It will help the general public to know the effect and advantages of adequate premium payment on claims settlement growth and development of insurance companies.
1.7 SCOPE OF THE ST
NOT THE TOPIC YOU ARE LOOKING FOR?
Once payment is made, kindly send us your project topic, email address and payment name to +234 810 144 4147
Once payment is confirmed, Project materials will be sent to your email
Public authorities and central banks around the world are closely monitoring developments in digital currencies and studying their implications for the economy, the financial system and central banks. This lack of physical form allows nearly instant...
insurance with the view to arousing the awareness of thepolicyholders and prospective ones. This will be achieved by highlighting13the insurance mechanism, discovering the weak areas that need to bestrengthened and recommendations will be proffered f...
nsurance industry. The study adopts descriptive and analytical method of historical and time series data. The study was conducted to cover the period from 1986 to 2011 (twenty-five years). The secondary data used for the study was obtained from the C...
Appreciation of the topic to be discussed will not be fully attained if a brief historical review of the steel industry is not given. In the past, developing countries, Nigeria inclusive did not have a balance of economy and they ur...
At this time, the Nigeria government is intensifying efforts to boost the country’s economy, the need to research on the fact that led to economic growth in Nigeria cannot be understated. This study will aid our understanding of economic developmen...
It is common to report of business failing than business succeeding almost always, the failure or success of a business can be attributed to its management. When a business is mismanaged, it will lead to liquidation the company will not meet their s...
Due to the high level of illiteracy in the Nigerian society, many people are unaware of insurance policies. However, with the enactment of Insurance Decree[1], the awareness of insurance policies was enhanced. Thus, more people took steps to insure t...
In Nigeria the issue of taking life assurance policy has been neglected, in the sense that at this present time, it is estimated that not up to two percent (2%) of Nigerian’s own life assurance policies, from the research made on the internet, lif...
1.4 Research Question The following are the research questions: (1) Does Enugu State Pension Board pay pension regularly? (2) Does retiree suffers after retirement because of non implementation of gratuity? (3) What ...
Globalization means the whole world is becoming a global village, the world are coming together to be one in unity, things are happening generally people don’t produce to satisfy the market people around them, but they produce for the whole market....
Message Us on WhatsApp »
