THE IMPACT OF MOTOR INSURANCE POLICY ON THE GROWTH AND DEVELOPMENT OF THE ECONOMY (A STUDY OF NICON INSURANCE)
ABSTRACT
This research work titled “The impact of motor insurance policy on the growth and development of the economy” Nigeria motorist are not embracing motor insurance policies and one of the objectives are to know why Nigeria motorist embrace motor insurance policies, and the scope of the study is NICON insurance motor Department, The information for the study was collected using primary and secondary methods of data collection. For the primary data collection, questionnaires, personal observations and oral interviews were used while existing literature relevant to the topic was consulted for the secondary data. The researcher used chi-square statistical model to analyze the data. The researcher gave a summary of the findings that Nigeria motorist are not embracing motor insurance policies and one of the recommendation is that people should know the reason why they are not aware of the compensation in motor insurance policies.
TABLE OF CONTENT
Title page i
Approval page ii
Dedication iii
Acknowledgement iv
Abstract vi
Table of contents vii
CHAPTER ONE
INTRODUCTION
1.1 Background of the study 1
1.2 Statement of problem 3
1.3 Objective of the study 4
1.4 Research question 4
1.5 Research Hypothesis 5
1.6 Significance of the study 6
1.7 Scope and Limitation of the study 6
1.8 Definition of terms 7
CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1 Historical development of NICON insurance 11
2.2 Historical development of motor insurance
company in Nigeria 14
2.3 Types of cover available in motor
insurance underwriting 16
2.4 Underwriting and rating, of motor insurance 20
2.5 Pricing of insurance products 28
2.6 Cover available in motor policies 29
2.7 The underwriting procedure of motor insurance
Policies 31
2.8 Motor insurance claim procedure 35
2.9 Problem facing underwriting and rating
of motor insurance in Nigeria 35
2.10 Suggested solution to the problem of motor
insurance underwriting and rating 38
2.11 The prospects of prudent underwriting and
rating of motor insurance in Nigeria 39
2.12 Recent development in Nigeria motor
insurance practice. 41
Reference 45
CHAPTER THREE
RESEARCH METHODOLOGY AND DESIGN
3.1 An overview 47
3.2 Sources of data 47
3.3 Population of the study 48
3.4 Sample size 48
3.5 Instrument used for the study 50
3.6 Validity and reliability of the instrument 50
3.7 Method of data presentation and analysis 50
DATA PRESENTATION AND ANALYSIS
4.1 An overview 52
4.2 Data analysis 52
4.3 Testing of Hypothesis 64
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Summary findings 72
5.2 Conclusion 73
5.3 Recommendations 74
Bibliography 75
Appendix 77
Questionnaire 78
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Before now, motorist, were at liberty to drive their cars on the public highways without any form of insurance. However, as the number of cars multiply on the highways rate of accident injured and death also multiple. Hence, the need for motor insurance.
The first country that gave a lead in this direction was the great Britain. Other countries have the Traffic Act at 1930, introduced a compulsory insurance. The Act made it an offence for anyone to use or permit the use of a meter vehicle on a read unless there is in force a policy of insurance covering the liability of the motorist against death or motor accident.
The idea of compulsory insurance was recognized quite early in west Africa and British legislation on the subject was extended to the four west African British colonies, Nigeria, Gold Coast, Sierra Leone and Gambia, each of these territories now has it own specific legislation on this subject.
Modern insurance was introduced in Nigeria by European trading companies which establish trading post in Nigeria and their companies were appointed agent for insurance business by British companies in London Later, Nigeria traders and merchant of substantial status where given power to secure insurance business issues cover meters mostly on cargo and assistance in settlement of claim.
As a result of this progress, Royal exchange Assurance branch office was established in Nigeria in the year 1921 and this company dominated insurance business for almost thirty years before the establishment of other companies such as provincial insurance company, nor which union, fire insurance company and Nigeria General insurance company limited to mention but a few – the incorporation of Nigeria into the Board Traffic Act by the British Parharment in 1945 imposed a statutory obligation on the users of motor vehicle to provide security against their legal liability for causing death of or bodily injury to the third parties.
Thus, the study is meant to evaluate the impact of motor insurance policies on the growth and development of the economy. Looking of NICON insurance company as a study.
1.2 Statement of the Problems
1. Nigerian motorist are not embracing motor insurance policies.
2. People are not aware of the compensation in motor insurance policies.
3. Nigerian motor and third parties have not actually felt the impact motor insurance policies.
1.3 Objective of the Study
The following are the objective of the study.
1. To know why Nigeria motorist embraced motor insurance policies.
2. To create awareness of the compensation motor insurance policies.
3. To ensure that the Nigeria motorist and third parties actually felt impact of motor insurance policies.
1.4 Research Question
1. Have Nigeria motorist been embracing motor insurance policies.
2. Are people aware of the compensation on motor policies.
3. Have Nigeria motorist and third parties actually felt the impact of motor insurance policies.
1.5 Research Hypothesis
Hi: Nigeria motorist have been embracing motor insurance policies.
Ho: Nigeria motorist have not been embracing motor insurance policies.
H2: people are not aware of the compensation in motor insurance policies.
Ho: people are aware of the compensation in motor insurance policies.
H3: Nigeria motorist and third parties have not actually felt impact motor insurance policies.
Ho: Nigeria motorist and third parties have actually felt impact motor insurance policies.
1.6 Significance of the Study
The study will be essential to the insurance industry as it will premium in meter insurance.
It will also be useful for the students and future researcher on related topic as it will serve as a background or reference material for further studies.
1.7 Scope and Limitation of the Study
The scope of the study is NICON insurance motor department.
LIMITATION OF THE STUDY
In the process of carrying out this research work, some difficulties were encountered, these include:
TIME:- The time factor come to play due to the fact that the time researcher’s disposal is limited to carryout a study that will cover the entire country.
FUND:- The researcher is a student and lack the much needed fund to finance a wider study.
SYNDROME OF CORPORATE SECRECY:- Some staff of the organization visited the reluctant to provide necessary information.
1.8 Definition of Terms (Operational)
1. Premium:- The payment made for the protection from a loss.
2. Beneficiary:- A person designated by the insured to receive the benefit.
3. Insurable Interest:- It exists when beneficiary has reason to desire continence of the insured person or property and would suffer economic loss by death or destruction of, or injury or damage to such subject matter.
4. A Broker:- Some or company registered at under insurance brokers As of 1977, who act as an intermediary between two other partners in a purchase sale transaction. He advice on and arranges, the purchase of insurance cover.
5. Indemnity:- To put insured in the position he was immediately before the occurrence of the insured peril.
6. Insured:- The buyer of the insurance policy.
7. Insurer:- The insurance companies of the reinsurance companies that sells the insurance policy.
8. Insured peril:- These are the perils which are specifically insured in the policy.
9. Risk:- The uncertainty of a loss.
10. Agent:- They work the insurance companies and promote their interest. They introduce business to the insurer.
11. Utmost God Faith:- Dealing with an honest mind with the insured and making oneself reliable.
12. Intermediaries:- Severs of and advisors on insurance who are not employed by an insurance company.
13. Peril:- A contingency or for tuition happening which could cause losses.
14. Proposed from:- Questionnaires prepared by an insurer to elicit details about proposed insurance cover.
15. Portfolio:- The entire collection of insurer’s assets and liabilities.
16. Pure Risk:- Situation were unknown future outcomes involves losses.
17. Policy form:- document setting down in writing the agreement between the insured and the insurer.
18. Endowment:- Life insurance policy benefit on survival to maturing only.
19. Commission:- Payment to intermediaries (Agents and Brokers).
20. Brokerage:- Fee paid to broker who arranges reinsurance cover for a ceding cover.
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