CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Insurance has been existence as far as when the people of old realized the gratuity of financial losses.In actual sense, modern Insurance started in Nigeria in the 20th century with the opening of an agency in Lagos by the Royal Exchange of London in 1921. this company documented all the Insurance business in Nigeria until 1949 when three other.
British owned Insurance Companies joined the scene up till the time the country attained its political independence in 1960. There were about 25 Insurance Companies operating. All except three that were foreign owned. During this period demand for Insurance was dictated by the requirement of the foreign businessmen that brought their goods into their country or exported raw materials to their countries.
All technical matters including investments of found were handedly the expatriate from 1960, the rate at which insurance industries has grown extraordinary. Some of the Nigerian who has earlier on engages. In insurance business individually or group or in partnership with foreigner have now established indigenous insurance companies.
Prior to the incorporation of the first get of indigenous insurance company, effect of foreign insurance companies have under written insurance business in the country. The political independence facilitate speedily period of economic activities.
This led to the formation of indigenous or state owned, insurance companies.
FUNCTION OF INSURANCE
Many writers have extorted the insurance industry by describing its role in the task of natural development and reconstruction, but we will not be labour by listing all of all these functions.
Insurance provide guarantee to a person that their individual financial loses will be fairly and equitably distributed over the insured community or ground as a whole. By offering security to businessman and industrialist, insurance is said to directly and indirectly, protect business enterprises, more so insolvency monies are available to finance and replacement as lost and damaged asset, compensate employee a third parties for injuries sustained, even more willing to innovate and undertake high risk from production so that society is provided with wide range of goods and service. Insurance company serves as an effective vehicle for the mobilization of natural resources for the national development effort. Insurance company, like other companies is an important employee of labour. This provides job opportunities for the teeming population of this century and helping to solve unemployment problem.
INSURANCE IN NIGERIA
Organized insurance business has been known to be practiced in Europe countries many year ago, records who that such modern approach was not adopted in Nigeria until 1921 when the first insurance officers was opened in Lagos as an agent of the ROYAL EXCHANGE ASSURANCE OF LONDON and recommended in 1949. however by the mid sixties, in spite of the large number of indigenous companies which thus sparing up, their insurance market was controlled by a few foreign interest.
CONTRIBUTION OF INSURANCE TO GROSS DOMESTIC PRODUCT
The insurance company has contributed immensely to the Gross Domestic Products of this country through its financial of investment in Nigeria industries.
The provisions of finance for industry is significant to economic developments of their property investment are in industrial building.
More so, either directly or through subsidiary and association companies they engaged in leasing industries vehicle, machinery and specialist equipment.
They also provide some long-term loan to smaller firms.
Some offices have participated in the formation of specialist institution to provide finance for smaller firm and for the development of new products and process.
Also insurance company is a subscriber to the loan issue of the major institutions in that field, the industrialist and commercial financial corporation limited.
1.2 STATEMENT OF THE PROBLEM
Looking at the topics of the project “The impact of Insurance Companies to economic development in Nigeria” many problem or questions can quickly come to one’s mind. The research work will therefore examine the following pertinent questions. How can impact of insurance be felt and what are the nature and importance of insurance companies to economic development in Nigeria?
How can impacts of insurance companies be measured? Finally, the research work will examine different types of operations and economic significant.
1.3 STATEMENT OF HYPOTHESIS
This section attempt to that hypothesis that has already been put forward in chapter one.
Normally, a text procedure for the hypothesis testing will be chi-square i.e. (Co-E)2 and the level of significant of 5% will be used throughout the testing.
HYPOTHESIS ONE
Ho: There is no significance relationship between insurance companies and their meaningful contribution to the development of economy.
Hi: There is significance relationship between insurance companies and their meaningful contribution to the development of economy.
HYPOTHESIS TWO
Ho: There is no significance relationship between insurance company and their expectation client.
Hi: There is significance relationship between insurance and their expectation of their client.
1.4 PURPOSE OF THE STUDY
The growth of insurance business is a feature key of the modern would. It is a major risk management tool as well as a catalyst of development. In the layman’s language, insurance business can be described as a social device providing financial compensating for the efforts of a misfortune, the payment being made from the accumulating contribution of all parties participating in the scheme.
Insurance serve as safeguard against many risk to which capital fund is exposed. The burden of losses of entrepreneur in commerce and industry is also reduced by the insurance business.
Insurance also provides assistance to business venture. It provides confidence and security needed to businessmen venture into uncertain area of commerce and industry. Insurance plays a major role in the finance of overseas trade.
This will not possible if marine and export credit guarantee insurance schemes were not available. Insurance income accumulated over time in Nigeria investment, thereby encouraging the commercial and economic development of the country.
1.5 SIGNIFICANT OF THE STUDY
The economic significance of the study is the provision of security. In Nigeria, security was providing to an individual by his tribe or the claim, or extended family system. There was also age group, which provided security in various term. As it will be readily appreciated insurance companies protect the business interest of their insured, the policies offered to the public were those generally used by these foreign companies in their home countries.
When independence was achieved in the 1960’s insurance regulatory law were made and put into effect. The control regulations provided for such matter as capitalization, shareholder, margin of solvency, premium and public war dings investment of insurance funds, insurance, intermediaries and qualifications of those engage in insurance.
In everyday life for example, man and his worldly possessions are exposed to many types of risk as human being, we are exposed to the risk of accidents, being attacked by a deadly disease and death, our properties and possession are also exposed to damages that may arise from fire, accident
