ABSTRACT
This project work has critically highlighted the compact of claims settlement on profit maximization in insurance industry, the problems of effective claims settlement in Nigeria have been identified and how they can be controlled is also included in the study. Also circumstances given rise to claims, fraudulent claims and effect of inflation on claims settlement have been discussed and ways to solve them are indicated in the study. This study also examines the lapses and recommends some viable points that can also contribute to the image of the industry. In conclusion for effective claims settlement to arise, the insurer and the insured must agree as to the actual amount to be paid in the event of claims taking into consideration the principles and the risk guiding the handling of insurance claims.
TABLE OF CONTENTS
Title Page i
Approval Page ii
Dedication iii
Acknowledgement iv
Abstract v
Table of Content vi
CHAPTER ONE: INTRODUCTION
1.1 Background of the Study 1
1.2 Statement of Problems 6
1.3 Objective of the Study 8
1.4 Research Question 9
1.5 Hypothesis 9
1.6 Significance of the Study 11
1.7 Scope of Limitation of the Study 12
1.8 Definition of Terms 13
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Introduction 16
2.2 Classification of Insurance 17
2.3 Principles of Insurance 22
2.4 Notification of Claims 24
2.5 Investigation of Claims 24
2.6 Circumstances given rise to Claim 25
2.7 Claims Report 26
2.8 The Problems, affecting effective claims settlement
in Nigeria 26
2.9 Negotiating an Insurance Claim Settlement 28
2.10 Negotiating Your Car Accident Insurance Settlement 31
2.11 How to Claim Life Insurance Settlement 37
References 40
CHAPTER THREE: RESEARCH DESIGN AND METHODOLOGY
3.1 Research Methodology 41
3.2 Research Design 41
3.3 Methods and Sources of Data 42
3.4 Population 42
3.5 Sample Size 44
3.6 Sample and Sampling Technique 45
3.7 Instrument for Data Collection 45
3.8 Data Analysis Method 45
CHAPTER FOUR: SUMMARY OF FINDINGS
4.1 Findings 46
4.2 General Analysis of Questionnaire Distributed 46
4.3 Testing of Hypothesis 55
CHAPTER FIVE: CONCLUSIONS AND RECOMMENDATIONS
5.1 Conclusions 57
5.2 Recommendation 58
Bibliography 60
Questionnaire 61
1.1 BACKGROUND OF THE STUDY
National Insurance Corporation is a corporation brought into being on July 1, 1968 by Cap 263, Laws of the Federal Republic of Nigeria (LFN) of 1990 as amended (hereunder referred to as NICON Act). NICON Assurance Plc was incorporated on Oct 2001 and a private treaty which became effective in October, 2001. NICON Assurance Plc acquired the business (assets and liabilities) of national Insurance Corporation of Nigeria (NICON or the corporation). This acquisition is to the extent, to set out the transaction and in exchange for which 1,000,000,000 shares of NICON Assurance Plc was issued to the ministry of finance in corporate as the sole shareholder of NICON. The name was changed to NICON insurance Plc.
NICON on creation by law had initial share capital of two million naira divided into 20,000 ordinary shares of N100 each to be held exclusively by the Federal Government of Nigeria. Since then, the share capital of the corporation has been increased several times through capitalization of profits. Federal Government’s shares held are on its behalf by the Federal Ministry of Finance incorporated, the federal government’s investment vehicle.
The corporation’s share capital now stands at one billion naira divided into 5000,000 ordinary shares of N200 each. Under the NICON Act, the minister can increase the share capital without limit subject to the approval of the Federal Executive Council.
Today National Insurance Corporation of Nigeria carries out its business under the style and the name of NICON Insurance Corporation.
Prior to the establishment of the national Insurance Corporation of Nigeria (NICON), the Insurance industry was largely made up of foreign owned insurance companies whose business operations did little to foster the economic and social development of the country. Furthermore, before the enactment of the Company’s Act 1968, like most foreign companies, they operated as branches of their parent companies, which were invariably domiciled abroad.
NICON was created in order to break the domination of the Nigeria insurance industry by foreign companies were remitted abroad, thereby putting a let of pressure on the country’s balance of payment. In 1962, an adviser to the Federal Government of Nigeria on insurance matters submitted a feasibility report on the benefits of insuring export-bound Nigeria agricultural produce. This found the basis of subsequent deliberations and recommendations on the formation of an indigenous government owned insurance company with the encouragement given to developing nations by United Nations Committee on Insurance Companies urging them to seek considerable economic independent by investing directly in critical sectors of the economy such as banking and insurance. At the request of the government of Nigeria an insurance expert was send by the United Nations to provide technical assistance. The establishment of a government-owned Insurance Corporation was recommended. It was envisaged that all operating insurance companies in the country would be compelled to cede ten percent (10%) of their risks to the proposed government owned insurance company in the first phase of the corporation’s development. The second phase of the corporations operations was expected to vest in the corporation of the sole right to insure government properties by which time it was believed, the corporation would have acquired by the requisite technical and administrative skills and some experience in re-insurance.
However, NICON was by stature at inception given the sole right to provide insurance cover for all government asserts statutory corporations and state owned companies and with the powers to under-take re-insurance business.
