A critical analysis of the impact of insurance industry towards economic development of nigeria

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A CRITICAL ANALYSIS OF THE IMPACT OF INSURANCE INDUSTRY TOWARDS ECONOMIC DEVELOPMENT OF NIGERIA

ABSTRACT

Evaluation of the impact risk survey in the manufacturing firm in Nigeria. The research was aimed at evaluation the impact of risk survey in manufacturing firms in Nigeria with a case study of Emenite Limited which is the researchers’ topic, objective of this study is to determine how risk managers survey their risk and how it is being control in manufacturing firm, and also these underwriting consideration in risk survey. The research method used was design in a manner to ensure adequate representation of Emenite Limited in Enugu Research findings established that reduction in the volume of loss and increase in profit maximization are the important of risk survey in the manufacturing firms. Apart form the existing risk control in manufacturing firms, other various new risk controls should be adopted.

TABLE OF CONTENTS

Title page                                                              ii

Approval page                                                        iii

Dedication                                                             iv

Acknowledgement                                                  v

Abstract                                                                vi

Table of contents                                                    vii

CHAPTER ONE: INTRODUCTION

1.1       Background of the study                                         1

1.2       Statement of the problem                                3

1.3       Objectives of the study                                    4

1.4       Research question                                           5

1.5       Significance of the study                                         6

1.6       Scope and limitations of the study                     6

1.7       Definition of operational terms                                 7

CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.2      Brief history of Emenite limited                          10

2.3      Basic categories of risk                                     13

2.4      Concept of risk survey                                      15

2.5      Reasons for risk survey                                     16

2.6      The products offer by Emenite limited                18

2.7      Various risks exposed to Emenite as a company   19

2.8      Duties of a risk survey in a manufacturing firm    21

2.9      Factors to be considered in risk survey               22

2.10  The implication of risk survey in a manufacturing

firm                                                               24

2.11  Various method/strategies used in risk control     25

2.12  The legal frame work of risk survey                           29

2.13  The problems facing insurance industry in risk

control                                                           32

2.14  The prospects of effective risk management

in manufacturing firms                                    34

2.15  Challenges facing the insurance industry in

effective risk management                                35

2.16  Safety audit according to David (1989)               36

2.17  Important of safety audit in manufacturing firm   37

2.18  Advantages and disadvantages of risk survey

(according to Odoh 2003)                                 38

CHAPTER THREE: RESEARCH METHODOLOGY

3.1      Research design                                              40

3.2      Source of data                                                40

3.2.1                Primary data                                            40

3.2.2                Secondary data                                        41

3.3      Location of the study                                       41

3.4      Population of the study                                     41

3.5      Validity of the study                                                42

CHAPTER FOUR: SUMMARY OF FINDINGS

Summary of findings                                               43

CHAPTER FIVE: CONCLUSION AND RECOMMENDATION

5.1      Conclusion                                                      45

5.2      Recommendation                                             46

5.3      Suggestion for further studies                                  47

Bibliography                                                    49

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

Risk is integral to everyday life. Once we have said that risk is always at the centre of insurance. We should also understand that risk is at the centre of our life. This means that for every human endeavor there is ‘risk’ as a result of our different economic pursuits. According to David (2001) risk exists where the future is unknown. It represents both desirable events and undesirable event. It is a desirable event when one internationally initiates certain things in order to better his socio-economic well being. Because of these desirable and undesirable events, an organization will want to transfer their risk to an instance company, which thereby brings about risk survey.

According to David (1989) the prime object of a risk survey is to provide the underwriter with as complete a picture of the risk being offered as possible; to enable him decide whether the risk was acceptable and how it compared with the same kind and as the basis for deciding premium and other terms.

In the present day the surveyor is still closely concerned with provision of underwriting information and in many situations the information disclosed by the completed proposal form, will need to be supplemented by a surveyors report before the picture is completed. However, the surveyor is now more closely concerned with accident preventions, surveying represents one aspect of the wider subject of risk control. Moreover, practice varies among individual answers and there are no established criteria for surveying manufacturing firms. However, it may safely be stated that risks of unusual character or with special features will normally be surveyed in that firm. A safety or risk audit will be conducted.

A safety audit is a critical examination of an individual operation in its entirely to identify potential hazard and level of risk Audits are often undertaken by multidisciplinary terms individual members should have a good knowledge of legal requirements, an understanding of reasonable practice in the industry and above all the ability to communicate with at levels of personnel or department within the organization. In many companies, this expertise is not readily available and so audits tend to be undertaken by external specialist such as consulting engineers acting independently or employed by insurance companies. In a manufacturing firm like Emenite Limited. Risks that presents a serious injury/hazard are those where there are substantial involvement machinery(s) Reports from the Health and safety executive in Emenite limited however, shows that some 80% of accidents are not caused by machinery but by such simple things as falls, lifting heavy weight or defective hand tools.

Risk survey will thereby go a long way in boosting productivity in manufacturing firm via review of risk and it will also help to facilitate improvement in the work force of the company like Emenite Limited.

1.2     STATEMENT OF THE PROBLEM

For the purpose of this study, the researcher identified some key factors that will help in identifying the problem.

a.          There are various risk exposures in manufacturing firms

b.          The ways of handling such risk exposures have not been encouraging.

c.           Risk surveyors in manufacturing firms have not been living up to their expectations.

d.          There have been lots of bottlenecks in implementing the preferred recommendations.

e.          To know the role of surveys in identifying such risk and controlling the effects of the operation of manufacturing firms in Nigeria.

1.3     OBJECTIVES OF THE STUDY

a.          To find out the various risk exposure in manufacturing firms in Nigeria

b.          To find out various ways of handling such risks exposures in manufacturing firms.

c.           To find out the problems facing the insurance companies on identifying such risk exposures in manufacturing firms.

d.          To know the role of risk survey in manufacturing firms

e.          To make recommendations on how to improve the manufacturing firms through adequate risk survey tools by the insurance industry.

1.4     RESEARCH QUESTIONS

a.          What are the various risks exposures in manufacturing firm in Nigeria?

b.          How can such risks exposures be handled by the insurance industry in order to keep the manufacturing firms going?

c.           What are the problems facing the insurance industry in risk survey in manufacturing firms?

d.          What are the roles of risk surveying the manufacturing firms in Nigeria?

e.          What are the recommendations to improve risks surveys in manufacturing firms?

1.5 SIGNIFICANCE OF THE STUDY

This research work will be of immense help to:

The student: it will help the researcher to know more on the impact of insurance industry towards economic development of Nigeria.

The Stake holders: this study will be of great importance to stake holders as it will enrich their knowledge on the various risk in manufacturing firms.

Insurance company: this will equally be of help to the insurance companies and financial institutions in Nigeria because when they abide by the recommendations provided by the researcher it will help them in time of decision making.

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