ABSTRACT
Sometimes
in 1999, some sector of the Banking Industry began to advocate the adoption of Universal
Banking (UB). As the argument for and against the introduction ranged on in
conferences and workshops, the CBN had to succumb to the pressure from the
proponents of Universal Banking by giving approval for the introduction of
Universal Banking. Fears have been expressed over the introductions of
Universal Banking. These fears appear to be harboured by insurance who hold the
notion that Banks are only coming to disturb their seemingly exclusive
business. Some people, including the insurance experts have however, dismissed
these fears, stressing that the phenomenon would rather boost Insurance
business and make the practitioners sit up for real competitive insurance
marketing and sales. In the light of the above, this research work seek to look
at the Impact of Universal Banking on the Insurance Industry. To identify the
problem that could arise there from and to proffer solutions to the problem.
Universal Banking is a multi-purpose banking which removes the restrictions
between commercial banking merchant banking, and insurance market such that a
banking institution can offer integrated financial services in one stop centre.
The principal research instrument used is the questionnaire. The case study is
the first ten insurance companies on the rating of the Nigeria Reinsurance
Corporation of Insurance Companies in Nigeria, based on their asset base. The
study population consists of the management and senior staff of the case study.
Ten questionnaires were given to each of the case study making it a total
population of 100 workers. Since the total population is known we used
Bourley’s formular to determine the sample size of 80. The data were analysed
using likert scale statistical model. The hypotheses were tested using Z-score
test. The result showed that Universal Banking will have tremendous positive
impact on the insurance industry. It is strongly believed that the introduction
of Universal Banking is good to the bettered image of insurance industry in
Nigeria. Universal Banking will improve the service delivery in the insurance
industry. The banks are popular, with banks transacting insurance business the
insuring public will be rest assured of the settlement of their claims. The
work equally showed that the long standing insurance unawareness in the country
will be broken down by Universal Banking and Insurers will stand to gain more
clients.
CHAPTER ONE
INTRODUCTION
1.1 Background of the study
In choosing any project, there must be the consideration of several
factors, the most prominent of which should be the end-user value. The need
should have arisen for the user to look out for an external help, such need
could be a more reliable and comprehensive information concerning Universal
Banking system.
Ever since creation, there has been a continuous quest for man to improve
his well being through his relations to the problems and challenges posed by
his environment. Tools upon tools have been fashioned and defined by man to aid
him in conquering these problems and challenges posed by his over crowded and
pressurized work and leisure environment.
In the developed countries of the world, the Universal Banking system has
been operating for almost a decade now. In Nigeria, it is a new innovation in
the Banking and Insurance industries. Since January 1, 2001 when the central
Bank of Nigeria approved the “Financial Supermarket” system, merchant bankers
who fought and won the battle may have started counting their chicks even
before they are hatched. And it is expected that their fortunes will be
enhanced soon after. Proprietors of merchant banks had complained that the
unequal playing field in the
The news of Universal Banking ha caused some uneasiness in some quarters,
notably, the Insurance industry. Although the proponents of government policies
and the promoters of universal banking have assured the insurance industry that
they have nothing to worry about. However, it does not really accord with sound
reasoning that the insurance industry will remain the same after the
introduction of Universal Banking (Nwite 2004).
The full impact of Universal
Banking on insurance remains a matter of conjecture since the policy has just
been newly introduced in Nigeria. Scarcity of detailed information on Universal
Banking has not really helped matters. However, a report on universal banking
has to do with the dismantling of functional barriers in the financial service
delivery thereby granting each bank the right to decide to engage in any
financial service from a wide range of service such as accepting deposit,
lending, trading in financial instruments, foreign exchange transactions,
underwriting of debts, equity issues brokerage, investment management and
insurance. In order words, a bank can be a jack of all trade (financial
services) whatever effect this will have on the banking industry is up to
bankers to appraise. What bothers the researcher and warranted this write up is
the need for us to be told what impact Universal Banking will have on the
insurance profession and industry.
Take the often recycled arguments that are anchored on banks increased
capital base for insurance. It has often been said that Universal Banking is
the only way by which the huge capital investment of the banks could be
justified. This will make sense if we fail to remember that the N500m capital
base was considered the minimum for a bank to carry out the present functions
they are performing. It was felt that the capital base of the banks were too
small in comparison to the total deposits that they receive from the public.
But now that they have increased their capital base to N25b it will no longer
form a negligible ratio of the total deposit that they receive from the members
of the public. The current capital base is the minimum they should hold to
carry on with their present specialist banking services. Bankers have boasted
that their huge capital base will boost public confidence in insurance. No
insurance literate person will wait for bankers to engage in insurance before
having confidence in the efficacy of insurance products.....
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Item Type: Postgraduate Material | Attribute: 113 pages | Chapters: 1-5
Format: MS Word | Price: N3,000 | Delivery: Within 30Mins.
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