ABSTRACT
Performance of an economy
determines the position of the particular nation in the world. The better the
performance of an economy and the large economic resources it holds, the higher
the level of influence of such country in the entire world. There are many
sectors of human endeavor that form the economic chain of a nation. Among these
human activities or commercial activities are oil and gas, manufacturing and
construction, education, Banking, Insurance etc. Among these activities,
insurance sectors of the economy were examined in order to be refining tune.
Insurance sector of the Nigeria economy has witnessed doldrums for the past
three decades. Recapitalization of insurance sector of the economy was ventured
into to determine whether such a process can be one of the sound instrument to
refine tune the Nigeria economy. A lot has been gained from the
recapitalization process of insurance sector and the process has resulted into
a success.
The research method used is
survey. The sources of data were analytical and descriptive. This focuses on
the measurement of the insurance sector’s asset against the Gross Domestic
product and the problems that could be encountered during the recapitalization
process.
Data obtain from the analysis
of the secondary sources is from 2006 edition of statistical bulletin published
by the Central Bank of Nigeria, revealed that asset value against Gross
Domestic Product (GDP) from 1987 till 1993 were progressing with (GDP) of the
nation on a high side where as from 1994 till 1998 the value of asset were
retrogressing with a little difference in the Nation GDP.
Recommendations were made to
the way forward which includes;
-
Government should provide favourable and
enabling environment, like good policies to enable insurance industry perform
efficiently.
-
Seminars, conferences and workshops should be
organized by insurance regulatory body to educate insurer ethics of the
profession.
-
NAICOM should stick to the various rules and
regulations guiding the consolidation process and review from time to time the
needed and required policies.
CHAPTER
ONE
1.0 INTRODUCTION
Government reforms in the
insurance industry through the current process of recapitalization and
consolidation are to restore confidence of the public in the market and enhance
international competitiveness of local operators.
Consequently, the principal
objective of the reform is to have emergence of bigger and stronger players in
the industry with enhanced capacity. The Nigeria insurers in time past had
operated on marginal scale and that accounted for the reason why the market had
not benefited much, especially in the oil and energy business. The country is
much more likely to experience sustained growth if her insurance market
develops properly.
Insurance market development is
related to improve financial sector performance and insurance markets do not
develop adequately without both public and private sector development in their
infrastructure. The reform is made to develop an insurance sector that drives
and protects the economy through effective and efficient market structure.
1.1 BACKGROUND
OF THE STUDY
Today the insurance industry
consists of 103 insurance companies, five Reinsurance companies and 350
insurance brokers in Nigeria. The industry has underperformed its role in the
financial sector of the economy when compared with its counterparts in other
parts of the world.
The history of insurance
business can be liked to the olden days. Before the advent of the British
merchants in Nigeria, there was no organized insurance business as we know it
in recent days. But, there existed some traditional system of risk sharing,
which could be described as crude or primitive forms of mutual and social
insurance schemes. Age grade association, extended family system, town or clan
unions were some of he mutual insurance-like schemes for showing benevolence to
their members who had suffered some misfortunes such as death, ill-health, fire
ravages or court cases.
However, it was these British
merchants who established trading posts, on west coast of Africa that
introduced modern insurance business into Nigeria in the 19th
century. They arranged insurance for their trading concerns on the London
insurance market. By 1900, at least two insurance companies were known to have....
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