THE IMPACT OF CLAIM SETTLEMENT IN SHAPING THE IMAGE OF INSURANCE INDUSTRY IN NIGERIA
(A STUDY OF SELECTED INSURANCE COMPANIES IN ENUGU STATE)
By
EKEADA ROSSLINE OLUCHI
Presented To
Department of Insurance
ABSTRACT
The research is based on the impact of claim settlement in shaping the Image of Insurance Industry in Nigeria. A Study of Selected Insurance Companies in Enugu State. The three aspect that threaten or serve as image problems to insurance industry are product packaging product distribution and claim settlement. The overall objective of this study is to ascortaion how claim settlement helps in shaping insurance product in the global market, also to known the challenges facing the insurance industry and the time of claims and finally the way out. That is the procedures for claims settlement and how disputes can be resolved on claims settlement are part of the research work. The researcher made use and both primary and secondary data in carrying out the study. In the course of carrying out this project questionnaires were administrated to some selected insurance companies all in Enugu state. The responses gotten from the respondents were analyzed using the chi-square. The findings indicate that insurance industry in Nigeria are effectives in settlement of claim that is there is an improvement/increase in demand of insurance as a result of claim settlement, some challenges are encountered including misrepresentation (frcudulent). Non disclosure, failure to give notice of loss, failure to give particulars of loss etc. the researcher concludes that there is need for improvement in claim settlement to change it image for better tomorrow she recommended that if the industry put the listed above into consideration there will be more improvement in shaping the image of insurance industry in Nigeria/Even in the global market generally.
TABLE OF CONTENTS
Insurance is a safe-guard against risk Any device cumed at reducing the chances of a risk occurring, when it happens, reducing the extent of it’s damage and providing the affected persons with compensation is a form of insurance (Enwerezoir COR (2000))
Insurance as a modern concept for solving risk related problems depends on co-operation of a large number of people for it’s success This is the basic fundamental of insurance (Udeze JO(2005)
But what are the reasons for insurance?
111 Primarily, insurance guarantees that the insured will be indemnified or compensated in the event of insured risk happening
112 The fact that one is insured gives one a fooling of security, peace of mind and confidence to enable him devote his time and skill to his area of specialization for the overall improvement of the natural economy
113 The world economic system would obviously grind to a half there had not been an institution like insurance It closely follows trade and commerce giving helping hand in time of distress
114 Investment of insurance companies help to finances new protects and there by create employment opportunities for job seekers, and also increase national wealth
115 Employments affected by insurance institution help greatly to ease the unemployment problem in the country
116 Insurance guaranteed may be needed before award of certain types of contracts
As we know, an insurance company acquires an image through how it’s policy holders claimants and other persons who associate with the company view it’s activities and relationship with Mordi (1999) the image which an organization has is a matter of perception of the viewer The perception itself is the result of objective and subjective factors from the point of view of the observer association with the organization under consideration
Mordi while image taker are specific persons, institutions and industries Image of industries does not emerge suddently, it develops overtime the poor image of insurance in the country is as a result of people’s impression of the way insurance transactions have been handle since modern insurance practice was introduced in the country (Mordi 1990) has identified three aspects of insurance as the sources of image problem in insurance and they are production packaging
• Product distribution and
• Claim settlement
This study will deal with the last aspect claims settlement
Ozer (2000) Claim is a demand made by an insured to the insurer for a loss suffered by former (insured) under an insurance policy Afb Making preferring on claim under a policy the insured then becomes a clamant
The taste of a good insurance transaction lies in the manner in which a claim is handled This is why it is referred to as the acid test for insurance most of the disputes between the insurers and their policy-holders arise from claims settlement and it is the area that in fringer more on the image of an insurer and the insurance industry as a whole
The following statement portray the feeling of people towards insurance
• They are qukk to collect but slow to pay
• Insurance agents are the bad eggs that should be eliminated They prevent on you into paying your premium but fail to pay claim when due
• They are more interested in the premium they collect than the settlement of claims
• Insurance companies in Nigeria are selfish lots They expose clients to unnecessary embracement when it comes to collecting claims In the face of these allegations, the insurance industry has a great task of reshaping it’s already battered image The problems poiot to the need for effective communication Public enlightenment regarding insurance staff motivation which impact on quality of service delivery, effective supervision and control of insurance industry to ensure elimination of the bad eggs, adequate capitalization of insurance and education In fact the insurance industry should make concerted efforts to deal with it’s image problems
12 STATEMENT OF THE PROBLEMS
Insurance as we know is the sale of promise that is it is sale of intangible product This creates the need to explain on a personal contract basis
We will also probe into the problem responsible to bad image of insurance industry in Nigeria and why everybody complain of bad image of insurance It has been not iced that policy-holders consistently talk of poor claim industry in Nigeria which result to nonpayment of claim
• Poor funding by the shareholders insurance industry in Nigeria
Education of an average Nigeria on the scope functions and limitations of the insurance contract is very low The effect is that there is consistent misconception
It has become evident that persistent inflctionary rate in the economy also affect the standard of living of the people, which is turn discourages saving and any form of insurance can tract
13 OBJECTIVES OF THE STUDY
The board objective of the study is to find out the impact of claim settlement in shaping the image of insurance industry in Nigeria While the specific objective are as follows:
131 the study will help us to know what bring poor image to insurance industry
132 to find out such areas of disagreement between insured and insurance company during claim settlement
133 to identify the problem facing claim settlement
134 To know the problem facing insurance industry
14 RESEARCH QUESTION
The relevance of these question to the research is to enhance solution to the problems at hand in the form of scientific enquiry also it is a need and how this need is to be satisfied the following are the possible question based on the research topic
141 does misrepresentation of fact affect insurance claim settlement?
142 What are the problem associated with claim settlement
143 To know extent does notification of loss claims settlement?
144 How effective is the claim procedure in Nigeria insurance industry
15 RESEARCH HYPOTHESIS
The possible hypothesis is basically on Null and alternative basis
The hypothesis are as follows:
Ho: Misrepresentation of fact does not affect the insurance claim settlement
Hi: Misrepresentation of fact affect the insurance claim settlement
152 Ho: claim procedure is not effective in Nigeria insurance industry
Hi: Claim procedure is effective in Nigeria insurance industry
153 Ho: Insurance company is expected to pay at the end of the policy period for the loss caused by policy holders nosligence
Hi: Insurance company is not expected to pay at the and of the policy period for the loss caused by policy holders nosligence
154 Ho: Insurance company does not pay claims when it becomes necessary or due
Hi: Insurance company pays claim when it becomes necessary or due
16 SIGNIFICANCE OF THE STUDY
161 To enable insurance industry to improve on it’s claims handling techniques
162 It will enable the insuring public to understand the problems facing insurer in settling claims in fraud prone environment
163 It will help and improve insurance marketing
164 Thereby incrasing sales of insurance product
165 It will help in increasing market shares resulting in economic growth and development
17 SCOPE AND LIMITATION OF THE STUDY
The scope are selected insurance companies within Enugu state
There are some limitation of the study
Illiteracy: These can be seen as a problem where by the significant percentage of the people living in a geographical area can neither read nor writs it is very difficult for the researcher to ascertain the rightful information he wants
Beavrecracy: Another things that deliminate the research are provinces records, statistical data also secrecy
Attitude of the respondent: Another things that deliminate the research is the attitude of the respondent towards insurance How they see it and their thought towards it
Ignorance: It is also a problem in the sense that some people misconstrue the researcher as government tax agents gathering information to be used assessing respondents for tax purpose This has made then either to give false information or to withhold information completely there by making research work very difficult
Secrecy: People dislike activities that appear to be probling them They tend to avoid researchers they fael their activities which are not moort for public consumption would be exposed through research work So these is also one of the problem a researcher face
Death of statistical data: Most of the data required by researcher are not readily available even where they exist they are very relable and current Most data are obsolete and this has lod to situations where decisions and taken without sufficient data to back them up These is also a major problem a researcher face
18 Definition of operation terms
181 Arbitration: An alternative to litigation for the settlement of disputes
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ABSTRACT
CHAPTER ONE
INTRODUCTION
11 BACKGROUND OF THE STUDY
12 STATEMENT OF THE PROBLEMS
13 OBJECTIVES OF THE STUDY
14 RESEARCH QUESTION
15 RESEARCH HYPOTHESIS
16 SIGNIFICANCE OF THE STUDY
17 SCOPE AND LIMITATION OF THE STUDY
18 Definition of operation terms
REFERENCES
CHAPTER TWO
REVIEWS OF RELATED LITERATURE
21 AN OVERVIEW
22 MEANING OF CLAIMS
23 REASONS FOR CLAIM SETTLEMENT
24 VARIOUS WAYS OF CLAIMS SETTLEMENT VARIOUS CLASSES OF INSURANCE EG GENERAL AND LIFE
241 MARINE CLAIMS
242 FREIGHT CLAIMS
243 CLAIMS SETTLEMENT IN MOTOR INSURANCE
244 CLAIMS SETTLEMENT IN FIRE INSURANCE
245 CLAIMS SETTLEMENT IN PROPERTY AND PECUNIARY INSURANCE
246 CLAIMS SETTLEMENT IN LIABILITY INSURANCE
251 ROLE OF UTMOST GOOD FAITH IN CLAIM SETTLEMENT
252 THE ROLE OF INDEMNITY IN CLAIMS SETTLEMENT
253 THE ROLE OF INSURABLE INTEREST IN CLAIM SETTLEMENT
254 THE ROLE OF PROXIMATE CAUSE IN CLAIM SETTLEMENT
26 THE PUBLIC COMPLAINT ON CLAIMS SETTLEMENT
27 THE STAND OF INSURANCE COMPANIES IN CLAIM SETTLEMENT
28 PROCEDURES FOR CLAIMS SETTLEMENT
29 FACTORS THAT CAUSE DISPUTES IN CLAIMS SETTLEMENT
210 THE VARIOUS WAYS DISPUTES ARE RESOLVED
211 THE ECONOMIC SITUATION ON CLAIM SETTLEMENT
212 VARIOUS CONDITIONS REGULATION CLAIM SETTLEMENT
2121 AVERAGE CONDITION
2122 SPECIAL CONDITION OF AVERAGE (SCR)
2123 THE TWO CONDITIONS OF AVERAGE
2125 CONTROL OF CLAIMS AND SUBROGATION CONDITION
2
126 ARBITRATION CONDITION
2127 APPLICATION OF LIMITS OF INDEMNITY
213 FACTORS TO BE OBSERVED BY THE INSURANCE AND INSURERS
214 REASONS WHY COMPANIES USE ARBITRATION
215 THE FUNCTIONS OF INTERMEDIARIES IN CLAIM
216 THE PROBLEMS OF EFFECTIVE CLAIM SETTLEMENT IN NIGERIA
217 THE PROSPECTS OF EFFECTIVE CLAIM SETTLEMENT IN NIGERIA
218 THE CHALLENGES FACTING EFFECTIVE CLAIM SETTLEMENT IN NIGERIA
219 THE DUTIES OF A CLAIM MANAGER
220 REASONS FOR GIVING OUT CLAIM FORM
221 CONTENTS OF A TYPICAL CLAIM FORM
REFERENCES
CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
30 AN OVERVIEW
31 RESEARCH DESIGN
32 SOURCES OF DATA
321 PRIMARY SOURCE OF DATA ORAL INTERVIEW
USES OF QUESTIONNAIRE
322 SECONDARY SOURCE OF DATA
33 LOCATION OF THE DATA
34 POPULATION OF THE STUDY
35 TECHNIQUES USED IN DETERMINING THE SAMPLES SIZE
36 METHOD OF DATA ANALYSIS AND PRESENTATION
37 VALIDITY OF THE INSTRUMENT
REFERENCE
CHAPTER FOUR
DATA ANALYSIS AND PRESENTATION
41 DATA PRESENTATION
411 SYSTEM OF QUESTIONNAIRE ADMINISTRATIVE
42 DATA ANALYSIS CHARACTERISTIC OF SAMPLE
421 SEX AND MARITAL STATUS TABLE
422 SEX AND AGE GROUP
423 SEX AND EDUCATIONAL QULIFICATION
424 ANALYSS OF INDIVIDUAL QUESTION BY PERCENTAGE
43 TEST OF HYPOTHESIS
45 IMPLICATION OF FINDING
REFERENCES
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION
51 SUMMARY OF FINDINGS
52 CONCLUSION
53 RECOMMENDATIONS
54 SUGGESTIONS FOR FURTHER STUDIES
BIBLIOGRAPHY
APPENDIX
QUESTIONNAIRES
CHAPTER ONE
INTRODUCTION
11 BACKGROUND OF THE STUDY INTRODUCTION
Insurance is a safe-guard against risk Any device cumed at reducing the chances of a risk occurring, when it happens, reducing the extent of it’s damage and providing the affected persons with compensation is a form of insurance (Enwerezoir COR (2000))
Insurance as a modern concept for solving risk related problems depends on co-operation of a large number of people for it’s success This is the basic fundamental of insurance (Udeze JO(2005)
But what are the reasons for insurance?
111 Primarily, insurance guarantees that the insured will be indemnified or compensated in the event of insured risk happening
112 The fact that one is insured gives one a fooling of security, peace of mind and confidence to enable him devote his time and skill to his area of specialization for the overall improvement of the natural economy
113 The world economic system would obviously grind to a half there had not been an institution like insurance It closely follows trade and commerce giving helping hand in time of distress
114 Investment of insurance companies help to finances new protects and there by create employment opportunities for job seekers, and also increase national wealth
115 Employments affected by insurance institution help greatly to ease the unemployment problem in the country
116 Insurance guaranteed may be needed before award of certain types of contracts
As we know, an insurance company acquires an image through how it’s policy holders claimants and other persons who associate with the company view it’s activities and relationship with Mordi (1999) the image which an organization has is a matter of perception of the viewer The perception itself is the result of objective and subjective factors from the point of view of the observer association with the organization under consideration
Mordi while image taker are specific persons, institutions and industries Image of industries does not emerge suddently, it develops overtime the poor image of insurance in the country is as a result of people’s impression of the way insurance transactions have been handle since modern insurance practice was introduced in the country (Mordi 1990) has identified three aspects of insurance as the sources of image problem in insurance and they are production packaging
• Product distribution and
• Claim settlement
This study will deal with the last aspect claims settlement
Ozer (2000) Claim is a demand made by an insured to the insurer for a loss suffered by former (insured) under an insurance policy Afb Making preferring on claim under a policy the insured then becomes a clamant
The taste of a good insurance transaction lies in the manner in which a claim is handled This is why it is referred to as the acid test for insurance most of the disputes between the insurers and their policy-holders arise from claims settlement and it is the area that in fringer more on the image of an insurer and the insurance industry as a whole
The following statement portray the feeling of people towards insurance
• They are qukk to collect but slow to pay
• Insurance agents are the bad eggs that should be eliminated They prevent on you into paying your premium but fail to pay claim when due
• They are more interested in the premium they collect than the settlement of claims
• Insurance companies in Nigeria are selfish lots They expose clients to unnecessary embracement when it comes to collecting claims In the face of these allegations, the insurance industry has a great task of reshaping it’s already battered image The problems poiot to the need for effective communication Public enlightenment regarding insurance staff motivation which impact on quality of service delivery, effective supervision and control of insurance industry to ensure elimination of the bad eggs, adequate capitalization of insurance and education In fact the insurance industry should make concerted efforts to deal with it’s image problems
12 STATEMENT OF THE PROBLEMS
Insurance as we know is the sale of promise that is it is sale of intangible product This creates the need to explain on a personal contract basis
We will also probe into the problem responsible to bad image of insurance industry in Nigeria and why everybody complain of bad image of insurance It has been not iced that policy-holders consistently talk of poor claim industry in Nigeria which result to nonpayment of claim
• Poor funding by the shareholders insurance industry in Nigeria
Education of an average Nigeria on the scope functions and limitations of the insurance contract is very low The effect is that there is consistent misconception
It has become evident that persistent inflctionary rate in the economy also affect the standard of living of the people, which is turn discourages saving and any form of insurance can tract
13 OBJECTIVES OF THE STUDY
The board objective of the study is to find out the impact of claim settlement in shaping the image of insurance industry in Nigeria While the specific objective are as follows:
131 the study will help us to know what bring poor image to insurance industry
132 to find out such areas of disagreement between insured and insurance company during claim settlement
133 to identify the problem facing claim settlement
134 To know the problem facing insurance industry
14 RESEARCH QUESTION
The relevance of these question to the research is to enhance solution to the problems at hand in the form of scientific enquiry also it is a need and how this need is to be satisfied the following are the possible question based on the research topic
141 does misrepresentation of fact affect insurance claim settlement?
142 What are the problem associated with claim settlement
143 To know extent does notification of loss claims settlement?
144 How effective is the claim procedure in Nigeria insurance industry
15 RESEARCH HYPOTHESIS
The possible hypothesis is basically on Null and alternative basis
The hypothesis are as follows:
Ho: Misrepresentation of fact does not affect the insurance claim settlement
Hi: Misrepresentation of fact affect the insurance claim settlement
152 Ho: claim procedure is not effective in Nigeria insurance industry
Hi: Claim procedure is effective in Nigeria insurance industry
153 Ho: Insurance company is expected to pay at the end of the policy period for the loss caused by policy holders nosligence
Hi: Insurance company is not expected to pay at the and of the policy period for the loss caused by policy holders nosligence
154 Ho: Insurance company does not pay claims when it becomes necessary or due
Hi: Insurance company pays claim when it becomes necessary or due
16 SIGNIFICANCE OF THE STUDY
161 To enable insurance industry to improve on it’s claims handling techniques
162 It will enable the insuring public to understand the problems facing insurer in settling claims in fraud prone environment
163 It will help and improve insurance marketing
164 Thereby incrasing sales of insurance product
165 It will help in increasing market shares resulting in economic growth and development
17 SCOPE AND LIMITATION OF THE STUDY
The scope are selected insurance companies within Enugu state
There are some limitation of the study
Illiteracy: These can be seen as a problem where by the significant percentage of the people living in a geographical area can neither read nor writs it is very difficult for the researcher to ascertain the rightful information he wants
Beavrecracy: Another things that deliminate the research are provinces records, statistical data also secrecy
Attitude of the respondent: Another things that deliminate the research is the attitude of the respondent towards insurance How they see it and their thought towards it
Ignorance: It is also a problem in the sense that some people misconstrue the researcher as government tax agents gathering information to be used assessing respondents for tax purpose This has made then either to give false information or to withhold information completely there by making research work very difficult
Secrecy: People dislike activities that appear to be probling them They tend to avoid researchers they fael their activities which are not moort for public consumption would be exposed through research work So these is also one of the problem a researcher face
Death of statistical data: Most of the data required by researcher are not readily available even where they exist they are very relable and current Most data are obsolete and this has lod to situations where decisions and taken without sufficient data to back them up These is also a major problem a researcher face
18 Definition of operation terms
181 Arbitration: An alternative to litigation for the settlement of disputes
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e-Project Material Centre is a web service aimed at successfully assisting final year students with quality, well-researched, reliable, and ready-made project work. Our materials are recent, complete (chapter 1 to Minimum of Chapter 5, with references), and well-written. INSTANT ACCESS! INSTANT DOWNLOAD. Simply select your department, choose from our list of topics available, and explore your data.
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Guaranteed Delivery: Getting your project delivered on time is essential. You cannot afford to turn in your project past the deadline. That is why you must get your project online from a company that guarantees to meet your deadline. e-Project Topics Material Centre is happy to offer instant delivery of projects listed on our website. We can handle just about any deadline you send our way. Satisfaction Guaranteed: We always do whatever is necessary to ensure every customer's satisfaction.
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e-Project Topics Material Centre will only provide projects as a reference for your research. The projects ordered and produced should be used as a guide or framework for your own project. The contents of the projects should help you generate new ideas and thoughts for your own project. It is the aim of e-Project Topics Centre to only provide guidance by which the projects should be pursued. We are neither encouraging any form of plagiarism nor are we advocating the use of the projects produced herein for cheating.
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