TABLE OF CONTENTS
Title page i
Approval sheet ii
Dedication iii
Acknowledgments iv
Preface v
Table of contents vi
CHAPTER ONE
INTRODUCTION
1.0 Historical
Background 1
1.1 Aims
and Objectives 3
1.2 Achievements
of the Company 4
1.3 The
Principle Guiding Insurance Business 5
1.4 Importance
of the study 6
1.5 Definition
of some Insurance terms 7
1.6 Limitation
of the study 11
1.7 Organization
structure of Gateway Insurance Plc 1
CHAPTER TWO
2.0 Literature
Review 16
2.1 Concept
of life Insurance 19
2.2 Field
Experience 21
2.3 The impact of each insurance policy to the
Development
of insurance business 22
CHAPTER THREE
3.0 Data
Collection 24
3.1 Various classes of some insurance policy
and the
categories of people that takes each
policy 27
3.2
To
know the insurance policy that recorded the largest number
of customers from 2004-2009 with
reference to sum assured. 29
CHAPTER FOUR
4.0 Analysis
of Data 33
4.1 Spearman’s
Rank Correlation method 36
4.2 Method
of Analysis used 39
4.3 Moving
Average Method 40
4.4 Least Square Regression Analysis 42
CHAPTER FIVE
5.0 Summary
of Finding Discussion 53
5.1 General
Inference 53
5.2 Recommendation
and Conclusion 55
Reference 57
CHAPTER ONE
INTRODUCTION
1.0 HISTORICAL BACKGROUND
There exist risks in all forms of
business organization since there are many factors over which man has no power.
Man cannot control for example, the force of nature or some of the conduct of
their human beings.
Infact, all human endeavours has its
attendant risks and hazard and one would wants to cover himself against these
hazards hence this process is generally known as insurance.
The probability of these risks can be
calculated mathematically and it is against these background that insurance can
be effected. Insurance is based upon the polling risk. There is a common fund
called premium to which the insured contributed to an it is from these that
payment is made to those who suffer loss.
The Gateway Insurance Company Plc was
established by the Kwara State Government in 23rd September 1970 about two decades ago as a
limited liability company. The company is licensed to transact all classes of
insurance including accident, life and pension when it was fully incorporated.
The company was formerly owned by the
Kwara State Government but due to the creation of new state with some parts of
old Kwara State created as Kogi state and some
part also given to Niger
state, the share capital is now owned by the three state governments with Kwara State
having the largest share. Also some local government in the state has share in
the company.
According to Mr. A. Toyosi, the
secretary to the Deputy General manager, Administration, the company has almost
completed its process of privation and its shares will soon be in the markets
for sales. When the company started operation in 1970, it has only three
branches with the headquarters at Ilorin
and other branch offices at Lagos
and Kaduna.
But as at today the company now has
about 17 braches offices spread all over the country with a competent and
highly skilled staff strength of abut 200 which makes it one of the leading
insurance company in Nigeria. Among the reason that motivated the old Kwara
state to set up the company was that it will help to generate additional
revenue when the state was newly created in 1967. Since its establishment, the
company has not only being meeting the aspiration of the state government but it has also
improved the social and economic life of the people of the state and Nigeria as a
whole. The company is also rendering excellent services to various business
organization against unexpected losses.
1.1 AIMS AND OBJECTIVES
The aims and objectives of carrying
out this project work are the following:
1. To find the effect of commission charged
on sum assured of the company and the rate percent charged on the various
policies of the company.
2. To find the rate at which people insure
their properties e.g. life insurance, marine insurance, fire insurance e.t.c
3. To find which insurance policies has the
largest number of customers with respect to sum assured and commission
received.
4. To make prediction on sum assured on
various policies for the future to determine the market trend/sales
1.2 ACHIEVEMENT OF THE COMPANY
Since the company started operation
over two decade’s age, it has made an outstanding progress which makes it one
of the leading insurance companies in Nigerian.
Although the company was authorized
to transact all insurance business when established but this could not be
achieved as a result it some problems ganging from inadequate skilled
personnel, limited capital and other related problems.
Since there has been significant
improvement in its services, the company is now waxing stronger by transacting
fully all classes of insurance. This can be as a result of the skilled
personnel and experts in insurance business now employed by the company.
The classes of insurance business
transacted by the company includes life policy personal scheme. Other are the
non-life assurance business like, motor, fire and special perils which covers
tornado, rainstorm, flood, policies in the Gateway Insurance company also
covers Goods interansit, marine, personal accident guarantee, cash interansit
and Burglary.
There is the other new insurance
business the company is going into called Engineering Insurance which covers
machinery-breakdown. Also due to the different location of its customers. The
company has established about 17 branches spread all over the country with a
capital base of over N2million.
1.3 THE PRINCIPLES GUIDING
INSURANCE BUSINESS
The principles guiding insurance
business in Gateway Insurance company generally, which however accounted for
its leading role in insurance business are the following:
i. PRINCIPLE OF INDEMNITY: Under
this principle the insurance company tells the assured that he/she would be
compensated if any loss or damage occur to him so that he will not feel the
impact of such loss.
ii. PRINCIPLE OF SUBROGATION: This is
the principle where by the insurance company gives the customer law that he
should make sure that another person does not use the property insured with
them such as motor car, radio tape e.t.c
iii. PRINCIPLE OF UTMOST GOOD FAITH:
this is the principle of insurance where the assured are warned as seriously on
the risk inherent in telling lies during the investigation which is likely to
be carried out by the company when a customer suffers any loss.
1.4 IMPORTANCE OF STUDY
During the course of the study, I was
able to understand the various insurance company, which have for long not been
opened to perspective customers and also I was able to know the mode of
operation of these policies other than motor insurance policy which many
customers believe is the only available policy transacted by the company.
I also understand the immense
contribution of insurance company to the development of a country particularly
in the social, economic and industrial sector by giving adequate protection
against unexpected loss. I also gained knowledge about the factors responsible
for the performance of each insurance policies which according to Rev. P. A
Adeyemo, the manager of motor insurance said is dependent on the economy.
1.5 DEFINITION OF INSURANCE
TERMS
PROXIMATE CAUSE: This is the principle where the
insurance company assures the customers that they would compensate him on the
property he insured these.
HULL: This is the policy which covers the
damage or loss that may happen to a ship or damage it cause to other ship.
INSURANCE INTEREST: This term refers to a situation
where only person s how have direct interest in the item to be insured may
insure it.
CARGO: This refers to marine which risk
which may be for a particular cherishment or floating polices covering up to
maximum of declared values.
POLICY: This refers to the period of
agreement reached by the company and customers. If this period or agreement
expires that policy also terminates.
FREIGHT: This is the money charged for the
carriage of goods from one place to the other by ships.
ENDOWMENT: this is the method of saving under
life insurance which includes the addition of bonus.
COMPREHENSIVE POLICY: This policy provides the two
parties to an accident under the motor accident and seems to expensive to run.
THIRD PARTY POLICY: This policy provide as cover fro
only the third party if an accident occurs under motor accident policy.
COMMISSION: This is the real profit or gain by
insurance company on each policy.
NET PREMIUM: This refers to the profit gained
after all expenses have been deducted.
GROSS PREMIUM: This is the total profit gained when
all expenditures have not been deducted.
SUM ASSURED: this refers to the amount of money
paid to the insurance company.
PROXY: This is the method used to show
customer (assured) during the renewal of business with the company.
LAPSE: This term is used to describe a
policy that have expired.
MORTGAGE PROTECTION: This policy covers the eventuality
of the death of a policy holder before paying fully a mortgage and the insurance
company will pay off the mortgage in the name of the dead policy holder, thus
relieving the members of the family of the responsibility.
TERM ASSURANCE: This is whereby a policy holder
(customer) may insure his life a particular period and if he dies within the
agreed period he will be paid benefit but he will not be paid if he does not
dies after the agreed period.
FIRE INSURANCE: This insurance provides over
particularly to property owner building and the contents kept in them against
fire damage. Most importantly this policy covers machinery, industrial
establishment. The policy covers special perils, like, lightening, explosion,
tornado or rainstorm, flood, earthquake e.t.c.
HOUSE OWNER POLICY: This policy provides cover fro
house owners against the risk of the fire and other perils.
HOUSE HOLDER POLICY: This policy covers householder
properties (like TV, furniture, equipments) against fire accident.
BURGLARY INSURANCE POLICY: This policy is designed to cover
valuable properties both at home and business premises against burglar by
visible violent and forceful entry.
This policy is common to shop owners,
supermarkets, chemist shops and even government warehouse.
PERSONAL ACCIDENT INSURANCE POLICY: This policy provides protection for
individual against the risk of accident like motor accident, industrial
accident or home accident. There is compensation due to the person that insures
against these hazards.
TWINS INSURANCE POLICY: This insurance policy provides cover
for couples in the eventuality of giving birth to twins. This policy if
undertaken by couples help reduce the burden of expenses which they may incur.
LIFE INSURANCE: This type of insurance policy
provides compensation or payment if there is disability or death of the assured
or if the contract matures in the case of endowment insurance provided the
contract is bringing. That is premium are paid as at when due. Life insurance
comprises of three types viz: Industrial, Group and ordinary, industrial life
policy differs from ordinary life policy in that the system of paying premiums
is usually by calling on the policy holder weekly or fortnightly.
Group life insurance, provides
coverage to the lives of a member of individuals under one master plan that is
to some group of people.
ENDOWMENT INSURANCE POLICY: This type of insurance policy is
common in Nigerian. It means that the money assured for a fixed term of years
is payable form the date of the policy at that time or pervious death. This
policy cater for the department during the policy and can also provide for
capital at retirement to supplement pension. This policy can be useful such as
in banking for credit facilities and as collateral security for financial
assistance.
CHILDREN’S EDUCATION INSURANCE
POLICY: This policy
can also be said to be endowment insurance but this policy provides fund for
expense of education for children of the assured who contribute to this fund,
and the date of maturity of the policy must colncide with the year in which
such expense is expected to being.
The sum assured is either be paid
installmentally or full and premiums are payable throughout the terms of the
policy or until earlier death.
1.6 LIMITATION OF THE STUDY
The method of collecting data and how
cleverly one is able to present and analyze these data collected contributes
largely to the success of any research project. Therefore, I have limited the
scope of this study only to the Gateway Insurance company Plc for case study to
facilitate accurate, efficient and easy collection of data.
The data collected however, is
secondary data by extraction from past records as it was difficult to collect
raw data about the company polices and objectives.
Infact, during the study, it was
impossible for me to get basic raw facts from the officers I interviewed, as
they were not willing to part with such information. Eventually, this has
limited the scope to which the study was intended to cover.
ADMINISTRATION: These problems almost created as
set back during the study, because I was unable to se the PRO of the company
who could have given me the necessary information. Administration who later
attended to me was unable to give the needed information; this has limited the
scope of study.
Another problem encountered during
the study was the inability of the company to make its financial standing
public for me to be able to estimate the sale trend of each policy.
All these problems has however
limited the extent to which the statistical analysis was intended for this
project.
1.7 THE
ORGANIZATION STRUCTURES OF GATEWAY INSURANCE PLC
The achievement recorded by gateway
insurance in the insurance business is not unconnected with a well structured
and efficient administration.
At the help of affair of the company
is the Board of director made up of eminent Nigerians who have distinguished
themselves in various field, seeing to the day to day efficient administration
of the company.
There are also five (5)
top-management staffs with the managing director at the top responsible the
management of the company. Others are the Deputy General Manager (Technical).
Assistant General Manager (Finance) Assistant General Manager (Administration)
and the controller of marketing.
Next are the middle management staffs
who are managers responsible for the eight (8) department of the company.
The departments are:
i. Accounts
ii. Administration
iii. Claims
iv. Fire
general accident
v. Motor
vi. Life
vii. Internal
Audit
viii. Re-insurance
The organization charts is shown
below:
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