Abstract
This research work titled “The impact of motor insurance policy on the growth and development of the economy” Nigeria motorist are not embracing motor insurance policies and one of the objectives are to know why Nigeria motorist embrace motor insurance policies, and the scope of the study is NICON insurance motor Department, The information for the study was collected using primary and secondary methods of data collection. For the primary data collection, questionnaires, personal observations and oral interviews were used while existing literature relevant to the topic was consulted for the secondary data. The researcher used chi-square statistical model to analyze the data. The researcher gave a summary of the findings that Nigeria motorist are not embracing motor insurance policies and one of the recommendation is that people should know the reason why they are not aware of the compensation in motor insurance policies
TABLE OF CONTENT
Title page
Approval page
Dedication
Acknowledgment
Abstract
Table of content
CHAPETR ONE
1.0 INTRODUCTION
1.1 Background of the study
1.2 Statement of problem
1.3 Objective of the study
1.4 Research Hypotheses
1.5 Significance of the study
1.6 Scope and limitation of the study
1.7 Definition of terms
1.8 Organization of the study
CHAPETR TWO
2.0 LITERATURE REVIEW
CHAPETR THREE
3.0 Research methodology
3.1 sources of data collection
3.3 Population of the study
3.4 Sampling and sampling distribution
3.5 Validation of research instrument
3.6 Method of data analysis
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS AND INTERPRETATION
4.1 Introductions
4.2 Data analysis
CHAPTER FIVE
5.1 Introduction
5.2 Summary
5.3 Conclusion
5.4 Recommendation
Appendix
CHAPTER ONE
INTRODUCTION
- Background of the study
The Before now, motorist, were at liberty to drive their cars on the public highways without any form of insurance. However, as the number of cars multiply on the highways rate of accident injured and death also multiple. Hence, the need for motor insurance. The first country that gave a lead in this direction was the great Britain. Other countries have the Traffic Act at 1930, introduced a compulsory insurance. The Act made it an offence for anyone to use or permit the use of a meter vehicle on a read unless there is in force a policy of insurance covering the liability of the motorist against death or motor accident. The idea of compulsory insurance was recognized quite early in west Africa and British legislation on the subject was extended to the four west African British colonies, Nigeria, Gold Coast, Sierra Leone and Gambia, each of these territories now has it own specific legislation on this subject. Modern insurance was introduced in Nigeria by European trading companies which establish trading post in Nigeria and their companies were appointed agent for insurance business by British companies in London Later, Nigeria traders and merchant of substantial status where given power to secure insurance business issues cover meters mostly on cargo and assistance in settlement of claim. As a result of this progress, Royal exchange Assurance branch office was established in Nigeria in the year 1921 and this company dominated insurance business for almost thirty years before the establishment of other companies such as provincial insurance company, nor which union, fire insurance company and Nigeria General insurance company limited to mention but a few – the incorporation of Nigeria into the Board Traffic Act by the British Parharment in 1945 imposed a statutory obligation on the users of motor vehicle to provide security against their legal liability for causing death of or bodily injury to the third parties. According to the finance-growth nexus theory, financial development promotes economic growth through channels of marginal productivity of capital, efficiency of channeling savings to investment, saving rate and technological innovation (Levine, 1997). Affecting economic growth through these channels is realized by functions of financial intermediaries. These functions include the provision of means for clearing and settling payments to facilitate the exchange of goods, services and assets, the provision of a mechanism for pooling resources together and channeling them to the most productive sector of the economy for investment, risk management, and price information to help coordinate decentralized decision making in various sectors of the economy, among others (Merton and Bodie, 1995). Among financial intermediaries, the insurance companies play important role, they are the main risk management tool for companies and individuals. Through issuing insurance policies, they collect funds and transfer them to deficit economic units for financing real investment. The importance of insurance is growing due to the increasing share of the insurance sector in the aggregate financial sector in almost every developing country. Insurance companies, together with mutual and pension funds, are one of the biggest institutional investors in stock, bond and real estate markets and their possible impact on the economic development will rather grow than decline due to issues such as widening income disparity and globalization. Insurance companies are similar to banks and capital markets as they serve the needs of business units and private households in intermediation. The availability of insurance services is essential for the stability of the economy and can make the business participants accept aggravated risks. By accepting claims, insurance companies also have to pool premiums and form reserve funds. So, insurance companies are playing an important role by enhancing internal cash flow at the assured and by creating large amount of assets placed on the capital market. Theoretical studies and empirical evidence have shown that countries with better developed financial system enjoy faster and more stable long-run growth of which insurance companies contribute to. Well-developed financial markets have a significant positive impact on total factor productivity, which translates into higher longrun development. Based on Solow’s (1956) work, Merton (2004) noted that due to the absence of a financial system that can provide the means of transforming technical innovation into broad implementation, technological progress will not have significant and substantial impact on the economic development and growth. The main objective of this article is to investigate the link between the insurance sector development and economic growth of Nigeria and hence to fill a gap in the current finance-growth nexus. Thus, the study is meant to evaluate the impact of motor insurance policies on the growth and development of the economy. Looking of NICON insurance company as a study.
1.2 Statement of the Problems
- Nigerian motorist are not embracing motor insurance policies.
- People are not aware of the compensation in motor insurance policies.
- Nigerian motor and third parties have not actually felt the impact motor insurance policies.
1.3 Objective of the Study
The following are the objective of the study.
- To know why Nigeria motorist embraced motor insurance policies.
- To create awareness of the compensation motor insurance policies.
- To ensure that the Nigeria motorist and third parties actually felt impact of motor insurance policies.
1.4 Research Question
- Have Nigeria motorist been embracing motor insurance policies.
- Are people aware of the compensation on motor policies.
- Have Nigeria motorist and third parties actually felt the impact of motor insurance policies.
1.5 Research Hypothesis
H0: Nigeria motorist have not been embracing motor insurance policies
H1: Nigeria motorist have been embracing motor insurance policies
H02: motor insurance policies do not have any impact on Nigerian motorist and third parties
H2: motor insurance policies do have impact on Nigerian motorist and third parties
1.6 SIGNIFICANCE OF THE STUDY
It is believed that at the at the completion of the study, the findings will be of great importance to the management of NICON insurance, as the findings will guide them on the benefit of sanitizing the public on the need to subscribed to an insurance cover especially motor insurance policy, the study will also be useful to the motorist as the study seek to educate the motorist on the tremendous benefit of motor insurance policy the study will be useful to researchers who intends to embark on a study in a similar topic, as the study will serve as a reference point, finally the study will be useful to the students, teachers, lecturers, academia’s and the general public as the findings will add to the pool of existing literature.
1.7 SCOPE AND LIMITATION OF THE STUDY
The scope of the study covers the impact of motor insurance policy on the growth and development of the economy, with emphasis on Nicon insurance. But in the cause of the study, there were some factors which limited the scope of the study;
- a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
- b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
- c) Organizational privacy: Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities
1.8 OPERATIONAL DEFINITION OF TERMS
Insurance policy
In insurance, the insurance policy is a contract between the insurer and the insured, known as the policyholder, which determines the claims which the insurer is legally required to pay
Motor insurance
Vehicle insurance (also known as car insurance, motor insurance or auto insurance) is insurance for cars, trucks, motorcycles, and other road vehicles. Its primary use is to provide financial protection against physical damage or bodily injury resulting from traffic collisions and against liability that could also arise there from.
Economic growth
Economic growth is the increase in the inflation-adjusted market value of the goods and services produced by an economy over time.
1.9 ORGANIZATION OF THE STUDY
This research work is organized in five chapters, for easy understanding, as follows
Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding. Chapter five gives summary, conclusion, and recommendations made of the study
