THE EFFECT OF CLAIM SETTLEMENT ON PROFIT MAXIMIZATION IN THE INSURANCE INDUSTRIES
This project work has critically highlighted the compact of claims settlements on profit maximization in insurance industry, the problems affecting effective claims settlement in Nigeria have been identified and how they can be controlled is also included in the study.
Also circumstances given rise to claims, fraudulent claims and effect of inflation on claims settlement have been discussed and ways to solve them are inductive in the study.
This study also examines the lapses and recommends some viable point (s) that can also contribute to the image of the industry.
In conclusion, for effective claims settlement to arise, the insurer and the insured must agree as to the actual amount to be paid in the event of claims taking into consideration the principles and the risk guiding the handling of insurance claims.
TABLE OF CONTENT
Table of contents
1.1 Background of the study.
1.2 Statement of problem
1.3 Purpose of the study
1.4 Significance of the study
1.5 Limitation of the study
2.0 The Review Of Related Literature
2.1 Classes of insurance
2.2 Principles of insurance
2.3 Notification of claims
2.4 Investigation of claims
2.5 Circumstances given rise to claims
2.6 Claims report
2.7 Claim settlement under individual
2.8 The problems affecting effective claims settlement.
3.0 Research Design And Methodology
3.1 Source of Data
3.2 Location of Data
3.3 Method of Data collection
5.0 Recommendation And Conclusion
PURPOSE /OBJECTIVE OF THE STUDY
1. To find out effect of unsettled claims on profit maximization in the insurance industry
2. To find out weather creation of disputes on insurance contracts is one of the claim settlements on profit maximization.
3. To find out weather claim settlement involving policy holder on default has any effect on profitability in insurance industry.
4. To find out the effect of claims concerning third party insurance and profit maximization.
5. To find out the effect of prompt settlement on claims on profit maximization in insurance industry.
And that is why the research has decided to come up with the following questions.
1. What is the effect of unsettled claim on profit maximization in insurance industry?
2. What is the cause of disputes among the insurer and the insured on claim settlement in insurance industry?
3. What is the effect of claim settlement on profit maximization on the side of policyholders in case of default and on the uneducated public?
4. What is the effect of claim concerning third party insurance and profit maximization?
What is the effect of prompt settlement claims on profit maximization in insurance industry?
1.1 BACKGROUND OF THE STUDY
I can remember a definition which I was forced to cram in my first year by Mrs. Helen Ibeabuchi she defined insurance as an economic path towards unlimited opportunities for financial growth and fulfillment in life through protection and security. Winston Churchill once referred to insurance as “ bringing the magic of averages to the rescue of million”. This magic is the outcome of voluntary economic co-operation by human beings. Before this was the working out of the law of average which tells the probability or chance that an event will or will not happen.
Insurance is an arrangement by which one party (the insurer) promises to pay another party a sum of money if some thing unexpected should happen which causes the insured to sustain a financial loss.
The responsibility for paying such losses is then transferred from the policyholder to the insurer. In return, for accepting the burden of paying for losses when the events occur, the insurer charges the insured a price, the insurance premium the development of the insurance premium.
This development of the insurance industry in Nigeria data back to 1921.
Further more, growth was not phenomenal until the Nigeria economy of the 60’s and early 80’s often described as the “ mushroomery era” of the market, obviously, a lot of the malpractices especially on claim settlement crept into the industry, which the earlier laws of 1961 and 1965 could not effectively cope with. There were cases of insurer denying liabilities on the robbery of a car on the ground that only theft cover is granted.
The creation and maintenance of a good public image presents continuing difficulties and much still remains to be done. Also the danger of not appreciated by the public. Little general information is available in other field such as public liabilities, contractor, and all risk e.t.c.
In spite of this, the regulation of any insurance company depend to a large extent on the sort of claim service rounded by the company.
An unreliable and inefficient claims department could rain the reputation of a company once they discover that the company is reluctant to pay or delays payment without good reason of their genuine claims.
In order to guard against delay in the settlement of claims the insurance decree of 1976 list some condition under which the director of insurance may council the certificate of registration of an insurance company. Therefore, an insurance who makes it a matter of regular practice of delaying claim payment may stand the risk of having his license canceled.
1.2 STATEMENT OF PROBLEM