CHAPTER ONE
1.0 INTRODUCTION
Life is full of risk and every human being is confronted with possibility that one day one of these hazards which form part of life may befall them because one financial loss or the other. The purpose of insurance is to indemnify the victims for the financial loss they might have suffered as a result of these risks. Risk is a concept that denotes a potential negative impact to an asset or some characteristic of value that may arise from some present process or future event. In everyday usage, "risk" is often used synonymously with the probability of a known loss. Paradoxically, a probable loss can be uncertain and relative in an individual event while having a certainty in the aggregate of multiple events (see risk vs. uncertainty below). Risk is the possibility of an event occurring that will have an impact on the achievement of objectives. Risk is measured in terms of impact and likelihood.
Insurance was not set out to climate and cannot soften the blow in a purely financial sense of obtaining monetary compensation to the victims thereby placing them in a financial position.
The purchasing of an insurance has been earlier describe as the insured person as a policy holder in order to protect himself against a particular risk, take out a policy with an insured, thereby passing over the risks to the insured on a payment of a fee known as premium.
Life is associated with different kind of risk some of this risk are insurable while some are not. The insurance industry in each devices different type of insurance policy to carter for each one to the insurance risk. The more conventualâ€Ÿs, one being marine, fire, life, aviation, motor, person, accident and a lot of others.
1.1 BACK GROUND OF THE STUDY
Insurance as an industry did not exist in Nigeria until the later part of the twentieth century. However, there existed in Nigerian communities, some form of organize mutual social insurance schemes which had the future of modern insurance.
Apart from the early social insurance scheme, insurance as an industry is relatively new in Nigeria. The first operation branch of an insurance company was open in Nigeria in Lagos in 1921 by the Royal exchange assurance Plc. and it remain the only insurance company in Nigeria until 1949 when three British owned insurance companies were opened up.
As at the time Nigeria got her independent operating insurance as risen to twenty five and were mainly foreign owned. The insurance degree was prorogated to regulate the way previous legislation did not do.
The insurance company In Nigeria and the insurance industry are control by the federal ministry of finance another offices of director of insurance. The insurance departments of these ministries are responsible for the control activities of insurance companies so as to ensure compliance electrets of 1976 and other relevant regulation related to the business of insurance in Nigeria.
Royal Exchange assurance Plc. engage themselves in the following types of risk, they are;- loss of profit following the insurance personal inability, trained insurance, private can insure motor cycle group, house holders comprehensive insurance and all kind of risk.
Royal Exchange Insurance Nig. Plc. as many branches within Nigeria with the head office in Lagos and the incorporation number 6572 and the degree number that symbols Royal Exchange insurance his degree 58 of 1920.
1.2 STATEMENT OF THE PROBLEM
Owing to the negative factions surrounding the insurance industry in Nigeria, the activities of the industry have been subjected to various criticisms of those negative factions. We can identify good number of problems. Therefore, the statement of this problem of this study could be obtained based on the observation and critical analysis of the industry. Non payments of claims in the industry have become a faction that negatives the performance of the industry. Despite the factor, insurance company collect premium from their clients.
Another is the issue of inadequate capital and investment to put the company in a more favorable condition to meet their demand of their clients.
Often business organization in the country that rely on the insurance companies realize they are in the case were they incurred losses which have been insured barely affect the business.