RISK MANAGEMENT AS AN EFFICIENT MEANS OF ACHIEVING CORPORATE OBJECTIVES
This research work titled “Risk management as an efficient means of achieving corporate objectives” Some of the problems that led to this research work includes poor risk management in the country and non performing of duty by insurance practitioners. This research work examined the various problems facing the insurance practitioners which has been preventing them from playing their roles in risk management in Nigeria. Investigated into the reason for poor risk management which has ruined Nigerians insurance industries in the past. Examined why there has been daring escapades on the part of risk managers in performing their duties in the past. Data for the study was sourced from two main sources which include Primary and Secondary sources of data collection. Primary data: Questionnaires and oral interviews were used to collect information from the respondents. Secondary data : Journals, magazine and other relevant materials relating to the area of my investigation was reviewed. Extensive literature review was carried out on direct literature and indirect literature on books, journals and past works. The research instrument used in this study includes oral interview and questionnaire. The questionnaire is structural as to contain both close and open ended question. Simple tables, pie-charts and percentages was used in treatment of data while chi-square was used in the research work. This study shows that there are mere courageous and daring escapades on the past of risk managers in performing their duties. The researcher recommends that risk management department should be established to be managed by a competent professionally qualified risk manager.
TABLE OF CONTENT
Table of content v
1.0 Introduction 1
1.1 Background of study 1
1.2 Statement of the problem 5
1.3 Objective of study 6
1.4 Significance of the study 7
1.5 Definition of terms 11
1.6 Limitation of the study 12
2.1 Source of literature 14
2.2 The review 14
2.3 Selected and related concepts that enhance
the understanding of risk management in Nigeria,
Challenges of the Nigerian insurance practitioners 15
3.0 Methodology 26
3.1 Research method 26
3.2 Research design 27
3.3 Research population 29
3.4 Research sample/sampling technique 29
3.5 Measurement instrument 30
3.6 Data collection 30
3.7 Data analysis 32
3.8 Expected results 32
4.0 Data presentation and analysis 33
4.1 Data presentation and analysis 33
4.2 Discussion 45
SUMMARY AND RECOMMENDATION
5.1 Summary 50
5.2 Conclusion 51
5.3 Recommendations 52
Appendix A 56
Appendix B 57
1.1 BACKGROUND OF THE STUDY
Risk is an ingredient of all human life. How best to live with, is a problem for every individual and indeed every corporate body for a long time around, men has so urgent ways of controlling the risk elements to which individual, as private or public or as commercial and business ventures as exposed. Until about 25 years ago, the idea of risk management was thought of a subject and as a result of distaste. On the part of corporate and individual insurance buyers will gross inadequate premium rebate, given by insurance underwriters, to compensate for higher risk retention and loss prevention techniques being adopted for their insured risks.
Before looking at the meaning of “risk management” it will be curtail to briefly appreciate and examine the concept of risk “W.J” willet defined risk as objectified uncertaintly regarding undesirable events. Also by L.J meldrum defined risk as “the protection of assets, earning, liabilities and people of an enterprise with maximum efficient and at minimum cost.
Risk management can be defined as the process or transfer mechanism of identification, evaluation and earning of business or other enterprise with the minimum cost and maximum efficiency in a paper presented by “Insurance Training Centre” Ogere Ogun State in April, 1987 titled scope of risk management extend beyond mere handling of Insurable risk; it does encompassed, the management of all types of risk. Risk management is concerned with formally some forms of defensive strategy, which takes account of organizational assets and objectives.
This pieces of work will critically examine the various mechanism employed by corporate body in the assessment of risk. This will include;
A. process of identification
C. monitoring and controlling of such risk
The identification of risk will include information on the proposal from which reveals the physical and moral hazards of the subject matter of insurance. The identified risk which threatens a corperate assests. The monitoring and control of risks highlight the physical and financial control of risks that theaters assets. The centre pieces of this work will be to thoroughly analyze various means of identifying corporate objectives. These will include retention, reduction and transfer of risk. Also, taking steps pre loss and post loss objectives and the procedure for transfer and reduction of loss.
The entire work price will be comprehensively packaged by ascertaining various hazard and inherent liabilities present at the risk and makes recommendations based on experts. Opinion to enable underwrite to decide whether the risk offered is acceptable at standard rate or otherwise finally, I will also suggest ways and means for prudent risk management in respect with those risk that corporate bodies in an entity is faced with and bring about reduction to loss exposure.
1.2 STATEMENT OF THE PROBLEM
The following problems led to this research work:
1. There are so many problems facing the insurance practitioners which has been preventing them from playing their roles in risk management in Nigeria.
2. In the past poor risk management has ruined Nigerians insurance industries.
3. There has been daring escapades on the part of risk managers in performing their duties in the past.
1.3 OBJECTIVE OF THE STUDY
The purpose of this research work is to examine and pronounce the challenges of the insurance practitioners (risk mangers) in making a better Nigeria by providing ways and means of curbing risk in our industries so as to improve national development and growth.
Based on this fact, the following factors were considered as the major objective of the study
1. To recommend ways by which the insurance practitioners and risk managers can surmount the many constrains facing them and play a very important role in risk management in Nigeria.
2. To determine the extent in which bad risk man against ruined Nigerians industries in the past.
3. To encounter the need for mere courageous and daring escapades on the past of risk managers in performing their duties.
4. To critically look into the reason why risk management had continued to elude the people of Nigeria.
5. To examine and determine the contributions of insurance practitioners and risk management in the control of risk in Nigeria.
1.4 RESEARCH QUESTION
The researcher formulated the following research questions:
1. What are the problems facing the insurance practitioners which have been preventing them from playing their roles in risk management in Nigeria?
2. Has ruined Nigerians insurance industries in the past?
3. Is there daring escapades on the part of risk managers in performing their duties in the past?
1.5 SIGNIFICANCE OF THE STUDY
This research work will be of immense help to:
The student: it will help the researcher to know more on risk management as an efficient means of achieving corporate objectives.
The Stake holders: this study will be of great importance to stake holders as it will enrich their knowledge on the various risks in insurance firms and industries and also their effects.
Insurance company: this will equally be of help to the insurance companies and financial institutions in Nigeria because when they abide by the recommendations provided by the researcher it will help them in time of decision making.
The country at large: this study will be of great importance to the country Nigeria as it will help the policy makers to prorogate laws that will help improve risk management in the country.
1.6 SCOPE AND LIMITATIONS OF THE STUDY
Scope refers to the dimension of coverage of this work. This research work restricted to few selected insurance firms in Enugu metropolis. The information gathered will be used as reference to other insurance firms within the state and also the federation.
In carrying out this research work, the researcher was faced with certain problem which includes;
i. Time: Time constraints, as a student trying to keep up with lectures and at the same time running around for the collection of necessary information for completion of this research work.
ii. Money: The cost incurred in carrying out this study is very high in terms of transportation, photocopying and internet browsing.
iii. Cooperation: The uncooperative attitude of some staffs due to their duty of secrecy they owed to their company.
iv. Data: The difficulty of obtaining relevant materials pertaining to this research work.
1.4 DEFINITION OF TERMS
In the areas of the research work, certain key concept is defined.
1. Risk: A state or situation of uncertainty as to the outcome of an event.
2.Survey: An inspection of premises or property proposed for insurance
3.Hazard: A physical, moral or moral features that introduce an increase the possibility of loss arising from a peril or that may influence extent of a loss.
4.Risk management: The process involving identification, measurement and economic control of that the assets and earning of business or an enterprise.
5.Claims: The state of demand for compensation if a sum of money, as a result of losses suffered by an individual.