CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Insurance can be seen as an arrangement of
policy by which one party called the insured promises to pay another party
called the insured or policy holder a sum of money if something should happen
which causes the insured a financial loss.
The responsibility for paying such losses is
then transferred from the policyholder to the insurer. The insurer in return
for accepting the burden of paying for losses when they occur, the insurer
charges the insured a price called the INSURANCE PREMIUM.
Thus, insurance may be defined as a social
device providing financial compensation for the effect of misfortune, the
payment being made from the accumulated contributions of all parties
participating in the scheme
Notwithstanding, the introduction of insurance
business does not disallow risk to occur. But it allows the compensation of the
policyholder or insured when there is any unforeseen contingency or when risk
occurs.
Insurance carry on their duties because insurer
can accept premium from a large number of group of people in the same
circumstance, whereas few people can suffer financial losses in any one year.
INSURANCE CLAIM
The “acid test” is possibly the greatest single
feature of an insurer’s imputation, as far as the customer is concerned, is the
claims service provided. However, promptly and well the issue of policies,
collection of premiums and notices for renewals are handed the whole effect can
be ruined by and inefficient of apparently inequitable claims service. If
payments are delayed or withheld without
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satisfactory reasons, policyholders will quite
rightly lose confidence in the insurer concerned.
Thus, the handling of claims becomes perhaps the
most important aspect of the insurer’s advertising. Thereby prompt claims settlement
is indisputably by best tool to create a good image for the insurer.
Perhaps, insurance claim is thus; the process
whereby an insurance policy is acquired and the policy holder are performing
his responsibility by paying his premium as at when due either monthly or
annually. So, the insured is entitled to claim when he suffers financial loss
of the subject matter of insurance been insured against. As a result, the
policyholder will be issued a claim form to fill and state the proximate cause
of the incident in order to receive a claim.
Nevertheless, the term claim settlement has
always been the aspect where the insured and the insurer always have problem
from ages and this has ridicule the reputation of insurance company in Nigeria
through ineffective and unprompt settlement of claims as a means of correcting
the image of the insurance company in the face of the entire public.
Despite the sustained sensitization campaign
about the image benefits and opportunities insurance offer, Nigeria have continue
to show lack of interest or enthusiasm towards insurance as a whole.
The general perception of an average Nigeria is
that, the insurance companies are only quick in collecting premiums from
policyholders but becomes slows and argues in terms of settling claims. This
belief by means has reduced and demised the patronage to insurance companies by
Nigerians. Many firms in the industry have been of un-ethnical behaviors such
as non-payment of claims.
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A situation which has created an image problem
for the general views that of insurance business. Findings has revealed that a
lot of people who have never had an insurance policy or come across any person
who has had one of the general view that insurance companies trend has witnessed
renewed efforts by having stories to tell whenever there is the claim
settlement issue. This trend has embarrassed or involved renewed action by the
insurance regulatory body, the National Insurance Commission (NAICOM) and
Insurance Practitioners to sanitize the industry.
1.2
STATEMENT
OF PROBLEM
During the research work, the following where
the problems which where noticed to have resulted into the impression of the
bad image of insurance
1. The roles played by the insurance industry in
the Nigeria economy are being neglected.
2. Inadequacy in the settlement of claim by
illegal insurance companies and also legal once.
3. Lack or loss of confidence in the insurance
company
4. Lack of interest or enthusiasm towards insurance
business
5. Absence of effective rules and regulations
guiding the insurance industry
1.3
OBJECTIVE OF THE STUDY
In this aspect, the researcher will try to
ascertain the followings:
To pass general knowledge to the general public and the general
populacethat insurance companies are not fraudsters.
To also develop the image of the insurance industry in the face of the
public To enlighten the general public about the insurance business
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To increase the interest and enthusiasm of the public towards insurance
inNigeria
To enlighten the public and policy holder on how to go about making
claimswhen necessary
1.4
SIGNIFICANCE OF THE STUDY
To make the general public understand the insurance
business.
To elaborate the essence of having insurance cover and making claims
onthe cover when necessary.
To clear the fact that risk management business is very essential in
general To enlighten the adequacy of claim settlement and steps to take in
makingclaims
To shed light on the fact that insurance business is not only to make
moneybut to make provisions for future loss.
1.5
LIMITATION OF THE STUDY
work: The following were challenges or problems encountered during this
project
I. TIME FACTOR: - no time is specially given for
the project writing and researching, one will have to attend lectures and also
at the same time researching for the work
II. LACK OF FACILITIES:- Text books or
references materials, adequate and standard libraries for books for which
contains roles played and claim settlement as a means of correcting the bad
image of insurance in Nigeria were hardly seen or found, as such, it made it so
difficult for the researcher to get enough facts
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1.6
OPERATIONAL
DEFINITION OF TERMS
The major terms used in this project are defined
as follows:
INSURANCE: - Insurance is an arrangement by
which one party (the insurer) promise to pay another party (the insured or
policy holder) a sum of money, if something should happen which causes the
insurer to suffer a financial loss.
INSURER: - Is the party that agreed to pay
money, compensate, reinstate or restore another person (that is the insured or
policyholder) to his formal position on the happening of an event as a result
of consideration payed by an insured or insurer. Insurer simply means the
insurance company that received premium from the insured.
INSURED: - This is the policy holder or
presenter of an accepted business or peril to an insurer back up with policy
form or insured means a policy holder.
INDEMNITY: - This is an exact financial
compensation which would place the insured same financial position as he was in
immediately before the loss occurred
NEGOTIATION: - This involves dialogue or
peaceful discussion between the insurer and the insured or third party and
their authorized representatives such as loss adjusters, solicitors, etc. all
sitting together to resolve amicably
ARBITRATION: - This is where an independent person
not involved in the dispute, is appointed by both disputing parties to decide
on the case.
LITIGATION: - This is where the dispute could
not be resolved amicably between the parties; the aggrieved party may seek
legal address in a court of law.
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PREMIUM: - This is the financial consideration
payed by an insured to an insurer in return of promise of an insurer to
compensate, reinstate, and restore him in the event of an insured peril.
POLICY DOCUMENT: - This is a document that
serves as an evidence of insurance contract between the insurer and the insured
that contains the terms and condition of contract.
PROPOSAL FORM:- This is a document that
stipulate question concerning the insured and subject matter of insurance as well
as the terms of the contract which induced the insurer on whether to accepted
the offer or not and if accepted on what condition and terms.
CLAIM FORM:- This is a document or request filed
by a policyholders, stating that an insured peril or event has actually
occurred and requesting the insurance company to provide cover for it.
SUM INSURED: - This is an agreed face value of
property or risk place with an insurance company for cover or is the maximum
entitlement of an insured at the period of loss.
1.7
HISTORICAL
BACKGROUND OF OASIS INSURANCE COMPANY
An EMIS Company Report EMIS is an ISI Emerging
Markets Group Company Company Description
Oasis Insurance Plc. was incorporated on 9th
November 1992, and licenced under the insurance act 2003. to transact all
classes of General Insurance. OASIS is a Public Limited Company with Authorised
Share Capital of N5 Billion and paid up share capital in excess of N3billion
Oasis is a leader in the provision of
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insurance products and services of high
user-value not only in general insurance but especially in the specialized
areas of Oil, Energy, Aviation, Engineering and Industrial Risks Management.
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