PROBLEM ASSOCIATED WITH GENERAL ACCIDENT CLAIMS IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

Insurance industry is a financial institution that exists to indemnify the insured in the case of any occurrence of the subject matter of insurance.

According to Ivory (1986) on general accident insurance represents a conglomeration falling under life, fire, motor, marine and aviation insurance. The classification is later made for simplicity and to ease description of the indenting insurance. And secondly, to show the dynamism in insurance business since many more insurance policies can be designed as soon as the needs are identified and ability acquired. For insurance, it should not sound strange if Nigerian insurance design and market insurance policies such as rainfall, licenses, hair dressers and waste removal contractors because accidents are likely to arise from them.

Insurance derives from the situation of unforeseen event at least in timing that is to say, the insured event must be accidental rather than willful. During the period of 1976 insurance decree, accident insurance was under life policy. But accident depends on the event. And it is a benefit policy. The general accident arises in claim settlement, which the course of events occur on the policy which the policy holder purchases and the reason is for security purpose for instance company to prove their worth of their buy by them getting insurance security at their point of needs should not be jeopardized by insurance companies through refusal to pay claim on the policy therefore didn’t justify to say that the acid test of a reputable of insurance is its ability to provide assistance to the policy holder when the occasion arises for no matter the scope and intensity of the advertising, an insurer that fails its insured at the point of need is unwillingly liquidating his own company, this payments efficient and fair settlement of a claim give satisfaction to the insured and it’s the best way of advertising for the company.

When an event insured against in an insurance contract happens and the insured informs the insurer, demanding that the insurer fulfill his promise the insured is said to be making a claim.

1.2     STATEMENT OF THE PROBLEM

The challenges that led to this research are as stated below:

• Non prompt settlement of accident claims in Nigeria.
• Inadequate payment of claim by insurance companies in Nigeria.
• Delay in claim settlement in Nigerian insurance industry.

1.3     OBJECTIVE OF STUDY

The objectives of this research work are:

• To examine critically the issues influencing the non prompt settlement of general accident claims.
• To examine reasons for the non-adequate payment of claims by insurance companies
• To study the cause of delay in claims settlement in the insurance industry.

1.4     RESEARCH QUESTION

In order to do a thorough work on this topic, the researcher formulated certain questionnaires as shown below:

• Is there non prompt settlement of accident claims in insurance services.
• Is there inadequate claims settlement in Nigeria insurance industry.
• Does non prompt settlement or accident claims affect the performance of insurance companies.

1.5     RESEARCH HYPOTHESIS

H_o:  There is non prompt settlement of accident claim in insurance services.

H_i:   There is prompt settlement of accident claim in insurance services.

H_o:  There is inadequate claim settlement in insurance industry.

H_i:   There is adequate claim settlement in insurance industry.

H_o:  Non prompt settlement of accident claim does not affect the performance of insurance companies.

H_i:   Non prompt settlement of accident claim affect the performance of insurance companies.

1.6     SIGNIFICANCE OF THE STUDY

This research work will  be significant to:

The researcher: the study will help the researcher to know more on general accident claims and claims settlement in Nigeria.

The Insurance Company:  The research work will be of great importance to the insurance companies operating in Nigeria as it will serve as an eye opener on general accident claim settlement in the country.

The country at large:  This study on problems associated with general accident claims in Nigeria will be of importance to the government in terms of accident claims settlement.

The stakeholder: This study will be great significant importance to the stakeholders on the claim settlement techniques in Nigeria insurance industry.

1.7     SCOPE AND LIMITATION OF THE STUDY

Scope Of The Study

       The area of this research work in Enugu metropolis and the study is on the problems associated with general accidents claims in Nigeria with particular reference to The Universal Insurance Plc and Union Insurance Plc.

Limitations

The researcher in carrying out this study encountered numerous problems, which includes:

• Fund
• Time
• Lack of research materials
• Responds of the Respondent

• Fund:The include lack of enough fund to move around and visit the various areas in the state and also lack of money to buy enough research material which constitutes on impediment of to researchers high cost of transportation in the city due to long distance also imposed its own limitation on the researcher.
• Time: Time is also another constraints to the researcher. This is because the researcher is combing school activities and at the same time this made her unable to cover a lot of interesting areas but therefore limited her research work only at Enugu metropolis.
• Lack Of Research Materials: Lack of research materials was also one of the problems faces by the researcher in the cause of this research work.
• RESPONSE OF THE RESPONDENTS: Another constraints to the researcher is that some of the respondents fund it difficult to express their problem as regards the subject matter.

From the above points the researcher tried her best to bring out in details study on the problems associated with general accidents claims in Nigeria but the above constraints have limited the researcher to carry out her research work effectively.

1.8     DEFINITION OF OPERATIONAL TERMS

• Accident: Fortuitous action resulting to injury death or damage, loss of life of life or property.
• Arbitration: Is a process involving a decision by a person or persons not to be involved in a dispute, quite different from litigation.
• Claim Settlement: The process by which the insurance company restores the insurer to the position he occupied or he was prior to the happening of the insured events.
• Ex-Gratio Payment: This is payment made out of pity by the insurance, to keep the relationship going.
• Fire: Is the actual ignition of something that ought not to be on fire e.g. stove on fire is not fire not building on fire is fire.
• General Accident Policy: Denotes all policies under written by the general accident department.
• Insurer: They are the insurance companies who accept risk to be insured.
• Insuring Public: These are the clients of insurance company that is, people participating in the insurance business e.g. co-operate bodies and individual etc.
• Indemnity: Can be defined as the restoring or putting the insured in the financial position he was enjoying before the loss insured against occurred.
• Litigation: Involves the injured party taking counter action against the other party.
• Motor: Is any mechanically propelled vehicle included or adopted to the used on the road.
• Production: Anything that can be offered to satisfy a need or want, is into limited to physical object.
• Risk: The uncertainly of loss or the objective doubt concerning the out coming of a given situation.