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Insurance & Actuarial Science

Effect Of Road Accidents On Motor Insurance Claims In Nigeria (A Case Study Of Nicon Insurance Plc)

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ABSTRACT

This research work focused on the “Effect of Road Accidents on Motor Insurance claims in Nigeria”. It comprises of five chapters, one is the background of the study, chapter two is the literature review, chapter three is the research methodology, chapter four is the analysis and data presentation, while chapter five is the final chapter. The side effects of drugs or alcohol in the body cannot be overemphasized. This causes drowsiness and finally sleep during which they cause loss of lives. The research work examined the invaluable contributions of motor insurance in the transport system of the economy. In this research work, the researcher used both primary and secondary data to elicit information and the ANOVA statistical technique was used to test the hypothesis. The result of the findings revealed that ignorance of the members of the public on the traffic laws laid down by the government causes road accidents. It is also revealed that overtaking led to accidents as a result of loss of life and money. Furthermore, the use of drugs has influenced the state of mentality of drivers causing them to drive recklessly. The researcher recommended that the federal and state governments should embark on road maintenance and expansion of the available roads to reduce road accidents.

CHAPTER ONE

1.0     INTRODUCTION

Insurance business in Nigeria has been regulated for over 50 years. It is generally accepted that insurance is one of the most regulated business in the world. The failure of insurance company can have for reaching consequences hence the need for regulations. Regulation forms the main objective of these legislations inter alia include laying sound foundation for the operation of insurance business with a view to restoring confidence as well as the protection for the public.

Motor insurance as a portfolio is the easiest to develop and the commonest policy that can be sold to the prospective insured. This has made motor insurance a fertile ground where unauthorized persons and organization, parade fake motor documents such as motor notes, motor insurance certificate etc. proper underwriting, legislation and awareness can prevent road accidents in Nigeria.

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1.1     BACKGROUND OF THE STUDY

Transport is an important element in economics development and it affords the social and political interaction that most people take for granted. The provision of transport infrastructures has grown extensively across the globe through a range of networks of modes.

In Nigeria today, hardly goes a day without the occurrence of road accident leading to generally increasing incidence of mortality and mortality rates as well as financial loss to both society and the individual involved.

The high frequency of occurrence of total road accident globally has been attributed to population explosion and increased level of motorization. Motor vehicles crashes are the leading cause of death in adolescent and people on the prime age.

Road accident situation in Nigeria has been alarming and particularly disturbing ever since the first  crash will recorded in 1906 in Lagos.

1.2     STATEMENT OF PROBLEM

Although insurance has contributed to the motor insurance sector but the researcher identified some problems in the effect of road accident on motor insurance claims in Nigeria.

Ignorance of the member of the public on the traffic law’s laid down by the government. Overtaking has led to accident resulting to loss of life and money. The use of drugs has influenced the state of mentality of drivers causing them to drive recklessly. The insured’s poor motor vehicle maintenance culture is responsible for most accident and this invariable depletes the reserves of the insurance companies as results of frequent claims.

Dilapidated infrastructural facilities such as bridge, road etc causes more accidents which results to frequent claims thereby adversely affecting motor insurance portfolio.

1.3     OBJECTIVES OF THE STUDY

The general objective of this study is to examine the effect of road accidents on motor insurance claims in Nigeria while the specific objectives includes;

  1. To know the relationship that exist between ignorance of the public as the traffic laws laid down by the government and road accident
  2. To know how overtaking has led to accident as a result of loss of life and money
  3. To examine the extent the use of drugs has influenced the state of mentality of drivers causing them to drive recklessly
  4. To know how the insured poor motor vehicle maintenance culture is responsible for most accident and this invariable depletes the reserves of the insurance companies as results of frequent claims.
  5. To know how the dilapidated infrastructural facilities such as bridge, road etc cause more accident which result to frequent claims thereby adversely affects motor insurance portfolio.
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1.4     RESEARCH QUESTIONS

In consideration of the following problem analysis, the researcher focuses on the following research questions:

  1. How the ignorance of the member of the public on the traffic laws lay down by the government
  2. In what ways has overtaking led to accident as a result of loss of life and money?
  3. How has the use of drugs influenced the mentality of state of drivers causing them to drive recklessly?
  4. In what ways has the insured poor motor vehicle maintenance culture responsible for most accident and invariable depletes the reserves of the insurance companies as results of frequent claims?
  5. How will one know how the dilapidated infrastructural facilities such as bridge, road, etc cause more accident which will result to frequent claims?

1.5     STATEMENT OF HYPOTHESIS

Hypothesis 1

H0: Ignorance of the members of the public on the traffic laws laid down by the government does not cause road accident

H1: Ignorance of the members of the public on the traffic laws laid down by the government cause road accident

Hypothesis 2

H0: Overtaking does not lead to accident as a result of loss of life and money

H1: Overtaking led to accident as a result of loss of life and mney

Hypothesis 3

H0: The use of drugs hs not influenced the state of mentality of drivers among causing them to drive recklessly

H1: the use of drugs has influenced the state of mentality of drivers causing them to drive recklessly.

1.6     SCOPE OF THE STUDY

This research work will border on identifying and analyzing the problems the effect of road accidents on motor insurance claims in Nigeria which is the easiest and commonest insurance cover, the researcher will use consolidated NICON Insurance PLC as a case study and will examine the motor insurance claims.

1.7     LIMITATION OF THE STUDY

This research work is a study on NICON Insurance Plc. The study accommodates some limitations in the course of the work. It was constrained by time and finance because there were not enough materials regarding effect of road accidents.

There was difficulty in the reflected captive insurance companies who feared exposing their management practice to the public.

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1.8     SIGNIFICANCE OF THE STUDY

The significance of the study is to emphasize on the dynamic role of road safety corps with reference to the road accidents on motor insurance claims in Nigeria. The practical importance are as follows;

To increase the rate of investment to encourage the public to abide by the rules and regulations to create a good environment that would prevent frequent accident to prevent potential threat of life to accident.

To promote economic stability in the face of international instability

The recommendations made at the end of the study will be a greater importance to the insurance company, the government as the general public.

1.9     DEFINITION OF TERMS

Consideration

In Lewis V. Norwich Union fire insurance co-premium was described as the consideration given by the insured in return for the insurers undertaking to cover the risks insured against in the policy of assurance (Ojukwu, 2006:22).

Claims:

In insurance, this is a formal request to an insurance company for average or compensation for a covered loss or policy event. A claim does not necessarily lead to a payment.

 

Insured:

The buyer of insurance. They can also be called the policy holder, is one who buys an insurance contract.

Claim Frequency

The member of claims in a period per unit of exposure, such as the number of claims per vehicle year for a calendar year or per policy  over a period.

Indemnity:

This is the monetary compensation given by an insurer to an insured following a loss caused by an insured risk Nwite (2005:17).

Policy:

This is the document evidencing the contract of insurance shall be delivered to the insured not later than 60days after payment of the first premium; Section 15(1) Insurance Act 2003.

Utmost Good Faith:

This is the duty to disclose without being asked for all the facts known to the insured, but not already known to the insurer, that would require the insurer to know whether to accept the risk or not and when to pay claims. That is expressed by saying that it is a contract of Utmost Good Faith; Uberima Fidei.


Pages:  85

Category: Project

Format:  Word & PDF         

Chapters: 1-5                                 

Material contains Table of Content, Abstract and References.

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