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 conventual‟s, 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.

1.3 OBJECTIVE OF THE STUDY
As a general rule, there are hardly any differences between the aims and objectives of
the insurance in Africa from those of similar ones operating elsewhere in the world. A
brief examination of the aims of a typical insurance emphasizing those features that
would be OD special interest to the prop actors and managers of insurance company in
Africa will be useful. The objective of an insurance company may be summarized as
follows;-
1. To sell insurance cover to insurance consumers.
2. To settle all genuine claim family land promptly in accordance with law and be
formed relevant insurance policy.
3. To run business or organization in such a way that it produce a fair to the
shareholders who funded that capital with which the business was established.
In moving forward these basic objectives, the prop actor and managers of the insurance
company have certain responsibility to different group and making their decision they
must bear in mind and protect the interest of each group, these groups are;-
i. The policy holders.
ii. The shareholders.
iii. The workers and staffs.
iv. The Nation and the society.

1.4 SIGNIFICANCE OF THE STUDY
Insurance companies form a part of the very fabric of the economy and are
indispensable to it in the modern state. They are vitally necessary because they are one
of the most important vehicles for development and because of the security they give to
entrepreneur, that policy holder and shareholders.
The availability of insurance maximizes the entrepreneur‟s uncertainty to the extent that
some of the risks with which he is faced with can be translated, for a fix amount called
the „‟premium‟‟. He is to fully commit his assets to the operation of his business. This
enables them to acquire the necessary confidence and tranquility of mind that are
requisites to fruitful risk looking.

1.5 SCOPE OF THE STUDY
The researcher‟s work would have been wide in nature; however, it has restricted itself
to insurance company. Thus the study will focus and concentrate strictly on the role of
insurance company towards the development of business enterprises. Insurance provide
a means for industrial and societies to cope with some of the risks faced in everyday life.
Earning capacity is asses that should be protected through insurance.

1.6 LIMITATIONS TO THE STUDY
A research of this nature is found to have a lot of limitations. Time factor was a serious
problem encountered; the period given for the completion of this research work was
share along with academic, non-academic work which was necessary in relation with a
completion of school in general. The time spread to include the distribution and
gathering of questionnaire from respondents which was a problem of its own entirely.
Financial constraints can never be rule out in a situation like this, the money required
for the running around, cost of materials etc.
Another limitation is that of material for the secondary data. Even though there are
many existing text books and journals of insurance nature which would have been used
for this research work. Getting them in the library wasn‟t easy as many students are
equally writing on similar topics which require the same materials.

1.7 STATEMENT OF HYPOTHESIS
In every study, there is an assumption on the variable of that study. This assumption
tends to predict the outcome of the study. The hypothesis of this study is to asset the
following;-
HI: Insurance firms play a vital role in the development of nation economy.
HO: Insurance firms don‟t play a meaningful role in the development of nation‟s
economy.

1.8 DEFINITION OF KEY TERMS
OD: Organizational Development