The document analyzes the performance of life insurance in the Nile Insurance Company in Ethiopia over 4 years from 2003-2007. It finds that while gross and net written premiums increased overall, the rate of growth fluctuated due to unhealthy competition. It also finds that while the company offered new life insurance products, revenue was highly concentrated in a few classes. Premiums and claims were not proportionally distributed across classes. The study concludes that there is a direct correlation between premium collection and claim payments, with classes generating more premiums also incurring higher claims.
Insurance Sector Development & Economic Growth in MalaysiaSofia Naznim
To investigate the link between the insurance sector development and economic growth of Malaysia and to fill a gap in the current finance-growth nexus.
Research Based.
The Case for Increasing FDI Caps in Insurance
The history of India’s political economy is replete with missed opportunities. The approach to growth and investment has been often stranded in the many romantic notions of selfreliance and what constitutes national interest. In every
decade since Independence, the approach to foreign direct investment has been influenced by a mistrust triggered by a colonial hangover. Every time India has opened its doors – or windows if you please – to foreign investment, it has been characterised by gradualism in the wake of much opposition. The debates around opening or expanding FDI are similar – as it was when telecom or banking opened up for foreign investment. What is important to recognise is that every such initiative has been beneficial, delivering greater common good.
Higher economic growth is driven by competition and consumer choice. Competition drives efficiency and efficiency drives growth. This is true of every country that has done well economically. It is also true of India since 1991, in segments where competition has been introduced. Any attempt to artificially introduce protection always has costs. Inefficient producers are protected, but at the expense of consumers. Consumers suffer from higher prices,bad service and limited choice. This is straightforward under-graduate economic theory. The gains to inefficient producers are more than neutralized by losses to consumers, leading to an overall deadweight welfare loss to the country.
In this argument, the colour of the competition, whether it is domestic or foreign, does not matter. In addition, there is the macroeconomic argument about a current account deficit having to be met through capital account inflows and non-debt-creating FDI inflows are preferable to debt-creating capital inflows. While these broad arguments about competition and FDI are accepted, the question to ask is, why should the insurance sector not be subject to these compelling arguments? Is there anything special about insurance that rational arguments should not be applied to
this sector? In every sector where India has opened up to FDI, be it manufacturing or be it services, two propositions are empirically evident. First, liberalization helps consumers. Second, fears about inefficient producers being eliminated are also vastly exaggerated.
Instead, producers of goods and services adapt and survive, based on access to capital, technology, knowhow, improved management practices and customer orientation. Therefore, protection not only harms the cause of consumers, it also harms the cause of producers. There is no reason why insurance should be treated differently. And economic logic and rationale should not be conditional on whether one is within the government or is in opposition.
This document provides an overview of the financial sector and insurance industry in Bangladesh. It introduces the presenters and their topic of ethics in the financial sector of Bangladesh. It defines ethics and describes the structure of Bangladesh's formal, semi-formal, and informal financial sectors. The document also outlines the insurance industry in Bangladesh, including the major players like Jiban Bima Corporation and Sadharan Bima Corporation, as well as regulations and types of insurance products. It discusses challenges facing the insurance industry and potential solutions.
Recent developments in insurance sectorSadan Sinha
The document summarizes recent developments in the Indian insurance sector. It notes that while life insurance penetration has increased from 2.15% in 2001 to 4.6% in 2009, general insurance penetration has remained low between 0.55-0.75%. It discusses issues like the need for insurers to be conservative, challenges in infrastructure funding, and shifting focus of life insurance from risk of dying early to risk of living too long. The summary also highlights regulatory changes by IRDA to standardize proposal forms, introduce new product rules and increase oversight of insurers.
This document presents information about the insurance sector in India. It discusses the privatization of insurance, the growth of major private players in the sector, and the key driving factors such as rising incomes and demand from semi-urban populations. It also outlines some of the challenges and opportunities in the Indian insurance market since privatization, such as the need for effective mass marketing strategies and leveraging new technologies. Overall, the privatization of insurance has led to increased competition, new products, and higher salaries compared to when it was previously dominated by state-owned providers.
This document provides an overview of Mahindra & Mahindra's corporate social responsibility activities in India. It discusses that Mahindra & Mahindra engages in various CSR initiatives focused on education, disaster relief, and community development. Some of the key CSR programs and initiatives discussed include the K.C. Mahindra Education Trust, which provides scholarships and education funding; Mahindra Academies, which are schools established near factories for employees' children; disaster relief support during events like tsunamis and earthquakes; and transforming municipal gardens in cities. The document analyzes how Mahindra & Mahindra integrates social responsibility into its business operations through these and other community programs.
Insurance Sector Development & Economic Growth in MalaysiaSofia Naznim
To investigate the link between the insurance sector development and economic growth of Malaysia and to fill a gap in the current finance-growth nexus.
Research Based.
The Case for Increasing FDI Caps in Insurance
The history of India’s political economy is replete with missed opportunities. The approach to growth and investment has been often stranded in the many romantic notions of selfreliance and what constitutes national interest. In every
decade since Independence, the approach to foreign direct investment has been influenced by a mistrust triggered by a colonial hangover. Every time India has opened its doors – or windows if you please – to foreign investment, it has been characterised by gradualism in the wake of much opposition. The debates around opening or expanding FDI are similar – as it was when telecom or banking opened up for foreign investment. What is important to recognise is that every such initiative has been beneficial, delivering greater common good.
Higher economic growth is driven by competition and consumer choice. Competition drives efficiency and efficiency drives growth. This is true of every country that has done well economically. It is also true of India since 1991, in segments where competition has been introduced. Any attempt to artificially introduce protection always has costs. Inefficient producers are protected, but at the expense of consumers. Consumers suffer from higher prices,bad service and limited choice. This is straightforward under-graduate economic theory. The gains to inefficient producers are more than neutralized by losses to consumers, leading to an overall deadweight welfare loss to the country.
In this argument, the colour of the competition, whether it is domestic or foreign, does not matter. In addition, there is the macroeconomic argument about a current account deficit having to be met through capital account inflows and non-debt-creating FDI inflows are preferable to debt-creating capital inflows. While these broad arguments about competition and FDI are accepted, the question to ask is, why should the insurance sector not be subject to these compelling arguments? Is there anything special about insurance that rational arguments should not be applied to
this sector? In every sector where India has opened up to FDI, be it manufacturing or be it services, two propositions are empirically evident. First, liberalization helps consumers. Second, fears about inefficient producers being eliminated are also vastly exaggerated.
Instead, producers of goods and services adapt and survive, based on access to capital, technology, knowhow, improved management practices and customer orientation. Therefore, protection not only harms the cause of consumers, it also harms the cause of producers. There is no reason why insurance should be treated differently. And economic logic and rationale should not be conditional on whether one is within the government or is in opposition.
This document provides an overview of the financial sector and insurance industry in Bangladesh. It introduces the presenters and their topic of ethics in the financial sector of Bangladesh. It defines ethics and describes the structure of Bangladesh's formal, semi-formal, and informal financial sectors. The document also outlines the insurance industry in Bangladesh, including the major players like Jiban Bima Corporation and Sadharan Bima Corporation, as well as regulations and types of insurance products. It discusses challenges facing the insurance industry and potential solutions.
Recent developments in insurance sectorSadan Sinha
The document summarizes recent developments in the Indian insurance sector. It notes that while life insurance penetration has increased from 2.15% in 2001 to 4.6% in 2009, general insurance penetration has remained low between 0.55-0.75%. It discusses issues like the need for insurers to be conservative, challenges in infrastructure funding, and shifting focus of life insurance from risk of dying early to risk of living too long. The summary also highlights regulatory changes by IRDA to standardize proposal forms, introduce new product rules and increase oversight of insurers.
This document presents information about the insurance sector in India. It discusses the privatization of insurance, the growth of major private players in the sector, and the key driving factors such as rising incomes and demand from semi-urban populations. It also outlines some of the challenges and opportunities in the Indian insurance market since privatization, such as the need for effective mass marketing strategies and leveraging new technologies. Overall, the privatization of insurance has led to increased competition, new products, and higher salaries compared to when it was previously dominated by state-owned providers.
This document provides an overview of Mahindra & Mahindra's corporate social responsibility activities in India. It discusses that Mahindra & Mahindra engages in various CSR initiatives focused on education, disaster relief, and community development. Some of the key CSR programs and initiatives discussed include the K.C. Mahindra Education Trust, which provides scholarships and education funding; Mahindra Academies, which are schools established near factories for employees' children; disaster relief support during events like tsunamis and earthquakes; and transforming municipal gardens in cities. The document analyzes how Mahindra & Mahindra integrates social responsibility into its business operations through these and other community programs.
The document provides information about the role, functions, and services of insurance companies in Bangladesh. It discusses the history and development of insurance in the country, from the origins of fire, marine, and life insurance to the current structure with both state-owned and private insurance companies. It outlines the key services insurance companies provide, including life insurance, general insurance, reinsurance, micro-insurance, and Takaful/Islamic insurance. It also lists the requirements for establishing an insurance company in Bangladesh.
Planning for the old age when the ability to earn diminishes while the expenses to live a dignified and healthy life start rising is of utmost importance.
The document provides an industry analysis of the insurance sector in India. It discusses the types of insurance available in India and the key regulatory authority and companies in the sector. Some of the main factors that affect the insurance industry are inflation, deflation, economic policies, and competition. The insurance industry in India has experienced significant growth in online purchases and is projected to continue growing due to demographic and economic factors. The overall size of the life and general insurance markets in India is also growing.
This document provides an overview of health insurance in Bangladesh. It discusses key concepts like social health insurance and private health insurance. It notes that household out-of-pocket expenses are currently the main source of healthcare financing in Bangladesh. The document also examines the government's policies around developing health insurance, including a 2000 report that outlined steps to create an enabling framework. It analyzes the potential and limitations of different approaches like private insurance, social insurance, and community-based insurance in the Bangladeshi context.
This document provides an overview of the history and concepts of insurance business in Bangladesh. It discusses how insurance began as a way for communities to share risks. Modern insurance contracts emerged in Europe in the 14th century and separate from investment. The development of marine insurance in London in the late 17th century was also outlined. The document defines insurance and explains the basic concept of how a group pools funds to compensate members who suffer losses from shared risks. It provides a brief historical background of insurance in Bangladesh, including nationalization of the industry in 1972.
The document summarizes the insurance industry in Pakistan. It discusses the history and types of insurance companies including life insurance companies, general insurance companies, and Takaful insurance companies. It also discusses the performance and growth of the insurance industry from 2002-2007, including increases in assets, capital adequacy ratios, reserves, and profits of insurance companies. The challenges faced by the industry are also mentioned.
Age of the publication firm as a factor influencing capital structure of insu...Gerishom Wafula Manase
Capital structure refers to the combination of debt and equity capital a firm uses to finance its long term operations. The capital structure decision can affect the value of the firm by changing the firm’s expected earnings, its cost of capital or both. One of the most important objectives of determining an optimal capital structure of the firm is to ensure the lowest cost of capital and to maximize shareholders wealth. This paper is on age as a factor affecting capital structure in the insurance sector companies. This study sought to establish the influence of age as a factor of capital structure of the insurance companies in Kenya. The study focused on the entire population of the registered insurance companies listed in the Nairobi Securities Exchange in Kenya. Expectedly, the result of the study is sufficient to give an insight into how age of insurance company influences its capital structure among the listed insurance companies in the Nairobi Securities Exchange in Kenya. This study employed univariate analysis to measure the impact of This factor on the company’s capital structure. The findings established a co efficient of correlation of 0.809 and a regression of 0.65 indicating a strong relation between age and the capital structure of insurance companies
Insurance, Sector History, FDI in Insurance, Government Role in Insurance, Industry Growth Pattern, Challenges of Insurance Market, Foreign Direct Investment in Insurance
The document provides an overview of the general insurance industry in India. It discusses how general insurance started in India in the 19th century under British companies and was later nationalized. It was reopened to private companies in 1999. The summary discusses the key points of the industry's history, current state with low penetration compared to other countries, and future growth potential as regulations open the industry to more private and foreign players.
The document discusses the history and development of the insurance sector in India. It notes that insurance was initially nationalized and state-owned companies dominated the market. Liberalization in the 1990s allowed private companies to enter the sector. Now there are many private life, health, and general insurance companies operating alongside state-owned insurers, increasing competition and improving customer choice, services and products. However, some risks remain, such as companies prioritizing profits over customers.
Indian Insurance Industry - Recent Industry Trends - Part - 5Resurgent India
Bancassurance means selling insurance product through banks. Banks and insurance company come up in a partnership wherein the bank sells the tied insurance company's insurance products to its clients. Globally, bancassurance has emerged as an important channel for distribution of insurance products. Various international studies have shown that a bancassurance strategy has indeed saved costs of insurance companies in the long run.
Globalisation, liberalisation and privatisation of insuranceHabib Zafar
Globalisation, liberalisation, and privatisation have transformed the insurance industry in India. The Insurance Regulatory and Development Authority Act of 1999 ended state-owned insurers' monopoly and allowed private companies to enter the market. Many private insurers have global insurance companies as partners, bringing foreign investment. While this increased competition benefits consumers, it has also led to consolidation in the industry through mergers and acquisitions. The globalization of insurance continues to impact regulations and the competitive landscape in India.
The document provides an overview of the life insurance and financial planning industry in India. It discusses key topics such as the historical development of the insurance sector, current regulatory framework, major players and their market shares, various insurance products offered, and distribution channels. The industry is set for rapid growth in the coming years driven by increasing incomes, financial awareness and the entry of private players. Customer service and use of new distribution channels like bancassurance are becoming important for companies to succeed in this competitive environment.
This document summarizes a presentation on the state, potential, and constraints of the insurance business in Bangladesh. It outlines the objectives of analyzing the current scenario and problems/prospects. It provides historical background on insurance in Bangladesh. It then describes the current state, major problems including social, economic, political, legal, and other issues. It discusses ways to overcome problems and prospects for future growth in areas like population, GDP, new products. It concludes that insurance contributes significantly to the economy by creating savings, capital formation, and more.
This document is a summer training report submitted by Ankush Bathla for their MBA program. It provides an introduction and overview of the Indian insurance sector, including definitions of different types of insurance and recommendations from the Malhotra Committee report that led to reforms in the sector opening it up to private companies. It discusses the establishment of the Insurance Regulatory and Development Authority (IRDA) as the independent regulator of the insurance industry in India. The report appears to focus on providing background information on the Indian insurance industry before analyzing a specific health insurance product and company.
This presentation gives an brief introduction about the growth of insurance sector in India. It also give description about the major players existing in the finance market of insurance.
The document provides an overview of insurance sector advertising in India. It discusses the history and growth of the insurance industry in India from 1818 to present day. It notes that the industry was initially comprised of many private sector companies, but was later nationalized and consolidated into public sector monopolies. Since 2000, the sector has reopened to private and foreign companies. It also summarizes key findings from studies on the impact of advertising on insurance company profitability and market share between public and private insurers over time.
The document provides information about Birla Sun Life Insurance Company (BSLI), including:
- BSLI is a joint venture between Aditya Birla Group and Sun Life Financial Inc. of Canada.
- It has emerged as a leading player in India's life insurance industry, with over 1.5 million policies sold and a network of over 1000 agents across 100 cities.
- Kapil Dev, a famous Indian cricketer, was appointed as the company's brand ambassador to help increase its national brand recognition.
- BSLI's strengths include its multi-channel distribution network, customer-centric products and services, and strong training programs for agents.
This document provides an overview of a case study on SIC Life Insurance Company's Techiman Branch. It discusses key concepts around risk and insurance, outlines the types of insurance available in Ghana, and defines life insurance. The document then presents the objectives, methodology, limitations, and structure of the case study, which aims to assess the efficacy of SIC Life's life insurance policies and identify how the company pays out premiums to beneficiaries. Primary data will be collected through questionnaires to staff, beneficiaries, and the public, and secondary data will come from sources like textbooks and websites. The case study will have 5 chapters covering the background, literature review, methodology, data analysis and findings, and conclusions.
This document provides an overview of a case study on SIC Life Insurance Company's Techiman Branch. It discusses key concepts like risk and insurance, and outlines the types of insurance available in Ghana, with a focus on life insurance. The document poses research questions on the measures insurance companies use to influence life insurance demand, the affordability of premiums, and the sufficiency of insurance claims. It describes the objectives, limitations, and organization of the study into 5 chapters, covering topics like literature review, methodology, data analysis and findings.
The Imperative of Insurance Companies and the Industry’s Development in Nigeriaijtsrd
The purpose of this study was to investigate the Imperative of Insurance Companies and the Industries Development in Nigerian. To carry out the study effectively, we studied ten Insurance Companies in Nigeria, their trends in the structure of insurance companies, the structure and growth in the companies, type of Ownership and the paid up capital of the insurance Industry, Premium Income and the number of Insurance Companies, Assets of the Insurance Company and the type of Business undertaken, and the investment patterns of the Insurance companies, which serve as the measures of variables in the study. Questionnaires were designed to obtain the primary data for the study. The Analysis of Variance ANOVA , Statistical Techniques were used to analyse and test the significance of data collected. The results of the analysis revealed that there is a positive difference between type of ownership and paid up capital of the Insurance Companies that a significant difference exists between the Premium Income and the number of Insurance Companies in Nigeria that the assets of the Insurance Companies and the type of business undertaken by them have no significant differences and finally, there is also a significant difference in the Investment patterns and the type of business undertaken by the Insurance Industry. The implication of the study led to the recommendation that the Government and society should design policies and programmes that could stem the evil practices prevalent in the Insurance Companies as it does have a favourable impact on the Industry’s development in Nigeria. Dr. Odogu Laime Isaac | Disu Babatunde Sulaiman "The Imperative of Insurance Companies and the Industry’s Development in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-7 | Issue-3 , June 2023, URL: https://www.ijtsrd.com.com/papers/ijtsrd58571.pdf Paper URL: https://www.ijtsrd.com.com/management/accounting-and-finance/58571/the-imperative-of-insurance-companies-and-the-industry’s-development-in-nigeria/dr-odogu-laime-isaac
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
The document provides information about the role, functions, and services of insurance companies in Bangladesh. It discusses the history and development of insurance in the country, from the origins of fire, marine, and life insurance to the current structure with both state-owned and private insurance companies. It outlines the key services insurance companies provide, including life insurance, general insurance, reinsurance, micro-insurance, and Takaful/Islamic insurance. It also lists the requirements for establishing an insurance company in Bangladesh.
Planning for the old age when the ability to earn diminishes while the expenses to live a dignified and healthy life start rising is of utmost importance.
The document provides an industry analysis of the insurance sector in India. It discusses the types of insurance available in India and the key regulatory authority and companies in the sector. Some of the main factors that affect the insurance industry are inflation, deflation, economic policies, and competition. The insurance industry in India has experienced significant growth in online purchases and is projected to continue growing due to demographic and economic factors. The overall size of the life and general insurance markets in India is also growing.
This document provides an overview of health insurance in Bangladesh. It discusses key concepts like social health insurance and private health insurance. It notes that household out-of-pocket expenses are currently the main source of healthcare financing in Bangladesh. The document also examines the government's policies around developing health insurance, including a 2000 report that outlined steps to create an enabling framework. It analyzes the potential and limitations of different approaches like private insurance, social insurance, and community-based insurance in the Bangladeshi context.
This document provides an overview of the history and concepts of insurance business in Bangladesh. It discusses how insurance began as a way for communities to share risks. Modern insurance contracts emerged in Europe in the 14th century and separate from investment. The development of marine insurance in London in the late 17th century was also outlined. The document defines insurance and explains the basic concept of how a group pools funds to compensate members who suffer losses from shared risks. It provides a brief historical background of insurance in Bangladesh, including nationalization of the industry in 1972.
The document summarizes the insurance industry in Pakistan. It discusses the history and types of insurance companies including life insurance companies, general insurance companies, and Takaful insurance companies. It also discusses the performance and growth of the insurance industry from 2002-2007, including increases in assets, capital adequacy ratios, reserves, and profits of insurance companies. The challenges faced by the industry are also mentioned.
Age of the publication firm as a factor influencing capital structure of insu...Gerishom Wafula Manase
Capital structure refers to the combination of debt and equity capital a firm uses to finance its long term operations. The capital structure decision can affect the value of the firm by changing the firm’s expected earnings, its cost of capital or both. One of the most important objectives of determining an optimal capital structure of the firm is to ensure the lowest cost of capital and to maximize shareholders wealth. This paper is on age as a factor affecting capital structure in the insurance sector companies. This study sought to establish the influence of age as a factor of capital structure of the insurance companies in Kenya. The study focused on the entire population of the registered insurance companies listed in the Nairobi Securities Exchange in Kenya. Expectedly, the result of the study is sufficient to give an insight into how age of insurance company influences its capital structure among the listed insurance companies in the Nairobi Securities Exchange in Kenya. This study employed univariate analysis to measure the impact of This factor on the company’s capital structure. The findings established a co efficient of correlation of 0.809 and a regression of 0.65 indicating a strong relation between age and the capital structure of insurance companies
Insurance, Sector History, FDI in Insurance, Government Role in Insurance, Industry Growth Pattern, Challenges of Insurance Market, Foreign Direct Investment in Insurance
The document provides an overview of the general insurance industry in India. It discusses how general insurance started in India in the 19th century under British companies and was later nationalized. It was reopened to private companies in 1999. The summary discusses the key points of the industry's history, current state with low penetration compared to other countries, and future growth potential as regulations open the industry to more private and foreign players.
The document discusses the history and development of the insurance sector in India. It notes that insurance was initially nationalized and state-owned companies dominated the market. Liberalization in the 1990s allowed private companies to enter the sector. Now there are many private life, health, and general insurance companies operating alongside state-owned insurers, increasing competition and improving customer choice, services and products. However, some risks remain, such as companies prioritizing profits over customers.
Indian Insurance Industry - Recent Industry Trends - Part - 5Resurgent India
Bancassurance means selling insurance product through banks. Banks and insurance company come up in a partnership wherein the bank sells the tied insurance company's insurance products to its clients. Globally, bancassurance has emerged as an important channel for distribution of insurance products. Various international studies have shown that a bancassurance strategy has indeed saved costs of insurance companies in the long run.
Globalisation, liberalisation and privatisation of insuranceHabib Zafar
Globalisation, liberalisation, and privatisation have transformed the insurance industry in India. The Insurance Regulatory and Development Authority Act of 1999 ended state-owned insurers' monopoly and allowed private companies to enter the market. Many private insurers have global insurance companies as partners, bringing foreign investment. While this increased competition benefits consumers, it has also led to consolidation in the industry through mergers and acquisitions. The globalization of insurance continues to impact regulations and the competitive landscape in India.
The document provides an overview of the life insurance and financial planning industry in India. It discusses key topics such as the historical development of the insurance sector, current regulatory framework, major players and their market shares, various insurance products offered, and distribution channels. The industry is set for rapid growth in the coming years driven by increasing incomes, financial awareness and the entry of private players. Customer service and use of new distribution channels like bancassurance are becoming important for companies to succeed in this competitive environment.
This document summarizes a presentation on the state, potential, and constraints of the insurance business in Bangladesh. It outlines the objectives of analyzing the current scenario and problems/prospects. It provides historical background on insurance in Bangladesh. It then describes the current state, major problems including social, economic, political, legal, and other issues. It discusses ways to overcome problems and prospects for future growth in areas like population, GDP, new products. It concludes that insurance contributes significantly to the economy by creating savings, capital formation, and more.
This document is a summer training report submitted by Ankush Bathla for their MBA program. It provides an introduction and overview of the Indian insurance sector, including definitions of different types of insurance and recommendations from the Malhotra Committee report that led to reforms in the sector opening it up to private companies. It discusses the establishment of the Insurance Regulatory and Development Authority (IRDA) as the independent regulator of the insurance industry in India. The report appears to focus on providing background information on the Indian insurance industry before analyzing a specific health insurance product and company.
This presentation gives an brief introduction about the growth of insurance sector in India. It also give description about the major players existing in the finance market of insurance.
The document provides an overview of insurance sector advertising in India. It discusses the history and growth of the insurance industry in India from 1818 to present day. It notes that the industry was initially comprised of many private sector companies, but was later nationalized and consolidated into public sector monopolies. Since 2000, the sector has reopened to private and foreign companies. It also summarizes key findings from studies on the impact of advertising on insurance company profitability and market share between public and private insurers over time.
The document provides information about Birla Sun Life Insurance Company (BSLI), including:
- BSLI is a joint venture between Aditya Birla Group and Sun Life Financial Inc. of Canada.
- It has emerged as a leading player in India's life insurance industry, with over 1.5 million policies sold and a network of over 1000 agents across 100 cities.
- Kapil Dev, a famous Indian cricketer, was appointed as the company's brand ambassador to help increase its national brand recognition.
- BSLI's strengths include its multi-channel distribution network, customer-centric products and services, and strong training programs for agents.
This document provides an overview of a case study on SIC Life Insurance Company's Techiman Branch. It discusses key concepts around risk and insurance, outlines the types of insurance available in Ghana, and defines life insurance. The document then presents the objectives, methodology, limitations, and structure of the case study, which aims to assess the efficacy of SIC Life's life insurance policies and identify how the company pays out premiums to beneficiaries. Primary data will be collected through questionnaires to staff, beneficiaries, and the public, and secondary data will come from sources like textbooks and websites. The case study will have 5 chapters covering the background, literature review, methodology, data analysis and findings, and conclusions.
This document provides an overview of a case study on SIC Life Insurance Company's Techiman Branch. It discusses key concepts like risk and insurance, and outlines the types of insurance available in Ghana, with a focus on life insurance. The document poses research questions on the measures insurance companies use to influence life insurance demand, the affordability of premiums, and the sufficiency of insurance claims. It describes the objectives, limitations, and organization of the study into 5 chapters, covering topics like literature review, methodology, data analysis and findings.
The Imperative of Insurance Companies and the Industry’s Development in Nigeriaijtsrd
The purpose of this study was to investigate the Imperative of Insurance Companies and the Industries Development in Nigerian. To carry out the study effectively, we studied ten Insurance Companies in Nigeria, their trends in the structure of insurance companies, the structure and growth in the companies, type of Ownership and the paid up capital of the insurance Industry, Premium Income and the number of Insurance Companies, Assets of the Insurance Company and the type of Business undertaken, and the investment patterns of the Insurance companies, which serve as the measures of variables in the study. Questionnaires were designed to obtain the primary data for the study. The Analysis of Variance ANOVA , Statistical Techniques were used to analyse and test the significance of data collected. The results of the analysis revealed that there is a positive difference between type of ownership and paid up capital of the Insurance Companies that a significant difference exists between the Premium Income and the number of Insurance Companies in Nigeria that the assets of the Insurance Companies and the type of business undertaken by them have no significant differences and finally, there is also a significant difference in the Investment patterns and the type of business undertaken by the Insurance Industry. The implication of the study led to the recommendation that the Government and society should design policies and programmes that could stem the evil practices prevalent in the Insurance Companies as it does have a favourable impact on the Industry’s development in Nigeria. Dr. Odogu Laime Isaac | Disu Babatunde Sulaiman "The Imperative of Insurance Companies and the Industry’s Development in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-7 | Issue-3 , June 2023, URL: https://www.ijtsrd.com.com/papers/ijtsrd58571.pdf Paper URL: https://www.ijtsrd.com.com/management/accounting-and-finance/58571/the-imperative-of-insurance-companies-and-the-industry’s-development-in-nigeria/dr-odogu-laime-isaac
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
A project report on risk and return analysis of bharti axa productsKirankumar Kiri
The document provides an overview of risk and return concepts in finance and introduces the objectives, scope and methodology of a study on risk and return analysis of insurance products. It discusses that return is what an investor earns from an investment, while risk is the uncertainty associated with the investment. The potential return rises with increased risk. The study aims to maximize return by balancing risk, analyze risks of different insurance products, and do a comparative study of risk and return of insurance products. It will be limited to insurance products and use primary and secondary data collection.
This document discusses the impact of the global financial crisis on the Indian insurance industry. It provides background on the history and development of insurance in India. It then describes the current state of the Indian insurance market, which includes both public and private sector players. Finally, it discusses the global financial crisis that began in 2007-2008 and its effects on financial institutions worldwide. In 3 sentences:
The document provides context on the history and development of the Indian insurance industry. It then outlines the present scenario of the industry, which includes both public and private players competing in the large and growing Indian market. Finally, it introduces the global financial crisis that began in 2007 and may have impacted the Indian insurance sector.
This document provides an overview of a project to evaluate the performance of Birla Sun Life Insurance products compared to other insurance companies. The document includes chapters on the aim and objectives of the study, research methodology, industry overview, conclusions and suggestions. It also includes details on Birla Sun Life Insurance such as the company profile, details of insurance products offered, and information on key individuals associated with the company such as brand ambassador Kapil Dev. The document contains information to support an evaluation of Birla Sun Life Insurance's performance in the market relative to competitors.
The document provides information about different types of insurance policies offered by Nepal Life Insurance Company (NLIC) in Nepal. It discusses 9 major policies, including Surakshit Jeevan Beema Yojana (endowment plan), Keta-Keti Jeevan Bema (education and marriage plan), Jeevan Laxmi (triple benefit plan), Jeevan Sahara (endowment plan), and Jeevan Sarathi Beema Yojana (joint life plan). For each policy, it outlines the key features such as eligibility age, premium payment options, death and maturity benefits, and minimum/maximum sums assured. The document also reviews two research studies on topics of market risks faced by insurers and
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Analysis the performance of life insurance in private insurance
1. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.6, No.31, 2014
42
Analysis the Performance of Life Insurance in Private Insurance
Companies: The Case of Nile Insurance Company
Urgessa Tilahun Bekabil
East Wollega Zone Finance and Economic Development Office, P.O.Box 80, Nekemte, Ethiopia email
turgessa@ymail.com
Abstract
Insurance business was introduced into Ethiopia based on mutual assistances and its modern form traces
back to 1905, when bank of Abyssinia began to underwrite fire and marine insurance policy, as an agent to
foreign insurance company. The general objective of the study was to analysis the insurance services in the
Nile Insurance Company by giving special attention focusing on life insurance. Primary data were collected
using a structured questionnaire. In addition, secondary data were extracted from relevant sources to
supplement the data obtained from the survey. The result of this study reveals that gross written premium and
net written premium showed on increasing trend. But there is an ups and down of the percentage change
because of unhealthy completion between non private and other private insurance companies. Secondly even if
there are new classes of life insurance that was sold in Nile Insurance Company, the structure of life insurance
in terms of diversification of the source of revenues is limited to small classes of the business. The amount of
the premium collected and claims paid in these classes of the insurance is not proportionally distributed. The
end result of the data also shows that there is a direct correlation between premium collections and the claim
payments i.e. the classes of life insurance which contributes the large amount also incur higher claims (cost).
Key words: Analysis, Life Insurance, Nile Insurance Company, Addis Ababa, Ethiopia
1. Introduction
The idea of insurance can be traced back to thousands of years. The insurance Principe of building
reserves for the future is illustrated by the biblical story of Joseph and the famine in Egypt. The code of
Hamurabi, the collection of Babylonian laws of the 1700 B.C included the form of credit insurance. Life
insurance dates back to Raman times. The first successful insurance company, the amicable society for a
perpetual assurance office was founded in England in 1705-1706 (Encyclopedia, 1992).
Insurance business was introduced into Ethiopia based on mutual assistances and its modern form
traces back to 1905, when bank of Abyssinia began to underwrite fire and marine insurance policy, as an agent
to foreign insurance company. In 1972, fifteen local insurance companies were licensed pursuant to the
proclamation. However, two of these companies discontinued their business. These thirteen nationalized
companies were merged together and became company with the name of Ethiopian Insurance Corporation as
proclamation number68/75 (Feseha Afework, 1986).
The proclamation number 86/1994, the licensing and supervision of the insurance business, allows only
indigenous, private investors to participate in insurance operations, as gi ve n authority of licensing and
supervision of insurance business to NBE. As a result there are many indigenous private insurance companies
operating in Ethiopian currently both in life and non life insurance services. As one of the private insurance
company, Nile Insurance Company S.C was established on 11
th
of April 1995 with the subscribed capital of Birr
12,050,000 of which Birr 10,050,000 was the full paid-up. Currently the company’s paid-up capital stands at 40
million Birr and the balance will be settled shortly (NIC, 2007).
Nile insurance company S.C is on giving services both by life and non life coverage. Life insurance
policy provides that the insurance company will pay certain amount of money when a person insured dies. Life
insurance plays a great role in economic development and company’s growth. It can also be used for
investment income, saving retirement age and children education (NIC, 2007). The general objective of the
study was to analysis the insurance services in the Nile Insurance Company by giving special attention
focusing on lifeinsurance.
Life insurance plays a key in promoting the socio-economic development of modern economy. It is a
policy where an insurance company promises to pay benefit on the death of the person whose life is insured.
However, there is a problems related to insurance industries, which hinders its smooth operation. Some of the
problems faced Nile Insurance Companies in the case of life insurance are the alarmingly declining premium
rates due to unhealthy competition, most branches of the company were concentrated around urban areas, lack of
life insurance professionalism and training staffs and lack of adequate advertising to the promotion of life
insurance. It is clear that the problems of life insurance industry are increasing through different factors.
2. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.6, No.31, 2014
43
Therefore, it needs investigation to indentify the problems and to address possible solutions to the problems
before it is deep rooter.
The general objective of this study is to analysis the insurance services in the Nile Insurance
Company by giving special attention focusing on life insurance. The specific objectives are to examine the
premium collected and claims in terms of endowment, term and permanent (whole life) among many classes of
life insurance supplied by the company, analyze the performance of life insurance in private companies by
giving special attention to Nile Insurance Company and to study the structure and trend of the life insurance
activities in the Nile Insurance Company.
2. Materials and Methods
The methodology employed in the study was the case study which is the life insurance in the Nile
Insurance Company. The source of data was heavily depends on secondary data which is obtained from
different relevant books, published and unpublished materials, journals, articles, annual reports which is
prepared by the NBE and the Nile Insurance Company. Primary data was used specifically the interview with
the company’s life branchmanager.
As a means of data analysis the descriptive statistics was applied to test the trends of the growth of the
company, premium collections and claim payments by using charts or tables, graphs and so on. The time
coverage of the study was four consecutive years (2003/04 – 2006/07), since the life insurance of the Nile
Insurance start its operation in a good and well organized manner. This paper particularly focused on the main
type of cover that contributes to the high premium collection in relative terms such as endowment life
insurance, group term life insurance, and medical expense insurance and permanent life insurance. This paper
also tried to show the growth and the performance of life insurance business using different growth
measurement. It also tried to identify some factors that affect the life insurance growth and performance through
data analysis and successes review ofresult.
3. Result and Discussion
As the main propose of this study was data analysis and presentation of the results, it was to present the
data and finding based on financial statements that are prepared by the account department of the life
insurance main branch.
3.1. The Structure and Trend of Life Insurance
The structure and trend of life insurance is examined in this paper in connection with market share and against
different performance measurements. For the purpose of the simplify and understanding, the paper presents the
structures of life insurance business in Nile Insurance Company S.C. in the following terms.
3.1.1. The Structure of Life Insurance Business in Terms of Market Share
The market share of private life insurance including Nile insurance company is very low when we
compare them with non private insurance company such as Ethiopian Insurance Corporation due to it is early
establishment, where as private insurance companies are in their infant stage. According to some document
and research papers, the researcher have looked the following factors with may negatively contribute to the
growth of life insurance among private companies. The demand for life insurance is very low in our country
because of lack of awareness on important of life insurance. The attitude of public to consider insurance as
luxury rather than the necessity and the limited level of income of citizens affected the growth the life
insurance (NIC, 2007). The occurrence of risk on a life insurance is higher than that of non life insurance. Risks
in life insurance like illness and death of individuals are frequent and certain. These increase the claim (cost) and
minimize profit range of insurance services suppliers specially in under developed countries of which living
standards are very low (R.F. Carter, 1979).
Lack of substantial financial capacity to run life insurance business is another bottleneck. Though insurance
business needs an investment in other areas to strengthen capacity, there is big problem for private companies to
get these huge amounts of money.
3.1.2. The Performance of life Insurance in NIC in Term of sources of Revenue /Premium/
This subsection tries to give an insight into the sources revenue or premium of life insurance in NIC. It tries to
show the earning capacity of premium from different category of the life insurance. In order to change affair
premium the underwriter should have to take into consideration the circumstance and conditions of the
applicant; because of the selection of risk is up to him/her. In the process of selection there could be a great
deal of variation with regard to occupation, age, and sex. There is a low performance of life insurance in both
private and non private insurance companies. The major reasons of for this low performance of life
insurance are lack of awareness and altitude of the public to awards the life insurance and its benefits, the
nature of the insurance business i.e. it does not bring tangible service at the time of payment, the low level of
income of the majority of population, which creates a hindrance to pay the insurance premium, the higher
3. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.6, No.31, 2014
44
occurrence of risk in life insurance that raises cost and minimize the profit and this intern discourage the
growth of the business and etc. These all other factors have made the life insurance business unable to grow, as
it has to be.
3.1.3. The Trend of Gross Written Premium in Life Insurance
The rate at which the growth written premium and the net written premium grow as one factor which show
performance of the life insurance in the Nile Insurance Company asfollows.
Table 1. The growth of gross written premium (in ETB and %)
Year Gross-written
premium
Percentage
charge
Premium ceded Net-written
premium
Percentage
change
2003/04 2,317,195 629,513 1,687,682
2004/05 3,054,602 31.82 1,324,024 1,730,579 2.54
2005/06 3,375,37 10.50 1,073,344 2,302,033 33.02
2006/07 4,580,864 35.71 1,882,310 2,698,554 17.22
Source: company’s annual report (2004/04, 2005/06, 2006/07)
The gross written premium of birr 3,054,602 from life insurance business exceeded the previous year
(2004/04) performance by 31.82%, as a result the net written premium is increased by 2.54% from amount in
2003/04. The life insurance premium income of the year 2005/06 which is birr 3,375,377, as shown above was
increased by 10.50% from amount registered in 2004/05. In the same manner as of June 2006, the net written
premium showed huge change from birr 1,730,033 which is 33.02%. The premium from life insurance as June
2007 was showed a great change compared to the amount in June 2006. This is because of the active
contribution of the underwriting units through increasing public awareness marketing initiatives in life
insurance, as a result the percentage change in Gross-premium as June 2007 was 35.71% but the net written
premium showed only 17.22%.
Generally the gross written premium and the net written premium, as a performance in previous years
indicate showed an increase. This is because of the life insurance provision of training made to sales agents and
actives contribution of all underwritingunits.
The following tables shows the amount of the revenue (premium earned) from the available categories of life
insurance which are individually life, group life, medical expense insurance, term life, endowment life and
mortgage protection assurance (MPA) life insurance in the years 2003/04 to 2006/07.
Table 2 Revenue /premium/ earned in which class of life insurance (2003/04-2006/07) in Birr and percent
Years Individual Life Group Life Medical
expense
Term Life Endowment Life Mortgage Lifetotal
2003/04 84,384.1 1,265,761.5 337,536.4 949,321.13 316,440.38 2,531.5 2,955,975.01
2004/05 86,528.95 1,297,934.25 346,115.8 973, 450.69 324,483.56 2,595.87 3,031,109.12
2005/06 115,101.65 1,726.524.75 460,406.6 1,294,893.50 431,631.19 3,453.05 4,032,010.8
2006/07 134,927.7 2,023,915.5 539,710.8 1,517,936.63 505,978.89 4,047.83 4,726,517.35
Grand Total 420,912 6,314,136 1,683,769.6 4,735,602.63 1,578,534.02 12,628.25 14,745,612.28
Grand Life 3% 43% 11% 32% 11% 0.1% 100%
Source: computed from financial statement of NIC, life mainbranch.
Group Life Insurance
As it is shown the table above 2, group life insurance is the one and the main class of business that
contributes greater proportion of revenue or premium and it is the main source of the life insurance revenue.
According to the table the amount or premium collected from this class was birr 6.31 million and it implies that
43% of the revenue comes from it during the last four years.
As its name indicate group life insurance policy covers the lives of groups. Even if group life insurance
can be issued in the form of term, whole life and endowment form, and life insurance that is renewable annually.
Conditions that are needed for issuing group life insurance in the NIC are:
4. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.6, No.31, 2014
45
• The group must be active at work of wages, since group life is composition for loss.
• The group must have been form for a purpose other than that of obtaining insurance benefit.
• The group is formed for an indefinite period and that there will be a regular entry of new and young
members into the group.
• The group must have facilities for central administration of the group scheme i.e. premium collection,
enrollment of new members, assisting in claims, formalities and in general administration of the group
life.
According to table 2 the premium that was collected during the period of 2003/04 to 2006/07 is increased
from time to time. If we consider the time period by dividing before and after 2004, which is the time that the
company established its own life main branch and it creates an employment to the society which results in the
increment of demand for group life insurance by the employer to their workers, which is the compensation or
benefit for the employers.
Medical Expense Life Insurance
Medical sixpence insurance is the second type class of life insurance that is provided by NIC. The
share of premium that is collected from these class during 2003/04 – 2006/07, as table #2 show, was birr 1.6.8
million (11%). As the table shows, the trend of premium collection from the medical expense class of business
is increasing from time to time. The reason for this large growth, according to the information obtained from
the concerned personnel in NIC, is the increment in the rate of premium in medical expense insurance due to an
alarming growth of claim (cost) in the business caused by diverse health problems and soaring medical expense.
Medical expense insurance also provides cover for loss of income due to inability to work, sickness, & disease
of accidental bodily injury.
Individual Life Insurance
Individual life insurance is the third type of class of life insurance that is provided by NIC. As the
above table shows, the premium that is collected from these class during the last four years (2003/04 –
2005/06) was birr 0.42 million and it implies that 3% of the revenue comes from it. This contribution in terms
of premium collection is low when it compare to the premium collection from group life and medical expense
insurancepolicies.
As the table shows, the trend of premium collection from the life insurance is increasing from time
to time. The reason for this due to increasing the know-how of the people about the significance of this class of
insurance by providing adequate information though media, news papers, and other methods used the company.
Mortgage Protection Assurance (MPA)
Mortgage Protection Assurance (MPA) is the fourth class of the life insurance business, which
generated premium of birr 0.013 million 0r 0.1% of the total premium collected during the study as shown on
table 2. MPA is a compulsory insurance that individuals who borrow money from the bank to construct a house
have to buy. It is an insurance used as collateral to pay the loan if the borrower dies before serving at the
proposed date.
The insurance companies take the assureds place and pay the loans to the bank his/her behalf. So, the
bank asks the borrower to get an MPA from the insurance company through onetime payment of premium
before affecting the loan. As it is shown in the above table, the premium collected from MPA is increased
from time to time due to the government policy during the stated period that cut the loan interest rate to favor
the lower and middle income group to construct their house. This situation increased the demand for MPA and
intern increased premium collection fromit.
3.2. The Trends of the Life Fund and Underwriting Performance
The life insurance branch of Nile insurance collects premium from the kinds of life insurance. The trend
of life fund at year end i.e. increase in life fund and the management expenses incurred in life insurance were
summarized as follows.
Table 3 The Trend of Life Fund and Management Expense in NIC (inbirr)
Year Life fund at the end of the
year
Increasing in the life fund Management expense
2003/04 3,094,499 1,057,613 238,034
2004/05 3,744,552 650,053 372,627
2005/06 4,603,316 858,764 400,414
2006/07 6,227,854 1,624,536 289,327
Source: computed from financial statement of the company (2003/04 – 2006/07)
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46
As valuation life operation made by a actuarial as of June 30,2005, the life fund showed an
increasing by 650,053 from amount registered (gained) as June 2004, 3,094,449. As shown above table the life
fund was increased almost by an increased made in June 2006. As annual report of the 2006/07 shows life
fund was increased by 1,624,536, which is larger than amount gained in 2006/07 after the necessary reserves
were established. The management expense incurred in life insurance during the 2003/04 – 2005/06 increased
to some extent because of the payment of salaries made to employees and staff benefits of newly started life
insurance in the company and director’s remuneration for the year before these years. But, the management
expense during the year 2006/07 had been declined from 400,414 to 289,327, which is well for the performance
of the business. The underwriting performance in life insurance of the previous years can be summarized as
follows.
3.3. The Structure of Life Insurance in Terms of Cost or Claims Incurred
This section gives more emphasize on claim settlements. Since insurance being an invisible business
knowing the exact cost and its price is not easy to fix. So the insurance industry supplies this invisible service
provided by the company is measured by its claim handling and prompt settlement. Therefore efficient claim
handling is crucial to fulfill the promise. There are variance forms of benefits provided by NIC to policy owners
(2003/04 – 2006/07) inbirr.
Table 4 Cost incurred (claims) paid in each of class in life insurance business (2003/04 – 2006/07)
Years Death of
individual
Group life Medical
expense
Term life Endowment life Mortgage
Protection
Assurance
Total
2003/04 33804.4 507066 135217.6 380299.5 126766.5 1014.13 1184168.13
2004/05 52710.4 790660.5 210842.8 592995.38 197665.12 1581.32 1846455.82
2005/06 67495.85 1012437.75 269983.4 759328.31 253109.44 2024.87 2364379.62
2006/07 51679.05 775185.75 206716.2 581389.31 193796.44 1550.37 1810317.12
Grand total 205690 3085350 822760 2314012.5 771337.5 6170.69 7205320.69
Source: computed from financial statement of NIC life mainbranch
Group Death Benefit
Group death benefit is the amount of paid to the beneficiary when the deaths of group members occur.
The total amount of claims paid for these group death claims was 3.1 million of the total claims incurred from
year 2003/04 – 2006/07. It is the largest claims payment compared to the payment made in other classes of
business during the period. As it is depicted in the above table claim payment of group death benefit is varies
from time to time especially in 2005/06. It shows an alarming increase from the previous two years and in
2006/07 it again shows a mode rate decline when we compare to the years of 2004/05 and 2005/06. The
reason for this is that due to the stability weather condition and government policy gives more attention to the
field of health and protection program. Since group death benefit a combination of both term health benefit and
endowment death benefit, there is no need to explain each component term because of their feature is more or
less similar with group death benefit.
Medical Expense Benefit
The medical expense is one form of death benefit from life insurance in the NIC, According to the
table listed above, the amount of death benefit paid from 2003/04 to 2006/07 was birr 0.82 million of the
total claim during the same period. Heath Insurance Polices is a death benefit given for the expense incurred in
the course of medical treatment. These treatment and services that are obtained from cover are limited to (NIC,
Medical polices) are cost of any surgical appliance, director’s fees, charges of diagnostic laboratory taste, X-ray
and electrical treatments, cost of medicine and drugs, social insurance supplement and hospital confinement.
However, the medical insurance policy does not give cover for all kind of medical expenses, some
of these are general diseases, intentional self injury, suicide, pregnancy and child birth, injury directly or
indirectly caused by war and war like risks, expenses incurred without a registered in medical policy, employing
private nurses cost and purchasing medicines and drugs unless those medicines are given during hospital stay or
while obtaining outpatient surgery. As we show in the table 4, even if it accounted the largest share next to the
group death claims. And its trend is increasing from time to time due to the effect of HIV AIDS and the
disease of malaria as well as other disease like TB, kidney and heartdiseases.
Individual Death Benefit
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Death benefit is the amount of paid to beneficiaries following the death of policy owner (insurer). The
total amount of claims paid for death claims was birr 0.21 of the total claims incurred from year 2003/04 –
2006/07. It is the lowest claims payment compare to the payment made in other classes or group death benefit
and medical expense benefit of business during the period. When the policy owner happens to get sick or die,
the dependent have be bear the expense of illness or funeral. Therefore, this benefit solves these problems and
make dependent to be safe in the loss of future earnings, which means the death benefit helps the
dependents to continue undisturbed financially (NIC, 2007). As the above table depicts, the amount of claims
paid for individual death claims was increasing from time to time. The reason is that due to the high prevalence
of HIV AIDS which is one of the main factors that increase the death ofindividuals.
Mortgage Protection Assurance (MPA)
It is one of the benefits that provided when there is a claim by the policy owner. The amount of claim
incurred during the last four years (2003/04 – 2006/07) which regard to these class was 1.62 million birr of
the total as indicated table 4.
3.4. Performance Analysis of Life Insurance by Different Cost Ratio Mechanism
In the activities of an insurance service the main measurement of performance is using different cost ratios
method. And by doing such things this part of the paper tries to present the performance of life insurance
business in NIC. There cost ratio measurements include the claim ratio, management expense ratio,
commission payment ratio and total cost ratio.
100*
Pr
=−
emiums
Claims
ratioClaim 100*
Pr
=
emius
Expenses
MER 100*
Pr
=
emium
Commission
CPR
( )100*
Pr
++
=
emiums
CommissionExpensesClaims
TCR
Where MER is management expense ratio, CPR is commission paid ratio and TCR is total cost ratio
This paper used to analysis the above three types of ratios based on table 5,which presents claim payment
ratio, management expense ratio, and commission paymentratio.
Table 5. Performance Management of Life Insurance using different Cost Ratio’s (2003/04 – 2006/07) in Birr
and Percent
Years Gross
premium
Total claim
paid
Claim
ratio
Management
expense
Expense
ratio
Commission
expense
Comm.
ratio
Gross claim
paid
Gross
ratio
2003/04 2317198 676088 29.18 238034 10.27 37982 1.64 952104 41.09
2004/05 3054602 1054214 34.51 3727627 12.20 98219 3.22 1525060 49.93
2005/06 3375377 1349917 39.99 400414 11.86 66180 1.96 1816511 53.81
2006/07 4580864 1033581 22.56 289327 6.32 38178 0.9 1362086 29.78
Total 13328041 4213800 30.87 1300402 9.76 241559 1.81 5655761 42.14
Source: computed from annual statement of NIC’s life mainbranch.
As the above table shows, the total claim ration of year 2003/04-2006/07 was 30.87 percent and which
is around birr 4.11 million. It is highest share when it compared with the other types of expanses. In addition
to these, there is an in all years in average. This increasing trend of claims ratio in all years is average. This
increment in claim ratio is related to an increase in death and illness due to low standard living. The second
type of expanses described in the table is management expanses which includes salaries and wages of
employees, different kinds of employees, different kinds of employee’s benefit (or medical expense, tuition
fee, etc) repair and maintenance, fuel expense deprecation and other expenses. The average management
expense ratio for the years 2003/04 – 2006/07 was 9.76 % and it is the largest one next to the claim ratio. The
management expense ratio shows a fluctuation between years, but it shows an increase trend between 2003/04
and 2004/05 and also it shows a decreasing for the remaining years. The third type of expense incurred by a
company, as shown in the above table is an expense that is paid to commission agents. The average
commission expense paid agents in years 2003/04 - 2006/07 was around 1.81% and when we see the figure in
relation to the claim ratio and management expense ratio it is low. As commission payment to agent as a
direct relation with premium by them, the amount of commission payment to agents as a direct relation with
premium by them, the amount of commission expense is raised when the premium collection is high and vice
versa. The total cost ratio (claims, management expense and commission paid), indicants the over all
probability of the company. As table 5 shows, the total cost ratio for the years under consideration was around
42.44% and which is around birr 5.66 million.
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48
3.5. Factors that affects the growth of life insurance
Identifying the factors that affect the growth of life insurance is the main and the last objectives of this
study. Like other goods and services the growth of life insurance is affected by the demand and supply
of the insurance services. There are many factors that affect. The demand and supply of insurance services,
the major ones are presented bellow.
3.5.1. Factors that affect the demand life insurance
The demand for life insurance services is positively correlated to income of individuals (I), benefit from the
service (B), good attitude towards insurance (A), and tax incentive for buying life insurance(T). The demand
for insurance also negatively related to price of the premium (P). Mathematically,
( )TABPIfDi ,,,,= Where Di =Demand of insurance industry (Wondwossen, 1999).
The major factors that affecting demand for life insurance are the following:
Awareness and attitude towards insurance services
This is the main determinant that affects the demand of people of insurance cover. Awareness and
attitude of or the feeling of being exposed to many risks prays a major role in the demand for insurance.
Income and wealth
There is a direct relationship between the demand for life insurance cover and income growth i.e. the
growth of the demand for life insurance comes with rising income of the people. In addition, growth brings an
increase in demand from firms for insurance protection (R.L. Carter, 1979). In general terms, in country level,
increase in living standard of the society will lead to an increase in the demand life insurance. In this respect
a country with low standard of living (Ethiopia), the population will not afford to pay premium and this might
be the one and the main negative factors for the growth.
Price of insurance (premium)
The decision whether to buy insurance (demand for insurance) will still depend on the rate of
premium required relative to the consumer’s estimate of the expect loss (R.L. Carter, 1979). The lower the
premium rate the greater the incentive to insure. It means that sensitivity to price if one of the factors that
influence demand for insurance. The low of demand operateshere.
Compulsory insurance
It is clear that if the certain type of insurance is made compulsory, the demand for that type of insurance
is likely to increase. This means that there is positive relation between compulsorily of insurance and its demand.
However, due to the absence of low that makes life insurance is compulsory in Ethiopia, especially employers
are not forced to buy insurance for their works by law, the demand for insurance is very much low.
3.5.2. Factors That Affect Supply of Life Insurance
The supply of life insurance is positively related to income of individual (I), number of customer (N), and
negatively related to the extent of risk (R) cost of insurance such as claims and expenses (C) and level of
capacity (L). Mathematically this was explained as below.
( )LCRNIfSi ,,,,= Where Si = Supply of insurance industry (Wondwossen, 1999).
The amount of insurance policy that insurance companies are ready and willing to supply is limited to the
type of risk. So, the fortuitousness of the risk plays a considerable role in affecting the supply of insurance
policies is the financial bas of the company. In general an insurance company decides whether to supply or
not the insurance cover by looking its financial strength, the price it changes (premium), the amount of risk
and its occurrence and the existence of other competitive companies.
4. Conclusion
The first objective of the paper was examining the premium collected and claims paid in each classes of life
insurance supplied by the company. By examining this, the researcher has looked the following two findings.
Firstly the gross written premium and net written premium showed on increasing trend. But there is an ups
and down of the percentage change because of unhealthy completion between non private and other private
insurance companies. Secondly even if there are new classes of life insurance that was sold in NIC, the
structure of life insurance in terms of diversification of the source of revenues is limited to small classes of
the business. The amount of the premium collected and claims paid in these classes of the insurance is not
proportionally distributed. The data shows that amount of premium collected from group life insurance was
6.31 million birr and this implies about 45% of the revenue comes from it during the last four years. Next to the
group of life insurance, the term life insurance contributes about 4.73 million birr which is about 32% of the
8. European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.6, No.31, 2014
49
total premium (revenue) collected during previous four years.
The end result of the data shows that there is a direct correlation between premium collections and
the claim payments i.e. the classes of life insurance which contributes the large amount of also incur higher
claims (cost). According to the data presented before, the group life insurance contributed large in revenue
(premium) which in about 43% of the total revenue of the life insurance. In addition, it incurs great cost (claim
from among other classes of the life insurance).
The second objectives of the study is analyzed the performance of life insurance in Nile Insurance Company.
Being our finding there is low performance of life insurance not only in NIC but also in other private insurance
companies. These is because of low level of income of the majority of the population, the higher occurrence of
risk in life insurance that raises costs and minimize the profit, lack of awareness and attitude oh the public
towards the life insurance and its benefit, lack of trained manpower in areas of life insurance and the others.
Looking the trend of life insurance in NIC was the third objective of the paper. According to these
objectives this study was examined to show the trend of life insurance in the company by looking the life fund
of the company with major expense occurred. As the finding of the study, there is an increasing trend in life
fund in the Nile Insurance Company. As evolution of life operation made by the company there is large
increase in life fund as of 2006/07 and almost half decline in management expense of thecompany.
The last objective of this study was the examining factors that hinder the growth of life insurance
business. There are many factors that affect the growth of life insurance. Among these; lack of
knowledge and awareness about the importance of life insurance in the society, high concentration of branches
at the cities and big town of the country, low level of income of the majority of the population which creates the
hindrance to pay the insurance premium and which decrease the demand of the insurance, price of the insurance
is very high when it compared to the purchasing power of the people of the country which decreases the
demand for life insurance and there is no compulsivity of life insurance in our country which makes the demand
for life insurance to be low.
Acknowledgement
First, I would like to express my heartfelt thanks to my advisor, Ato Wubet Kifle, who gave me
valuable suggestions and comments while writing this paper. I am indebted to the underwriter of the Nile
Insurance Company, Ato Assegid, for supplying me with necessary financial data and some relevant documents.
Finally, I would like to express my gratitude to all people who have helped me specially my family and Mrs
Melkamech Dessu and Urge Melaku who typed the paper.
5. References
Encyclopedia (1992). The World Book Encyclopedia, volume – 10, world Book, Inc, USA
Feseha Afework (1986). Risk Management and Insurance, Addis Ababa University College of Commerce, Addis
Ababa, Ethiopia.
NIC (2007), Annual Reports, 2003/04 – 2006/07, , Addis Ababa, Ethiopia.
R.L Carter (1979). Economics and Insurance.
Wondwossen (1999). Structure, Conduct and Performance of Insurance Services
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