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 of also incur higher claims (cost).
Table of Contents
1. Introduction
1.1. Background
1.2. Statement of the problem
1.3. Objectives of the study
1.4. Scope of the study
1.5. Significance of the study
1.6. Organization of the study
2. Literature Review
2.1. Theory of Insurance
2.2. Types of Life Insurance
2.2.1. Ordinary life insurance
2.2.2. Industrial Life Insurance
2.2.3. Group Life Insurance
2.2.4. Credit Life Insurance
2.3. Supplementary Benefits (Riders)
2.3.1. Accidental Death Benefit (ADB)
2.3.2. Accidental Death and Dismemberment (AD&D)
2.3.3. Comprehensive Accidental Indemnities (CAI)
2.3.4. Accelerated Death Benefit
2.4. Health Insurance Rider
2.5. Underwriting
2.6. Sources of Underwriting Information
3. Methodology of the study
3.1. Data sources
3.2. Analysis of data
4. Data Presentation and Analysis
4.1. The Structure and Trend of Life Insurance
4.1.1. The Structure of Life Insurance Business in Terms of Market Share
3.1.2. The Performance of life Insurance in NIC in Term of sources of Revenue /Premium/
3.1.3. The Trend of Gross Written Premium in Life Insurance
3.2. The Trends of the Life Fund and Underwriting Performance
3.3. The Structure of Life Insurance in Terms of Cost or Claims Incurred
3.4. Performance Analysis of Life Insurance by Different Cost Ratio Mechanism
3.5. Factors that affects the growth of life insurance
3.5.1. Factors that affect the demand life insurance
3.5.2. Factors That Affect Supply of Life Insurance
3.6. Human Resource Development in NIC
5. Conclusion and Recommendations
5.1. Conclusions
5.2. Recommendations
6. References
Objectives and Research Themes
The primary objective of this study is to analyze the insurance services provided by Nile Insurance Company, with a specific focus on its life insurance sector. The research investigates the structure, trends, and performance metrics of the company's life insurance portfolio over the period from 2003/04 to 2006/07 to identify key growth drivers and operational challenges.
- Performance analysis of life insurance based on premium collection and claim settlements.
- Examination of the structure and growth trends of life insurance activities.
- Evaluation of factors influencing the supply and demand for life insurance in Ethiopia.
- Assessment of human resource capacity and development within the organization.
- Identification of bottlenecks hindering the growth of private insurance companies.
Excerpt from the Book
2.2.1. Ordinary life insurance
Ordinary life insurance policies are marketed on an industrial basis, usually in units of 1,000; policy holders make predict premium payments. The major contracts of ordinary life insurance are of three types –term, whole life and endowment. The first, term insurance policy, is the closest to pure life insurance; it has no saving element attached. Essentially, an individual’s beneficiary receives a pay out at the time of individual’s death during the coverage period. The term of coverage can vary from as little as 1 year to 40 years or more. It may also be divided into three categories- level term, decreasing term, and increasing term contacts.
A) Level- Term Contracts: - A level term contract is issued for a constant amount during its term. For example, 5—years, 10—years, or 20—years are renewable term and term to 65. Level term contracts are particularly always renewable without of insurability. Thus, an objection if removed that was formerly attributable to this type of contact in that insured’s policy could expire and leave this person without and uninsurable.
B) Decreasing Term Contract: - When the amount of pure death protection gradually declines each year on a term contract, but the premium payable may be constant over the term. Decreasing term contract can be- mortgage protection insurance, gamily income policy and so on.
C) Increasing Term Contract:- term insurance protection can be arranged to increase each year, to correspond to a need that also increase and the premium payable is increasing over the time.
Summary of Chapters
1. Introduction: Provides background on the insurance sector in Ethiopia and outlines the research objectives, problem statement, and scope of the study regarding Nile Insurance Company.
2. Literature Review: Discusses the theoretical foundations of insurance, explores different types of life insurance products, and details underwriting procedures and sources of information.
3. Methodology of the study: Describes the case study approach utilized, including data collection from secondary financial sources and primary interviews with the life branch manager.
4. Data Presentation and Analysis: Presents empirical data on market share, premium trends, claim structures, cost ratios, and human resource development within Nile Insurance Company.
5. Conclusion and Recommendations: Summarizes the findings regarding premium performance, operational challenges, and provides strategic recommendations for future company growth.
Keywords
Life Insurance, Nile Insurance Company, Premium Collection, Underwriting, Claim Settlement, Endowment Insurance, Group Life, Risk Management, Market Share, Financial Performance, Insurance Demand, Ethiopia, Insurance Regulation, Human Resource Development, Cost Ratio.
Frequently Asked Questions
What is the fundamental focus of this research?
The research is a case study focused on analyzing the life insurance services offered by the Nile Insurance Company, examining its operational structure and performance.
What are the central thematic fields covered in the work?
The work covers premium growth trends, classification of insurance products (ordinary, industrial, group, credit), underwriting processes, and the factors affecting insurance supply and demand.
What is the primary objective of the study?
The primary objective is to analyze the insurance services of the Nile Insurance Company, with specific attention given to the life insurance sector's performance and development.
Which scientific methods were applied in the analysis?
The study utilizes a descriptive statistics methodology to analyze secondary data from financial statements, supplemented by interviews with the company’s life branch manager.
What topics are addressed in the main body?
The main body examines market share, trends in gross written premiums, the life fund's performance, claim ratios, management expense ratios, and the influence of socio-economic factors on life insurance growth.
Which keywords best characterize this publication?
Key terms include Life Insurance, Nile Insurance Company, Underwriting, Premium Collection, Claim Settlement, Risk Management, and Financial Performance.
How does the company's human resource capacity impact its performance?
The research highlights a significant scarcity of manpower at the M.A./M.Sc. level, noting that there are only four employees in the life insurance branch, which hinders service expansion and specialized operations.
What role does the government play in the growth of life insurance?
Government policies, particularly those regarding loan interest rates for housing, have been shown to impact the demand for Mortgage Protection Assurance, although the general lack of compulsory insurance laws remains a growth constraint.
Why does group life insurance generate the highest revenue for the company?
Group life insurance serves as the primary source of revenue (approximately 43%) because it is the most utilized product by corporate employers to cover their workforce, benefiting from centralized administration.
What is the correlation between premium collection and claim payments?
The study reveals a direct correlation, where the classes of life insurance contributing the largest amounts of premium revenue also incur the highest claims, such as group life and medical expense insurance.
- Arbeit zitieren
- Urgessa Tilahun (Autor:in), 2008, Analysis of Life Insurance, München, GRIN Verlag, https://www.hausarbeiten.de/document/279374
