Gross Premium Income and Claims Settlement of Marine and Aviation Insurance in Nigeria.

Authors

  • Dr. Augustine ogorchukwu ISIMOYA Department of Actuarial science and Insurance, University of Lagos, Nigeria
  • Oluwaleke Ebenezer Akindipe University of Lagos

Keywords:

marine and aviation insurance, premiums income, claims settlement, premium calculation principles, premium rating

Abstract

Maritime and aviation facilities carry a sizable percentage of world trade by volume and value, with the percentages being more significant in developing nations and creating millions of employment. The most significant point of interaction between the insured and the insurer in the maritime and aviation sectors is the claim, which is the lifeblood of the viability of insurance. This study compared claims settlement in Nigeria's marine and aviation insurance markets to gross premium income between 2011 and 2021. The Nigerian Insurers Association (NIA) annual reports and digest were used to extract information on gross premium income and gross claims paid for the time period. The data were subjected to a stationarity test, which showed that the data are stationary at the 1%, 5%, and 10% levels of significance. The computed probability value of 0.0866 using the ordinary least squares regression is larger than the 0.05 significant value, demonstrating the statistical insignificance of the data. The independent variable, gross premium income, accounts for 29.12% of the payment of the total claim, according to the linear coefficient of determination (R2= 0.291294). The link between gross premium revenue and gross claims payment for marine and aviation insurance was therefore found to be insignificant

References

Afolabi, T. S. (2018). Effect of Claims Payments on Profitability in the Nigerian

Agu, K.O.C. (2019). Claims Settlement in Nigeria. Enugu, Immaculate Publications Ltd. Airplane Manufacturers Following Aviation Disasters”. Canadian Journal of Finance 21(2), 23-45

Akah. L. (2020) . Why aviation insurance is inefficient, by experts? National Insurance and Stock Returns in the Airline Industry”. Journal of Risk and Insurance 54,

Angima, s. & Mwangi, H. (2017). Fire Insurance Laws and Claims. London: Chartered Institute of Applied Research, 3 (5), 389-391.

Baker. D. (2019). Service quality and customer satisfaction in the airline industry: a comparison

between legacy airlines and low-cost airlines. American Journal of Tourism Research, Business & Economics Review,20(2), 9-22.

Butler, S. & Francis, P. (2021). Economic slowdown: Insurers worry as income from premiums nosedives. Vanguard, Retrieved from http://www.vanguardngr.com/2015/10/economic-slowdown-insurers-worry-as- income-from-premiums-nosedives/

Caren, A, & Muwangi, H. (2017), The effect of risk parameters on decision-making processes.

Cederholm, T. (2019). The global airline industry contributes to economic development Retrieved at http://thenationonlineng.net/why-aviation-insurance-is-inefficient-by-expert/

Chance, D., and S. Ferris, (2017). “The Effect of Aviation Disasters on the AirCommission of Nigeria (NAICOM).The Nation online news. URL: http://thenationonlineng.net/why-aviation-insurance-is-inefficient-by-expert/

Daniel, F. (2019).Prompt Claim Settlement, the Best Advert for Insurance Firms.

David Bernoulli. (1738). Statistical inference using Extreme Value Order statistics. Annals of

Davidson, W., P. Chandy, and M. Cross, (2017). “Large Losses, Risk Management Economics and Policy 21, 151-165.for operational risk. Retrieved from https://people.math.ethz

.ch/~embrecht/ftp/manuscript.pdf http://marketrealist.com/2014/11/global-airline-industry-contributes-economicdevelopment/http://www.swissre.com/media

/news_releases/nr_20130909_sigma_marine_aviation. Html http://www.thisdaylive

.com/articles/

Igbokwe, M. I. (2017). Major problems associated with the Nigerian ports system and Insurance Industry. Advances in Social Sciences Research Journal, 5(4) 94-101.insurance, finance, hydrology and other fields Boston: Birkhäuser, NY. International Journal of Business and Commerce. 3(10).

Kalani, M., Salunkhe, H. A., & Ahirrao, M. B. (2013). Economic slowdown: Insurers worry as income from premiums nosedives. Vanguard, Retrieved from http://www.vanguardngr.com/2015/10/economic-slowdown-insurers-worry-as- income-from-premiums-nosedives/

Katides , A. J. (2020). Extreme Value Theory for risk managers, Retrieved http://www.macs.hw.ac.uk/~mcneil/ftp/cad.pdf Life Insurance Company, Kozhikode, Indian Institute of Management.Loss Adjusters.making, Insurance, Mathematics and economics, 6, 237-244.Nigeria. International Journal of Business and Commerce. 3(10).

Ofori, A, (2012). Statistical analysis of extreme values with application to

Olusegun, D. G. (2019) Computing Likelihood Estimates for the Generalized Pareto Distribution,

Onuoha, R. (2018). Economic slowdown: Insurers worry as income from premiums nosedives. Vanguard, Retrieved from http://www.vanguardngr.com/2015/10/economic-slowdown-insurers-worry-as- income-from-premiums-nosedives/

Oshinloye, M. O. (2019). The Impact of Insurance Activities on Economic growth.

Oyekan, D. (2013). R: A language and environment for statistical computing. R Foundation for Statistical Computing, Vienna, Austria. URL https://www.R-project.org/.

Oyeniyi ., J., Abiodun, P., Obamiro, F, Moses., V.& Osibanjo Y (2016). Infinite mean models and LDA

Rowther, G (2013). Empirical comparison of Extreme Value Theory settlement ratio of LIC with other insurance companies in India. Indian Journal of Social Science. 3(4).

Soye , S. & Momoh, R. (2021). Enhancing Competitiveness: The Case of the Indian Statistics, 3, 119-131.

Stittu, M. A. (2018). Role of insurance companies in Nigeria's economic development (MBA dissertations). Ahmadu Bello University, Zaria.suggested solutions Unpublisher Seminar Paper

Swiss Re (2019). Navigating Recent Developments in Marine and Airline Insurance. Sigma study No 4.

Thana, E. (2016). Maritime transport and tourism sustainable development. 1st Annual International Interdisciplinary Conference, AIIC 2013, 24-26 April, Azores, Portugal -Proceedings-933.the Performance of Nigeria Insurance Industry. International Journal inManagement and the process. NY, Booz & Co.Transport Industry: A Financial Market Perspective”. Journal of Transport

Unachukwu, J. C, Afolabi, M.A, Alabi, E. (2019). Effect of Prompt Claims Settlement on

Uruakpa , G.E. (2019). Principles of Risk Management and Insurance. 10th ed. New vis-à-vis other methods of VaR Estimation using ASEAN+3 Exchange Rates. DLSU

Walker, T., D. Thiengtham, and Y. Lin, (2019). “On the Performance of Airlines and York, Pearson Education.

Yusuf , T. O. & Dansu, F. S. (2018). Effect of Claim Cost on Insurer's profitability

Yusuf. T.O (2017). Banking and Insurance. Kathmandu, Asia Publication.

Downloads

Published

2022-12-30

Issue

Section

Business Administration and Business Economics