Proceedings of 11th International Business and Social Science Research Conference
8 - 9 January, 2015, Crowne Plaza Hotel, Dubai, UAE. ISBN: 978-1-922069-70-2
An Evaluation of the Post Recapitalization Performance of
Insurance Industry in Nigeria
Ibeabuchi Helen Ifeyinwa
One important sector of the financial system which requires adequate attention
especially in terms of capital regulation is the insurance sector, majorly because of the
role insurance play in the growth and development of any economy, and more so the
low level of acceptance of insurance business by majority of Nigerians, as a result of
the past unethical practices by Insurance companies. Consequently, most Nigerians
have developed some negative perception about the Insurance business, making the
insurance sector not contributing as expected towards the economic development of
the country. The Federal Government of Nigeria in its bid to save the insurance
industry, restore investors and public confidence in the industry as well as helping the
industry contribute adequately to the economy, in 2005 along with the National
Insurance Commission (NAICOM) announced the recapitalization policy for the
industry, which took effect February, 2007. The main objective of the study was to
evaluate the post recapitalization performance of the industry from 2007 – 2012, in
terms of achieving the objective of the recapitalization. The empirical research design
was used to evaluate post recapitalization performance of the industry based on the
investment capital, premium income and claim settlement as compared to the prerecapitalization period. The special package for social sciences (SPSS) was used to
analyse the propositions. The study showed that the aim of recapitalization of the
insurance industry in Nigeria have not been achieved largely because of some good
intended policies of the federal government which is having some negative impact on
the industry and other identified problems. Hence the study recommends among other
things, that efforts be made to reconsider some of these government policies militating
against the performance of the insurance sector in Nigeria, also there is need for
further recapitalization of the industry as the present capital base of the industry is
grossly inadequate.
Ibeabuchi Helen Ifeyinwa, Department of Insurance, Institute of Management and Technology, Enugu Nigeria.
Email: ibeabuchiheleni@yahoo.com