IMPACT OF THE NIGERIA CAPITAL MARKET ON THE GROWTH OF INSURANCE SECTOR IN NIGERIA
ABSTRACT
The purpose of this study is to analyze the impact and usefulness of capital markets in realizing the economic contribution of the insurance industry. Despite the low number of listed insurers, prospects for improvement are bright after recent capitalizations. Any issues that arise during the investigation will be addressed through the implementation of the proposed solution. Finally, we have found that capital markets have contributed to the growth of the insurance sector in Nigeria.
chapter One
1.1 Introduction
For a country to be economically sound, it must experience a growing economic sector. Achieving a steady rate of economic growth is a concern for Nigeria and other third world countries to promote national development. Economic growth and development are accompanied by increases in real gross national product (GNP) per capita and population well-being.
In order to achieve economic growth, certain constraining issues need to be addressed. These problems include technological development, human resource development, low productivity, capital formation, and price stability (Iniodu 1996). Also, as Nwankwo (1991) notes, capital formation, a function of an efficient financial system, is very important. Nigeria’s capital markets are an important part of the financial system that plays a role in this allocation.
The market is the long-term objective of financial markets. It consists of markets and institutions that facilitate the issuance and secondary trading of long-term financial instruments. Unlike financial markets, which primarily provide short-term funding, capital markets provide funding to industries and governments to meet long-term needs. The Capital Markets has a mission statement to “enhance Nigeria’s capital markets to meet the country’s socio-economic development needs”. The purpose of capital markets is to mobilize long-term funds for investment. Capital markets perform different functions. Capital markets provide an additional channel to activate and mobilize domestic savings for productive investment, and are an alternative to bank deposits, real estate investments, and consumer credit financing, and are also able to reduce inflation, currency, and better protection against depreciation. Another important function of the Nigerian capital market is to improve efficiency management changes compared to the management or potential mechanisms of public sector enterprises. Capital markets facilitate the transition of companies from the public sector to the private sector and facilitate privatization by making new issues more marketable. Capital markets use several instruments to raise funds. These instruments are common stock and preferred stock. Debt Securities Government bonds (federal and local). Corporate Loans/Bonds and Bonds. Capital market players are funders such as individuals, mutual funds, pension funds, insurance companies, government intermediaries, brokerage firms, home issuers, registries, accounting firms and regulators. Securities and Exchange Commission. Nigerian Stock Exchange, Central Bank of Nigeria, Federal Ministry of Finance.
However, there are growing concerns about the efficiency of Nigeria’s capital markets and the role of the insurance sector. Ajayi (1984) called it “efficient in the sense that the capital market increased the country’s output and distributed the output fairly.
However, Williams (1988) sees this capital market as “inefficient in pooling money for investment”, and by involving only a few elites, widens the gap between rich and poor. It is pointed out that it is useful for This project
1.2 Problem Description
To understand this topic, we will take a look at the capital market for insurance growth in Nigeria. I would also like to believe that insurance companies are members of the capital market whose function is, among other things, to channel long-term funds from surplus to deficit for investment purposes. This means that insurers are inefficient in pooling funds for investment. He added that few elites would receive such funds, creating a gap between rich and poor.
Now I would like to identify the factors that have made the insurance sector so efficient and the factors that should correct the capital of both life and non-life to He 20 million and He 50 million. Common business is oil and gas. insurance, and other activities. The minimum paid-up capital for reinsurance is £150 million (Akpan 1999). One of the main sources of information for endowment insurers is the capital markets. This was explained in detail at the beginning.
We examined pre-tax and post-tax profit growth for five publicly traded companies: Prestige Assurance, Nigeria Insurance and Allco Insurance. Allco recommended his 70 million Naira to shareholders, although a dividend payout of 55,440,625 Naira was also recommended. This was made possible by the 2003 allotment of stock acquisition rights to all three of his insurance companies and their turnaround plans.
The situation is different for Crusade and Unic Insurance, which recorded a slight decline in 2002 and he in 2001, despite the impact of the capital markets. This fully understands that the main function of insurance companies is to indemnify, get people back to their original condition before they are damaged, and finally explain why few insurers are listed. It may be due to the general implications of volatility risk that we want to know.
1.3 Purpose of the survey
The purpose of this research is to:
1) To explore capital markets in the development of the insurance sector.
ii) assess the impact of the Nigerian capital markets on the growth of the insurance business in Nigeria;
iii) identify the problems faced by insurance companies that are beneficiaries of the services provided by Nigeria’s capital markets;
iv) make recommendations for the efficient management of Nigeria’s capital markets; 1.4 Importance of research
Currently, the Nigerian government is ramping up its efforts to boost the country’s economy. The need to investigate the fact that it has led to Nigeria’s economic growth cannot be underestimated. This study will enhance our understanding of economic development through the participation of the insurance subsector in capital markets.
Therefore, this study is considered important for:
i) Government for policy making;
ii) the world of business for investment and capital formation;
iii) The results of your work will serve as a reference for research. iv) This research enhances researchers’ knowledge of the capital markets and insurance sector.
1.5 Research scope and limitations
In conducting this study, researchers faced several limitations. like that:
1) Time constraints:
The period allowed for this study is limited and inadequate for long-distance travel materials.
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