THE EFFECT OF VALUE ADDED TAX ON REVENUE GENERATION IN NIGERIA (2011-2016)

THE EFFECT OF VALUE ADDED TAX ON REVENUE GENERATION IN NIGERIA (2011-2016)

Abstract

The study explored the impact of risk management on the performance of his Staco Insurance Plc in Lagos State.

The study used a survey study design. This study used primary data to gather information from respondents obtained through questionnaires. Questionnaires were distributed directly to the subjects in the population. The Taro Yamane formula for calculating the sample size of the population was adopted and used to select 177 respondents, adding 30%, equivalent to 230.

The research reveals that risk identification has a direct effect on productivity of Staco Insurance Plc and that the null hypothesis which states that risk identification has no significant effect on productivity is rejected because the p value is less than 0.05 (P <0.05); The research further revealed that risk evaluation has a direct effect on corporate image of Staco Insurance Plc and that the null hypothesis which states that risk evaluation has no significant effect on corporate image is rejected because the P value is less than 0.05 (P <0.05); The research also revealed that risk monitoring has a direct effect on profitability level of Staco Insurance Plc and that the null hypothesis which states that risk monitoring has no significant effect on profitability level is rejected because the P value is less than 0.05 (P <0.05).

The study concluded that the risk management process adopted by an organization is significant in influencing or effecting an organization or firms business performance.

The study recommended that; the management of Staco Insurance Plc in Lagos state, to put in place cost-effective measures for the constant and timely risk identification processes in order to spot the entry of any risk that might pose as a treat to the establishment of effective and efficient business performance of Staco Insurance Plc; the management of Staco Insurance Plc in Lagos state, should constantly evaluate their risk management practices or system to identify if the mode or process used by them in the assessment of risk aren’t outdated; the management of Staco Insurance Plc in Lagos State should make sure that continuous monitoring of risk isn’t discarded, as a result to a temporary treatment assigned to a particular treat faced by the industry, that is, just because there are improvement doesn’t mean they are permanent.

CHAPTER ONE

INTRODUCTION

1.1 Background to the study

Risk management is a crucial discipline in business, particularly the insurance business (Omasete, 2012). However, it should be noted that risk management goes far back in time even before people could understand that the various practice they were involved in, was apparently the practice of the management of risk. In fact, history points out that some historians believe that gambling was the earliest method of risk management. Thousands of years before Internet users were able to play his poker online, it is established that people in various ancient societies played games with dice and bones. Moreover, over 2000 years ago, people were playing games that evolved into chess and checkers. Some of the historical evidence that led to the probability theory that profits are the sole authors of risk management came from the work of various famous authors. It has been noted that famous mathematicians wrote to each other about gambling in his 16th century, and this correspondence is thought to have provoked resentment against the probability theory in use today (Angus, 2015). On the other hand, Angus (2015) found that risk management:
History, definitions, and critiques that the modern conditions of risk management arose after World War II.

On the other hand, insurers are known to have increased their interest in risk management in recent years. According to Meredith (2014), she suggested that insurance management should make prudent decisions about insurance risk in order to avoid excessive claims settlement losses. We have found that insurance companies, which are seen as risk-taking institutions, can and do fail if their risks are not managed effectively.

Nevertheless, the primary function of insurance companies should be considered to be to spread risk among various participants (Merton, 2013). However, this indicates that risk management should be a major aspect of insurers’ operations, and the main focus of this study is how these insurers assess the various risks that exist to their customers. It’s about understanding what you’re managing. Managing risks while protecting clients from such risks and how such risk management impacts business performance. 1.2 Problem Description

Insurance companies are in the business of managing risk. Businesses manage both customer risk and their own risk. To do so, risk management must be integrated into the company’s systems, processes and culture.

However, according to Chris (2017), Staco Insurance Plc, like most other insurers in Nigeria, continues to struggle, partly due to the impact of sluggish customers and the ongoing economic recession. The economic dilemma caused by high inflation and declining unusable earnings in a recession has had a negative impact on the insurance industry. As a result, insurers’ revenues declined as many customers continued to risk shortening their policy terms, resulting in lower premiums paid on their policies.

According to the Nigerian Insurance Industry Report (2017), like most other insurance industries, all are affected by the macroeconomic environment. The downturn in Nigerian wealth, triggered by the global oil price decline since 2014, has recently led to changes in insurance product consumption or usage patterns. It was noted that various non-life insurance operating segments have experience in the life insurance operating segment. He also found that the Customer Price Index (CPI), which is used to measure inflation, rose to 18.6% in 2016. As inflation increased, long-term savings began to lose value over time (at an average inflation rate of 18.6%, £100 would be saved, compared to now £45 in 5 years and £8 in 15 years in the same range). pounds). , and this discouraged savings and, as a result, favored investing in high-yielding securities. However, rising inflation has also been found to have a direct impact on the industry’s operating costs, reducing profits. As of 2016, approximately 28% of his GPI in the insurance industry is paid in underwriting costs, including acquisition and maintenance costs (Ada, 2017)

Nevertheless, according to Omasete (2012), research in the areas of risk management and performance insurance societies is very limited. This study is a systematic study and contribution to the risk management and performance of insurance companies in Nigeria.

1.3 Purpose of the survey

In general, the purpose of this study is to examine the impact of Staco Insurance Plc’s risk management on its operating results. The specific objectives of this research are to:

Study the impact of risk identification on productivity at Staco Insurance Plc in Lagos State.
To determine the impact of risk assessment on the corporate image of Staco Insurance Plc in Lagos State.

Determine how risk monitoring will affect the profitability levels of Staco Insurance Plc in Lagos State.
Examine the combined effects of risk management variables on the performance of Staco Insurance Plc in Lagos State.
1.4 Research question

During the course of your research, answer the following questions:

What impact will risk identification have on the productivity of Staco Insurance Plc in Lagos State? What impact will the risk assessment have on the corporate image of Staco Insurance Plc in Lagos State?
How is risk monitoring impacting the earnings of Staco Insurance Plc in Lagos State?
What is the combined effect of risk management variables on the performance of Staco Insurance Plc in Lagos State?
1.5 Research hypothesis

H01:
Risk identification does not have a significant impact on the productivity of Staco Insurance plc in Lagos State.

H02:
This risk assessment does not significantly affect the corporate image of Staco Insurance Plc in Lagos State.

H03:
Risk monitoring does not significantly affect the profit of Staco Insurance Plc in Lagos state.

H04:
Risk management variables have no significant combined effect on business performance of Staco Insurance Plc in Lagos state.

1.6 Operationalization of the Variables

Y= f(X)

Where,

X = independent variable

Y = dependent variable

Where,

Independent variable

X = Risk management (RM)

Dependent variable

Y= Business Performance (BP)

X= (x1, x2, x3)

Y= (y1, y2, y3)

Where,

x1 = Risk Identification (RI) y1 = Productivity (P)

x2 = Risk Evaluation (RE) y2 = Corporate Image (CI)

x3 = Risk Monitoring (RM) y3 = Profitability Level (PL)

Sample Equation,

y1 = f(x1)…………………………………..fn (1)

y2 = f(x2)…………………………………..fn (2)

y3 = f(x3)…………………………………..fn (3)

Y = f(x1, x2, x3)……………………………fn (4)

Regressionally, where;

y1 = α1+ β1×1 + µ………………………………………eqn (1)

y2 = α2+ β2×2 + µ………………………………………eqn (2)

y3 = α3+ β3×3 + µ………………………………………eqn (3)

Y = α1 + β1×1 + β2×2 + β3×3 + µ………………….…….eqn (4)

Substitutional Model

P = α1 + β1 (RI) + µ…………………………………….eqn (1)

CI = α2 + β2 (RE) + µ…………………………………..eqn (2)

PL = α3 + β3 (RM) + µ………………………………….eqn (3)

BP = α4 + β1 (RI) + β2 + β3 (RM) + µ…………………..eqn (4)

Where;

α1,α2, α3, α4 depicts how well employ is retained in the absence of risk identification, risk evaluation and risk monitoring.

β1, β2, β3, β4 measures how a change in the various independent variable will affect the dependent variables.

µ captures the influence of other variables that affect (Business Performance) but which are not explicitly included in the model. 1.7 Scope of investigation

This study focuses on the impact of risk management on the performance of his Staco Insurance Plc in Lagos State. This research focused on Staco Insurance Plc in Lagos State, Nigeria. Because it is headquartered there and Lagos State is considered the economic center of the country. The total number of Staco Insurance Plc employees formed the study population as they had the opportunity to lead a team at some point in the course of carrying out their responsibilities within the 2018 insurance scheme and research framework.

1.8 Validity of research

This research is important to all stakeholders within the organization, including shareholders, management and the general public, as follows:

First, the research is important to organizational stakeholders because it shows how risk management can improve business performance and, consequently, profit margins.

1.9 Definition of Operating Terms

dangerous:
It is an event or situation that can affect the achievement of one or more corporate business objectives (Jan, Vanessa, Wiebke, & Aykut, 2017).

crisis management:
This is the coordination of activities related to risk monitoring and management (Jan, Vanessa, Wiebke, & Aykut, 2017)

performance:
Refers to an organization’s ability to use its resources efficiently and effectively to achieve its goals (Daft, 2014)

Insurance company:
It is the business of providing insurance in the form of compensation for loss, damage, injury, medical treatment or hardship in return for premium payments (Business Dictionary, 2018).

risk assessment:
This is seen as a fundamental step in recognizing dangerous events that can disrupt good working order in the supply chain (Ennouri, 2013).

risk assessment:
This is the process used to compare an estimated risk to specific risk criteria in order to determine the significance of the risk (Business Dictionary, 2018).

Risk monitoring:
This is the process of tracking and assessing the level of risk within an organization (Business Dictionary, 2018). Productivity:
It is the ratio of the amount of output to the amount of input (Paul, 2013).

Corporate image:
This is said to be the mental image of how stakeholders perceive the company (Bouchet, 2014).

Profitability level:
It can be defined as the ability of a particular investment to generate a return on its use (Monica, 2014).