Insurance is a unique industry and one of the contributing tractors to its uniqueness is the product on the insurer that is, the promise to indemnity at a future date, is tangible. It has been generally accepted that insurance industry exist to guarantee the continued existence of other industries (Mehr and Camack (1976).

As an illustration if a factory that is insured is destroyed, insurers will indemnify the insured by replacing or reinstating the factory thereby guaranteeing the continued existence of the factory. The reputation of any insurance company depends to a large extend on the sort or claims services provided by that insurance company to its policyholders.A company may be run very efficiently and soundly in every respect, its policies may be delivered promptly and renewals handle efficient claims department may ruin the reputation of the insurance company (OJUKWU 2006: 32).

And company maybe run very efficiently and delivered promptly and renewals handled efficiently, but an unreliable and in efficient claims department many ruin the reputation of the insurance company.

However, any insurance company that wants to safeguard its future and sustain growth must take its claim settlement obligation very serious in order to survive in the comparative insurance markets.


I.G.I (industrial and general insurance) commences business in 1992 as a composite insurer to transact the business of life and general insurance (including pensions and special risk).

The company quickly established a reputation for exceptional competence in the delivery of customer centric services as well as product innovation with a strong capital base, highly qualified professional and deployment of modern technology for speed and efficiency, insurance companies has become the preferred insurer for individual and corporate clients seeking premiums insurance and related financial services and related financial services.

In 1996, four years after the insurance company in Nigeria achieve N1billion in premium income.

We have, within our few years of existence been able to power ourselves as market leasers in the insurance companies. In 2004, manicured its leadership position in insurance company with a premium income in excess of N 4billion, the highest in volume of business by any private insurance company in Nigeria.

In insurance company it also has a wide and diversified invest profile which include ownership and majority equity holing.

In companies engaged in telecommunications services, mortgage banking, aviation, oil and engineering services, forestry and health care delivery services amongst others.

From inception, insurance companies has demonstrated exceptional competence and expertise in the underwriting of specialized risk in oil and energy marine, aviation, engineering and industrial risk management.

This reputation earned the company national recognition in 1996 when it was appointed by federal government as the leading member of a consortium of four insurance companies to handle the insurance program of the Nigerian national petroleum corporation (NNPC), the federal government owned oil exploration and refining company.

The remarkable performance achieved in 1996 led to the re-appointed of the insurance companies from 1997 and 1998.

Insurance companies also handles the insurance programmes of foreign oil companies operating in Nigeria including the shell petroleum development companies of Nigeria, ELF petroleum Nigeria, agip oil company, addax petroleum and pan ocean oil corporation, among others.

In 2005, insurance company underlined its resolve to be a key player in the African insurance market when it acquired 60 percent majority shareholding in the national insurance corporation limited (NICL) of Uganda after a competitive international binding exercise.

Through recruiting, deploying, people with diverse talents and capabilities, the company has been able to build solid and substainable value added relationship with customers and other stakeholders.

Above all, the corporation emphasizes the promptsettlement to claims, several measure have been put in place to ensure that genuine claims are paid when due without any bottleneck.


Most business organization aim at achieving and sustaining growth in insurance business, however, efficient claim settlement immensely contributed to the growth of an insurance company.

However, in their bid to attain growth through claim settlement, insurers encounter the following problems.

  • Members of the public do not think/believe insurance companies settle claims.
  • Death of professionally qualified insurance personnel is responsible for poor underwriting results/loss in insurance companies.
  • Most of the claims lodge on companies are fraudulent.
  • Most of the insured do not insure for full value of risk because they do risk want to pay proportional premium (i.e) (full premium) under insurance a major problem to insurance companies.
  • Too much restriction on investment through legislations affect the investment income of insurance companies.
  • Too much restrictions on investment through legislation affect the investment income of income companies.

The major aims of this study is to investigate the role of claims settlements in the growth of an insurance company.

Therefore it specific objectives include

  1. To study the meaning of claim settlement
  2. To study the causes of delay in claim
  • The researcher will also evaluate the problems of the effects of government restriction to insurers to invest their funds.
  1. To examine the impact of claims settlement in growth of an insurance company examine the challenges of claim settlement.
  2. What is claim settlement?
  3. To evaluate the causes of delay in claim settlement by an insurance company.
  • How does government policies affect the way insurers invest their funds.
  1. To evaluate the extent of claims settlement on the growth of an insurance company.


H0:  delays in claims settlement do not affect the performance of can insurance companies.

H1: delays in claims settlement affects the performance of insurance companies.


H0: prompt settlement of claims does not increase public confidence n insurance and gradual guarantee of growth of the insurance company.

H1: prompt settlement of claims increases public confidence insurance and gradual guarantee of growth of insurance company.


H0: government policies affects or restricts the way insurers invest their funds.

H1: government policies does not affects or restricts the way insurers invest their funds.


The study will be of significance to the insuring public investors, underwriters and government.

As it deals with the ways of settling claims and how affects the growth of the insurance industry.

The insurance industry will understand the more, the effect claim settlement has people and maximize the knowledge by giving claims settlement without unnecessary delay thereby increasing the confidence the public have in insurance business.

The people will definitely be at the receiving end when the insurance companies efficiently pay settlement claims.

The investor on the other hand will have a rosy dividends on their investment when people’s confidence on the insurance company increases which will turn and also bring about increased profits. The government will symbiotically receive from the positive development by the spiral effect that the insurance business boom is going to have on the economy through increased taxed and other indirect means.


This research work cover the aspects, the role of claims settlement in the growth of an insurance company is a case selected for this project work. The name and address of the selected company is industrial and general insurance (I.G.I) plc; located IGI House 2, AgoroOdiyan Street, off AdeolaOdekuStreet, Victoria Island Lagos; Nigeria.

The above mentioned company is used as a case study due to the fact it is one of the founding pioneer o insurance companies in Nigeria and is a major stakeholder and playmaker in the Nigeria insurance setup. And its occupies a major part of the Nigerian insurance market.

  1. Claims: is a formal request to an insurance company asking for a payment based on the terms of the insurance company. Farlex financial dictionary (2012).
  2. Settlement: the payment of proceeds by an insurance company to the insured to settle an insurance claim within the guidelines stipulated in the insurance policy.
  • Insurance: is a contract represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.
  1. Insured: the person who obtains or is otherwise covered by insurance on his or her health life, or property.
  2. Insurer: a person or company that underwrites and insurance risk, the party in an insurance contract undertaking to pay compensation.
  3. Claims settlement: is an agreement between at least two parties to settle a legal claim with a payment.
  • Delay: is an occurance which can be sometimes deliberate in which an insurance company does not compensate the insured as at when due.
  • Funds: a sum of money saved or made available for a particular purpose.



Ojukwu (2006:32); insurance law and practice in Nigeria, Ibadan. Henemzin  books Nig (plc).

Zeckhauser, Richard (2008); insurance insights

Mehr and Camack (1976); principles of insurance.

Adams J (2012); impact of changing regulations on the industry.

Farlex financial dictionary (2012)