PROBLEMS AND PROSPECTS OF EXTENDING INSURANCE SERVICES TO THE RURAL AREAS. A RESEARCH PROJECT MATERIAL ON INSURANCE
The interest to write in this particular topic “Problems and Prospect of Extending Insurance Services to the rural areas” grow out of the present significant roles of insurance industry in extending service to the rural areas. The researcher discovered that the problems facing the extension of the service to the rural area by the industry is poverty, illiteracy and geographical locations. However, the objectives was to examine whether insurance companies extends service to the rural areas or not and if not, to identify the problems and prospects in providing insurance service to the rural areas. The scope of the study was limited to Oba in Anambra state as yardstick to other rural areas in Nigeria and leadway Assistance Co. Ltd to represent other insurance companies due to lack of time. Therefore, data interpretation gave the following findings that insurance industry should provide services to the rural dwellers that apathy and ignorance for insurance service hinder the extension of service to the rural people. This findings also recommended that all the insurance companies should start extending services to the rural areas and also assist in providing social economic activities
1.1 BACKGROUND OF STUDY
In today’s modern society, the need for extending insurance services to the rural areas by the insurance industry is of a great important. The insurance industries which part of financial institution exist for the purpose of indemnifying an insured in the case of any loss occurrence. Furthermore, the insurance industry in Nigeria and has not been accepted by its people as to take its rightful place in the nation’s economy.
The importance of the provision of insurance services has been recognized in modern Nigeria, through the various products offered by insurance firms, which are life assurance policies that is classified into individual life assurance, group life assurance and pension, and health insurance business while general insurance business like fire, marine, motor insurance business etc are offered to the consumers of insurance products who are individuals, social clubs, unions association etc.
However, products offered to these groups/ person(s) are for protection against losses incurred by them and keeping them in business. Similarly, it is a fact that the major problem facing the growth and development of the industry in Nigeria today is ignorance an apathy for insurance services in the country. For this purpose, business concerns which is also very peculiar to the rural dwellers who are not easily accessible due to geographical factors and lack of infrastructural facilities in the rural areas of the country.
Hence, the rural dwellers are mostly engaged in small medium scale activities such as subsistence forming, fishing, palm wine tapping, hunting e.t.c. which they may find difficult to buy insurance protection for their benefits against losses that might arise in the course of their daily activities.
Thus, poverty and high rate of illiteracy which is a real factor limiting against the development and growth of the industry in the rural area. In the essence, the industry should do well to solve the inherent difficulties faced by the rural dwellers in finding ways and means of taking insurance services to them at affordable prices(premium) increase their performance, efficiency and profitability by embarking on awareness campaigns and creating of good wills. Similarly, new products should be developed to suit their needs so as to attack and stimulate participation from the rural dwellers and to settle claims as at and when due with equity, modesty and quick response without prejudice.