ABSTRACT: Funds refer to cash equivalent or to working capital. The fundamental concept of working capital is relatively simple. It is used to denote the excess of current assets over current liabilities. The excess is sometimes referred to as “Net working capital and it can also be referred to as company’s assets which, in normal course of business, are convertible into other assets. The concepts of funds flow analysis may be referred to as the following terms:
Sources and application of funds statement; funds flow statement; movement of funds statements, and statement of changes in financial statement. The need for funds flow analysis arises because the profit and loss account and balance sheet do only show the disposition of the company at the beginning and end of the accounting periods, but do not show or identify the movements in assets and liabilities during the year and the effects on the net liquid funds. However, funds are important to an organization such that no organization can exist and continue to remain in business without adequate funds to meet its short term and long term obligations as well as meet their day transactions. Considering the peculiar nature of the industry, the following constitute the insurance funds;
Premium income from clients; other incomes such as annuities receivable.
The researcher decided to conduct a study on the funds flow analysis in an insurance industry to enable him to determine the peculiar ways by which this industry raises trades and uses their funds.
To facilitate the study, empirically two hypothesis were drawn and subsequently a field study was under taken to establish the validity or non-validity of the hypothesis. Both primary and secondary data were collected. But due to insufficient primary data the researcher based most of his work on secondary data, which includes oral interviews held with top officials of some insurance companies and by distributing questionnaires to 100 insurance companies. This research work did not only identify the problems but also offered solutions to the problems encountered by the insurance industry.
FUNDS FLOW ANALYSIS OF THE INSURANCE COMPANIES IN NIGERIA. ITS RETROSPECTIVE STUDY OF THE NIGERIAN INSURANCE MARKET BETWEEN 2008 TO 2011.
This topic involves denoting the ways and avenues by which insurance industry in Nigeria raises trades and uses their funds. It equally involves the sourcing and application of funds statements; funds flow statement; movement of funds statement; and statement of changes in financial positions. The need for fund flow analysis arises because the profit and loss accounts and balance sheets only show the disposition of the company at the beginning and end of the accounting periods, but do not show or identify the movements in assets and liabilities during the year and the effects on the liquid funds. By providing an overall picture of the changes in a company’s financial position of the company’s affairs.
However, funds are important to an organization such that no organization can exist and continue to remain in business without adequate funds to meet its short term and long-term liabilities as well as meet their day transactions considering the peculiar nature of the industry the following constitute the insurance funds;
Premium income from clients; investment income such as interests, dividends and rents; other incomes such as annuities receivable.
The research work intends identifying the problems, but also to offer solutions to the problems encountered by the insurance Industry in Nigeria.
It is expected that this should embrace all the changes in Insurance Markets Financial position over the years, the funds statement of standard Accounting practice. Again, the statement of changes in financial position should be presented for each period for which income statement is presented. It goes further to determine the major sources of funds in the insurance industry, as well as pry into other areas of utilization or application of funds. While doing this, it provides answers to questions such as, how does industry companies make their money; how they are funded through premium income from clients or policy holders who would equally want to understand; analyze and interpret the direction of their investment.
(Interestingly these questions raised will be answered in this same project at the long run)
Again, readers would be delighted to know the poor image of the insurance industry in the area of claim settlement, impact of inflation on the insurance business will be highlighted. It also emphasizes on the role and position of the insurance industry in the Nigeria Economy; aiming at the importance of insurance in commerce and industry.
This study is not expected to be very voluminous for interested readers rather, it tries to limit the chapters/ pages between 100 pages so that every aspect of the funds and fund related matters should be contained in the write-up.
1.1 Introduction 1
1.2 Statement of Problems 4
1.3 Purpose / Objective of the Study 4
1.4 Significance of the Study 5
1.5 Scope and Limitations of Study 6
1.6 Research Hypothesis 7
1.7 Historical Development of Modern
Insurance in Nigeria 8
1.8 Definitions of Terms 12
2.0 Review of Related Literature 15
2.1 Meaning of Insurance 20
2.2 Characteristics of Insurance 24
2.3 Funds Flow in the Endurance Industry 29
2.4 An Over View Of the Nigerian Insurance
Market 38
2.5 Nature of the Nigerian Insurance Market,
Insurance and Insurance Related Federal
Government Establishment 39
2.6 The Future of the Insurance Industry
In The Nigeria 45
2.7 Position and Premium Income Growth Of
The Nigeria Insurance Market in The Past
Two Decades 47
2.8 Structure and Composition Of The
Insurance Market in Nigeria 51
Chapter Three
3.0 Research Design and Methodology 54
3.1 Source of Data Collection 55
3.2 Methods of Data Collection 55
3.3 Sample Size 58
3.4 Nature of Data Analysis 60
4.0 Data Presentation and Interpretation
Introduction 61
4.1 Gross Premium Income Analysis And
Explanation of Data &nbs
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