Table of Contents
Abstract. 2
CHAPTER ONE.. 5
INTRODUCTION.. 5
1.1 Background to the Study.. 5
1.2 Statement of the Problem... 6
1.3 Objectives of the Study.. 7
1.4 Research Questions. 8
1.5 Research Hypothesis. 8
1.6 Significance of the Study.. 8
1.7 Scope of the Study.. 9
1.8 Limitations of the Study.. 9
1.9 Organization of the Study.. 10
CHAPTER TWO.. 12
REVIEW OF RELATED LITERATURE.. 12
2.1 Introduction.. 12
2.2 Theoretical Review.. 12
2.2.1 Risk Mitigation Theory. 12
2.2.2 Asset Protection Theory. 13
2.2.3 Access to Credit Theory. 13
2.2.4 Health and Well-being Theory. 13
2.3 Conceptual Review.. 14
2.4 Empirical Review.. 17
2.5 Summary of Literature Review.. 19
Chapter Three. 20
Research Methodology.. 20
3.1 Introduction.. 20
3.2 Research Design.. 20
3.3 Population and Sampling Techniques. 20
3.4 Data Collection Methods. 21
3.5 Instrumentation.. 21
3.6 Data Analysis Procedures. 22
3.7 Ethical Considerations. 22
3.8 Limitations of the Study.. 22
Conclusion.. 23
CHAPTER FOUR.. 24
DATA ANALYSIS AND INTERPRETATION.. 24
4.1 Preamble. 24
4.2 Socio-Demographic Characteristics of Respondents. 24
TABLES BASED ON RESEARCH QUESTIONS.. 29
4.3 Analysis of the Respondents’ Views on Research Question one: 29
4.4 Testing Hypothesis. 41
Discussion of Findings. 42
CHAPTER FIVE.. 45
SUMMARY CONCLUSION AND RECOMMENDATIONS.. 45
5.1 Introduction.. 45
5.2 Summary of Key Findings. 45
5.3 Discussion of Findings. 46
5.3.1 Accessibility of Insurance Products. 46
5.3.2 Financial Protection and Risk Mitigation.. 47
5.3.3 Economic Stability and Growth.. 47
5.3.4 Education and Awareness. 47
5.3.5 Claims Processing and Customer Satisfaction.. 48
5.4 Conclusion.. 48
5.5 Recommendations. 48
5.6 Future Research.. 49
5.7 Limitations of the Study.. 50
5.8 Final Thoughts. 50
REFERENCES. 50
Research Questionnaire. 54
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Insurance has long been recognized as a critical tool in mitigating risks and providing financial security to individuals and businesses worldwide. In the context of Nigeria, where poverty remains a pressing issue, the role of insurance in poverty reduction is gaining increasing attention. This introductory discourse aims to delve into the multifaceted impact of insurance on poverty reduction in Nigeria, examining its mechanisms, challenges, and potential for transformative change.
The relationship between insurance and poverty reduction in Nigeria is complex and dynamic. While insurance offers a safety net against unexpected events such as illness, natural disasters, and crop failures, its accessibility and affordability remain significant barriers for many Nigerians, particularly those in low-income brackets (Owolabi et al., 2020). Moreover, cultural factors, lack of awareness, and trust issues contribute to the underutilization of insurance services among the impoverished populace (Oladele et al., 2018). Thus, understanding the nuanced interplay between insurance and poverty is essential for devising effective strategies to harness its full potential for socioeconomic development.
Research indicates that insurance can play a pivotal role in breaking the cycle of poverty by promoting resilience and facilitating asset accumulation among vulnerable populations (Oyelami & Olayemi, 2019). By providing financial protection against unforeseen risks, insurance products such as microinsurance hold promise in empowering low-income individuals and fostering inclusive growth (Adegbite et al., 2021). However, achieving widespread adoption of insurance requires addressing systemic challenges such as regulatory barriers, infrastructure deficits, and the need for tailored products that cater to the specific needs of the poor (Ajayi & Odufowokan, 2017). Therefore, policymakers, insurers, and other stakeholders must collaborate to design holistic approaches that enhance the accessibility, affordability, and relevance of insurance for poverty alleviation in Nigeria.
1.2 Statement of the Problem
The impact of insurance on poverty reduction in Nigeria remains a pressing issue, necessitating comprehensive investigation and analysis. Despite the potential of insurance schemes to mitigate the financial vulnerabilities associated with unexpected events, such as illness, accidents, or natural disasters, their efficacy in alleviating poverty in Nigeria has not been thoroughly examined. This knowledge gap is significant given Nigeria's high poverty rate, where a large segment of the population lacks adequate financial protection against risks. By understanding how insurance mechanisms function within the Nigerian socio-economic context, policymakers and stakeholders can devise targeted interventions to enhance the role of insurance in poverty reduction strategies. As of June 2024, the available literature lacks a cohesive understanding of the specific pathways through which insurance influences poverty dynamics in Nigeria.
Recent studies have highlighted the complexities surrounding insurance uptake and utilization among Nigerian households, pointing to various barriers that impede its potential to alleviate poverty. Factors such as low awareness, mistrust in insurance providers, and affordability constraints often deter individuals, particularly those in low-income brackets, from accessing insurance services (Owolabi & Aigbiremolen, 2021). Moreover, the limited availability of insurance products tailored to the needs of vulnerable populations, such as smallholder farmers and informal sector workers, exacerbates the persistence of poverty in Nigeria (Ezeh, 2023). Addressing these barriers requires a multifaceted approach that considers regulatory reforms, financial literacy programs, and innovative product design to enhance the inclusivity and effectiveness of insurance in poverty reduction efforts.
1.3 Objectives of the Study
The main objective of the study is to examine the impact of insurance on poverty reduction in Nigeria. Specific objectives of the study are:
- To assess the impact of micro-insurance schemes on the financial vulnerability of low-income households in Nigeria
- To analyze the barriers to insurance penetration among low-income populations in Nigeria
- To evaluate the effectiveness of government initiatives in promoting insurance access for poverty reduction in Nigeria
1.4 Research Questions
To guide the study and achieve the objectives of the study, the following research questions were formulated:
- To what extent do micro-insurance schemes reduce out-of-pocket expenses for low-income households facing unexpected events in Nigeria?
- What are the primary reasons why low-income Nigerians are not participating in formal insurance programs?
- What are the existing government programs or policies aimed at increasing insurance access for low-income Nigerians?
1.5 Research Hypothesis
The following research hypothesis was developed and tested for the study:
Ho: There is no significant impact of insurance on poverty reduction in Nigeria.
1.6 Significance of the Study
The study is important for many reasons. The following are the major stakeholders this paper through its practical and theoretical implications and findings will be of great significance:
Firstly, the paper will benefit major stakeholders and policy makers in the Insurance sector. The various analysis, findings and discussions outlined in this paper will serve as a guide in enabling major positive changes in the industry and sub-sectors.
Secondly, the paper is also beneficial to the organizations used for the research. Since first hand data was gotten and analysed from the organization, they stand a chance to benefit directly from the findings of the study in respect to their various organizations. These findings will fast track growth and enable productivity in the organisations used as a case study.
Finally, the paper will serve as a guide to other researchers willing to research further into the subject matter. Through the conclusions, limitations and gaps identified in the subject matter, other student and independent researchers can have a well laid foundation to conduct further studies.
1.7 Scope of the Study
The study is delimited to Axa Mansard Insurance. Findings and recommendations from the study reflects the views and opinions of respondents sampled in the area. It may not reflect the entire picture in the population.
1.8 Limitations of the Study
The major limitations of the research study are time, financial constraints and delays from respondents. The researcher had difficulties combining lectures with field work. Financial constraints in form of getting adequate funds and sponsors to print questionnaires, hold Focus group discussions and logistics was recorded. Finally, respondents were a bit reluctant in filling questionnaires and submitting them on time. This delayed the project work a bit.
1.9 Organization of the Study
The study is made up of five (5) Chapters. Chapter one of the study gives a general introduction to the subject matter, background to the problem as well as a detailed problem statement of the research. This chapter also sets the objectives of the paper in motion detailing out the significance and scope of the paper.
Chapter Two of the paper entails the review of related literature with regards to corporate governance and integrated reporting. This chapter outlines the conceptual reviews, theoretical reviews and empirical reviews of the study.
Chapter Three centers on the methodologies applied in the study. A more detailed explanation of the research design, population of the study, sample size and technique, data collection method and analysis is discussed in this chapter.
Chapter Four highlights data analysis and interpretation giving the readers a thorough room for the discussion of the practical and theoretical implications of data analyzed in the study.
Chapter Five outlines the findings, conclusions and recommendations of the study. Based on objectives set out, the researcher concludes the paper by answering all research questions set out in the study.
