Analytical Study of the structure of Internal Fund of Insurance Organisation in Nigeria

Abstract

The effective application of internal funds of insurance organization plays a major role in the management of these organizations. Internal funds are usually employed to secure eventual obligation of an insurance company (organization) towards its policyholders and, at the same time, contribute to the economic development of any nation. Since insurance business plays an important role in the growth and development of both private and public enterprises in both developed and developing economies, this creates the need for this research work. This work is aimed at critically analyzing the structure of internal funds of insurance organizations in Nigeria. The study would identify what makes up the internal funds of insurance organizations as well as how they are determined, how they are invested, legal provision among others. The objectives of the study is to ascertain the components of these internal funds with the aim of knowing if it is in accordance with the legal requirements and if the structures are viable for growth of the industry. Sources of data for this study were journals, previous works, materials from some insurance companies, questionnaires and experts were consulted. The information collected were assembled and analyzed after which it was observed that the internal funds structure of insurance organizations in Nigeria were not appropriately determined in accordance with provisions

(Insurance Decree/Act). It was also identified that these internal funds were prone to extinction for many reasons, which were given. Finally, recommendations were made which aims at suggesting measures to take in investing these funds which will result in improving the position and making the insurance sector more viable and vibrant, in order to be able to face the changing economy and needs of the organizations and individuals in Nigeria.