THE IMPORTANCE OF INSURANCE COMPANY TOWARDS RISK MANAGEMENT IN BUSINESS ORGANIZATION (A STUDY OF ANCHOR INSURANCE COMPANY, UYO)
1.1 BACKGROUND OF THE STUDY
Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for pay. It is a form of risk management primarily used to hedge against the risk of a contingent uncertain loss.
An insurer, or insurance carrier, is a company selling the insurance, the insured or policy holder, is the person or entity buying the insurance policy. The amount of money to be charged for a certain amount of insurance coverage is called premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice (Brown, 1993).
The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurers promise to compensate (indemnify) the insured in the case of a financial (personal) loss. The insured receives a contract called the insurance policy, which details the conditions and circumstances under which the insured will financially compensated.
According to Gollier (2003), insurance involves pooling funds from many insured entities (known as exposures) to pay for the losses that may incur. The insured entities are therefore protected from risk for a fee, with the fee being dependent upon the frequency and soverity of the event occurring. In order to be insurable risk, the risk insured against must meet certain characteristics. Insurance as a financial intermediary is a commercial enterprise and a major part of financial services industry, but individual entities can also self-insured through saving money for possible future losses (Dembe and Boden, 2000).
1.2 HISTORICAL BACKGROUND OF ANCHOR INSURANCE COMPANY LIMITED, UYO
Anchor Insurance Company Limited was licensed in October 1989 as a General Business (Non-life) Insurance outfit and started operations in November of the same year. It had its Head Office at 7/13 Aka Road, Uyo, Akwa Ibom State.
In January 1992, the Company added Life/Pension class of Insurance to its business portfolio thereby attaining the status of a Composite Insurance Company.
In 1998, Anchor Insurance Company Limited was re-registered by National Insurance Commission (NAICOM) in the status of a composite insurance company under Registration Number RIC-072.
In 2003, new investors, headed by Dr. Michael Ntuk acquired substantial part of the Company’s equity as part of the privatization programme of the former owner-state government.
As a result of the regulatory induced recapitalization and consolidation the shareholders fund of the company was raised to over N3 billion which placed the company amongst the recapitalized insurance institutions under the General Insurance & Special Risk business.
In 2008 a new Management was introduced, headed, by Mr. Ademayowa Adeduro as MD/CEO a seasoned insurance and accounting expert, to pilot and reposition the Company as a 21st century service delivery brand.
The new Anchor Insurance Company Limited sees her customers and clients as reason they are in business which makes customer satisfaction a priority in the company. The Anchor Insurance Company’s promise is “All stakeholders will surely enjoy a pleasant experience”.
To be the most innovative and preferred General Business Insurance Provider in Nigeria.
To institutionalize the ANCHOR Brand as a world class Security, providing efficient and dynamic insurance services anchored on Good Corporate Governance to meet the expectations of our stakeholders.
The Core Values
• Good Corporate Governance
• Board of Directors
• Management Teams