Impact of Claims Settlement on the Development of Nigerian Insurance Industry (2007 – 2017)

Claims settlement is a critical part of insurance contract, because it is vital to both the policyholder and the insurance company. This paper examines the Impact of Claims Settlement on the Development of Nigerian Insurance Industry (2007Industry ( -2017)). The objectives of the study include: to estimate the impact of total claims settlement on Insurance penetration in Nigerian, and to estimate the impact of total claims settlement on insurance density in Nigerian. The research design used was Ex-post facto research design. While Ordinary Least Square (OLS) regression method was utilized for data analysis. It was discovered that: total insurance claims had positively but insignificantly impacted on insurance penetration in Nigerian with p-value of [0.606]. While, total insurance claims had positively and significantly impacted on Insurance density in Nigerian with p-value of [0.007]. From the result of model one, the (AR 2 ) was -.097; this implies that only -9.7% of the total changes or variations in insurance penetration in Nigeria could be explained by total insurance claims settlement in Nigeria. While from the result of model two the (AR 2 ) was 0.619; this implies that 61.9% of the total changes or variations in insurance density in Nigeria could be explained by total insurance claims settlement in Nigeria. Based on these results the study concludes that claims settlement had impacted positively on the development of Nigerian Insurance Industry. Thus, it was recommended that: Insurance companies should have effective and efficient claims department equipped with modern technology and qualified claims manager(s) to oversee the management and settlement of valid claims of their policyholders in order to increase insurance penetration in Nigeria; Nigerian Insurance Industry regulators should enhance its supervisory frameworks to ensure that genuine claims are promptly settled by insurance companies and defaulter adequately punished. This will have positive impact on insurance density because more Nigerians will be encouraged to buy insurance policies. In line with the theoretical framework adopted for this study, and in addition to settlement of valid claims, insurance companies should periodically carry out marketing research to discover the insurance needs of their customers as well as prospective customers through product revitalization and new product development to increase customers" expected utility for buying insurance. This will encourage Nigerians to purchase more insurance, and in turn enhance the development of Nigerian Insurance industry.