Eco. 324—18-5-2021 (Online Discussion Quiz 5 — Legal Principles of Insurance and the Business Model)

ENEH KENECHUKWU
2017/249496
ECONOMICS
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The Legal principles of insurance are very fundamental for the smooth operations of insurance business. Cleary discuss and analyse the seven principles of insurance and the insurance business model using relevant examples
1. Nature of contract:Nature of contract is a fundamental principle of insurance contract. An insurance contract comes into existence when one party makes an offer or proposal of a contract and the other party accepts the proposal.

A contract should be simple to be a valid contract. The person entering into a contract should enter with his free consent.

2. Principal of utmost good faith:
Under this insurance contract both the parties should have faith over each other. As a client it is the duty of the insured to disclose all the facts to the insurance company. Any fraud or misrepresentation of facts can result into cancellation of the contract.

3. Principle of Insurable interest: Under this principle of insurance, the insured must have interest in the subject matter of the insurance. Absence of insurance makes the contract null and void. If there is no insurable interest, an insurance company will not issue a policy.

An insurable interest must exist at the time of the purchase of the insurance. For example, a creditor has an insurable interest in the life of a debtor, A person is considered to have an unlimited interest in the life of their spouse etc.

4. Principle of indemnity:
Indemnity means security or compensation against loss or damage. The principle of indemnity is such principle of insurance stating that an insured may not be compensated by the insurance company in an amount exceeding the insured’s economic loss.

In type of insurance the insured would be compensation with the amount equivalent to the actual loss and not the amount exceeding the loss.
This is a regulatory principal. This principle is observed more strictly in property insurance than in life insurance.

The purpose of this principle is to set back the insured to the same financial position that existed before the loss or damage occurred.

5. Principal of subrogation:
The principle of subrogation enables the insured to claim the amount from the third party responsible for the loss. It allows the insurer to pursue legal methods to recover the amount of loss, For example, if you get injured in a road accident, due to reckless driving of a third party, the insurance company will compensate your loss and will also sue the third party to recover the money paid as claim.

6. Double insurance:
Double insurance denotes insurance of same subject matter with two different companies or with the same company under two different policies. Insurance is possible in case of indemnity contract like fire, marine and property insurance.
Double insurance policy is adopted where the financial position of the insurer is doubtful. The insured cannot recover more than the actual loss and cannot claim the whole amount from both the insurers.

7. Principle of proximate cause:
Proximate cause literally means the ‘nearest cause’ or ‘direct cause’. This principle is applicable when the loss is the result of two or more causes. The proximate cause means; the most dominant and most effective cause of loss is considered. This principle is applicable when there are series of causes of damage or loss.

In an environment where there is so much antagonism towards insurance business, what would be your advice to an employee who works in an insurance company, and has been given a specific period of time to get a group of clients who will insure their assets/properties or even buy life assurance policies? How can such a staff meet the target?

Well using nigeria as a case study its obvious people buying insurace premium are realtively lower compared to the developed nations as people even struggle to live above a dollar, the best markteing strategy is targetted ads towars the rich class, make them undersatsn the impotance of having insurance and its long term benefit.
the ads could be radio programmes Tv shows etc

Given the scenario above, assuming you are the owner of the insurance firm, what will you do to increase the patronage of clients towards your insurance business?
i wold inlove more on targetted ads as well as enlightening people on what insurace means the advantages,risk invloved in living withpout insurance and how to go about it, most people are void of knowledge educating them would also act as a stimulating towrds getting insured.

Name:Eze Udoka Chidiebube
Reg no:2017/242428
Dept:Economics
1. Nature of contract:
Nature of contract is a fundamental principle of insurance contract. An insurance contract comes into existence when one party makes an offer or proposal of a contract and the other party accepts the proposal.A contract should be simple to be a valid contract. The person entering into a contract should enter with his free consent.
2. Principal of utmost good faith:Under this insurance contract both the parties should have faith over each other. As a client it is the duty of the insured to disclose all the facts to the insurance company. Any fraud or misrepresentation of facts can result into cancellation of the contract.
3. Principle of Insurable interest:Under this principle of insurance, the insured must have interest in the subject matter of the insurance. Absence of insurance makes the contract null and void. If there is no insurable interest, an insurance company will not issue a policy.An insurable interest must exist at the time of the purchase of the insurance. For example, a creditor has an insurable interest in the life of a debtor, A person is considered to have an unlimited interest in the life of their spouse etc.
4. Principle of indemnity:Indemnity means security or compensation against loss or damage. The principle of indemnity is such principle of insurance stating that an insured may not be compensated by the insurance company in an amount exceeding the insured’s economic loss.In type of insurance the insured would be compensation with the amount equivalent to the actual loss and not the amount exceeding the loss.This is a regulatory principal. This principle is observed more strictly in property insurance than in life insurance.The purpose of this principle is to set back the insured to the same financial position that existed before the loss or damage occurred.
5. Principal of subrogation:The principle of subrogation enables the insured to claim the amount from the third party responsible for the loss. It allows the insurer to pursue legal methods to recover the amount of loss, For example, if you get injured in a road accident, due to reckless driving of a third party, the insurance company will compensate your loss and will also sue the third party to recover the money paid as claim.
6. Double insurance:
Double insurance denotes insurance of same subject matter with two different companies or with the same company under two different policies. Insurance is possible in case of indemnity contract like fire, marine and property insurance.
Double insurance policy is adopted where the financial position of the insurer is doubtful. The insured cannot recover more than the actual loss and cannot claim the whole amount from both the insurers.
7. Principle of proximate cause:
Proximate cause literally means the ‘nearest cause’ or ‘direct cause’. This principle is applicable when the loss is the result of two or more causes. The proximate cause means; the most dominant and most effective cause of loss is considered.
B.How can an insurance worker meet up with the target?
1) Be a Connector
I’m sure you’ve heard this one before, but there’s more to helping people connect with each other than you may have considered.
2) Show Up to Events Early
I understand the temptation to show up fashionably late – it’s a lot easier to blend into a full room of people and its more likely you’ll see someone you already know.
3) Find More Networking Events.There are a lot more opportunities than just the local chamber of commerce.Think outside the box, ask around, and check out this list to get you thinking:
Chambers of Commerce
Business Networking Groups
Mastermind Groups7) Set Networking Goals
Like anything in business, proper goals will improve your results.
4)Make a measurable goal for networking like adding new LinkedIn Connections, giving away a certain number of business cards, or sending a certain number of follow-up emails to your contacts.
As an insurance owner,what wil you do to increase the patronage of clients towards insurance business?
1. Offer a free newsletter
Free is something that everyone can afford, from small businesses to global corporations. When you offer a free newsletter, you are informing your potential customers that you are willing to provide free information from the start.
2. Increase your customer base by asking for opinions
Before a web visitor leaves your website, request that they complete a short survey related to your business. People are happy to express themselves and often enjoy telling you about their online and offline experiences.
3. Keep up and maintain excellent customer support and service
A customer who contacts customer support about their first order is just as important as a customer who contacts customer service about their tenth order. Treat each customer with respect and take appropriate action.
4. Keep your website content fresh
Fresh and informative content is one of the main elements that pull in new visitors and potential customer.
5. Promote your business on social media networks
Facebook users have an average of 229 friends. When you create new content, launch a new product or run a new campaign, be sure you share this across the social media channels you are active in.

Name: Anayo Bright Udochukwu
Reg Number: 2017/249482
Department: Economics

1. Foremost, when a company insures an individual entity there are basic legal requirement from both the insurer and insured. Thus, the legal principles of insurance are very fundamental for the smooth operations of insurance business and they clearly explain below
Indemnity: What is word stands in insurance coperative entity is the the insurance compensates the their customer i.e. the insured, of any damage of asset(s). A probability occurence that Mr Amadi insured his new sport utility vechicle of two months with a stipulate premium and after six the vehicle got stolen, hence, it is the duty of the insurance company to indemnify Mr Amadi on his lost vehicle. In other words replace Mr Amadi’s vehicle the way it is at the time of lost.
Insurable Interest: This legal principles explains that the insurer must have suffer from loss via the reason to get his asset(s) to be insured.

Utmost Good Faith: The insured must be able to explain to the insurer (insurance company) about asset to be insured and if any accidence occur, that the insured must be able to clearly state how it occured.

Contribution: There are certain situation where when the insure and insurer have to contribute in indemnify. A scenario where a vehicle was insured at the damage it may occur. Example dangote trucks.

Subrogation: This means that the insurance companies also work with para-millitary, military and other agencies in other to carry out their work effective. Example: In recovery of insured assets that was stolen like cars.

2. In an environment where there is so much antagonism towards insurance business, what my advice will be to an employee who works in an insurance company, and has been given a specific period of time to get a group of clients who will insure their assets/properties or even buy life assurance policies is that he/she should implore a convincing skill, say; giving insurance another name. An agent may come with a good statement to individuals who may not heard insurance before or other way, that he/she is an agent of a company that want to take away the lost occuring in your business for you thereby the person should be paying a little stipend monthly or annually.

3. Given the scenario above, assuming am the owner of the insurance firm. In other to get clients, i will rebrand the name of my insurance company. Train agents on marketing skills etc.

7 principles of insurance
1. principle of indemnity: the principle of indemnity asserts that on the happening of a loss the insured shall be put back into the same financial position as he used to occupy immediately before the loss. In other words, the insured shall get neither more nor less than the actual amount of loss sustained.
2. principle of insurable interest: this concept requires that the insured have a stake in the loss or damage to the life or property insured
3. principle of utmost good faith: Here, the insurer and insured are bond by honesty and fairness
4. principle of contributions: insurers which have similar obligations to the insured contributes to the indemnification according to the same method
5. principle of subrogation: the insurance company acquires legal right to pursue recoveries on behalf of the insured
6. principle of cause proxima: here, the cause of loss must be covered under the insuring agreements
7. principle of mitigation: in case of any loss or damage, the assets owner must attempts to keep loss to minimum as though the item was not issured.

NO2
Employees who work in an insurance company and is seeking partnership, should firstly try to put on a friendly attitude and have a welcoming approach, secondly should enlighten people on the essence, advantage and usefulness of insurance in general. He or she can give incentives or discounts to attracts more people tpo the company.

NO3
As the manager to achieve 2 above, i will

1. be sincere from the start
2. discounts for new memberships
3. build a good customer relationship with my clients
4. more awareness

NAME: MGBADA OGOCHUKWU EMELDA
REG NO:2017/245040
DEPARTMENT: ECONOMICS

Due to the high level of illiteracy in the Nigerian society, many people are unaware of insurance policies. However, with the enactment of Insurance Decree[1], the awareness of insurance policies was enhanced. Thus, more people took steps to insure their properties or lives. Unfortunately, however, much as the high percentage of them normally end up unable to have their claims indemnified, either as a result of a breach of one insurance principle or another. These principles are numerous and they are the basis upon which insurance contracts are based. Failure to adhere to any of the principles may render an insurance contract void. The need to understand as well as having a second knowledge of the basic principles of insurance cannot be over emphasized. In the insurance world there are six basic principles that must be met, ie insurable interest, Utmost good faith, proximate cause, indemnity, subrogation and contribution. The right to insure arising out of a financial relationship, between the insured to the insured and legally recognized.
1. Utmost Good Faith
2. Insurable Interest
3. Proximate Cause
4. Indemnity
5. Subrogation
6. Contribution
7. Loss Minimization
Below we explain each item briefly, including how each may relate to a potential injury lawsuit. These principles are open to interpretation. If you think one of these principles has been breached, or your insurance claim has wrongfully been denied, we recommend using our free case evaluation to help decide whether hiring a lawyer makes sense for you.
The Principle of Utmost Good Faith
• Both parties involved in an insurance contract—the insured (policy holder) and the insurer (the company)—should act in good faith towards each other.
• The insurer and the insured must provide clear and concise information regarding the terms and conditions of the contract
This is a very basic and primary principle of insurance contracts because the nature of the service is for the insurance company to provide a certain level of security and solidarity to the insured person’s life. However, the insurance company must also watch out for anyone looking for a way to scam them into free money. So each party is expected to act in good faith towards each other.
If the insurance company provides you with falsified or misrepresented information, then they are liable in situations where this misrepresentation or falsification has caused you loss. If you have misrepresented information regarding subject matter or your own personal history, then the insurance company’s liability becomes void (revoked).
See how a social media post could ruin a personal injury case.
The Principle of Insurable Interest
Insurable interest just means that the subject matter of the contract must provide some financial gain by existing for the insured (or policyholder) and would lead to a financial loss if damaged, destroyed, stolen, or lost.
• The insured must have an insurable interest in the subject matter of the insurance contract.
• The owner of the subject is said to have an insurable interest until s/he is no longer the owner.
In auto insurance, this will most times be a no brainer, but it does lead to issues when the person driving a vehicle doesn’t own it. For instance, if you are hit by a person who isn’t on the insurance policy of the vehicle, do you file a claim with the owner’s insurance company or the driver’s insurance company? This is a simple but crucial element for an insurance contract to exist.
The Principle of Indemnity
• Indemnity is a guarantee to restore the insured to the position he or she was in before the uncertain incident that caused a loss for the insured. The insurer (provider) compensates the insured (policyholder).
• The insurance company promises to compensate the policyholder for the amount of the loss up to the amount agreed upon in the contract.
Essentially, this is the part of the contract that matters the most for the insurance policyholder because this is the part of the contract that says she or he has the right to be compensated or, in other words, indemnified for his or her loss.
The amount of compensation is in direct proportion with the incurred loss. The insurance company will pay up to the amount of the incurred loss or the insured amount agreed on in the contract, whichever is less. For instance, if your car is inured for $10,000 but damages are only $3,000. You get $3,000 not the full amount.
Compensation is not paid when the incident that caused the loss doesn’t happen during the time allotted in the contract or from the specific agreed upon causes of loss (as you will see in The Principle of Proximate Cause). Insurance contracts are created solely as a means to provide protection from unexpected events, not as a means to make a profit from a loss. Therefore, the insured is protected from losses by the principle of indemnity, but through stipulations that keep him or her from being able to scam and make a profit.
The Principle of Contribution
• Contribution establishes a corollary among all the insurance contracts involved in an incident or with the same subject.
• Contribution allows for the insured to claim indemnity to the extent of actual loss from all the insurance contracts involved in his or her claim.
For instance, imagine that you have taken out two insurance contracts on your used Lamborghini so that you are covered fully in any situation. Let’s say you have a policy with Allstate that covers $30,000 in property damage and a policy with State Farm that cover $50,000 in property damage. If you end up in a wreck that causes $50,000 worth of damage to your vehicle. Then about $19,000 will be covered by Allstate and $31,000 by State Farm.
This is the principle of contribution. Each policy you have on the same subject matter pays their proportion of the loss incurred by the policyholder. It’s an extension of the principle of indemnity that allows proportional responsibility for all insurance coverage on the same subject matter.
The Principle of Subrogation
This principle can be a little confusing, but the example should help make it clear. Subrogation is substituting one creditor (the insurance company) for another (another insurance company representing the person responsible for the loss).
• After the insured (policyholder) has been compensated for the incurred loss on a piece of property that was insured, the rights of ownership of this property go to the insurer.
So lets say you are in a car wreck caused by a third party and your file a claim with your insurance company to pay for the damages on your car and your medical expenses. Your insurance company will assume ownership of your car and medical expenses in order to step in and file a claim or lawsuit with the person who is actually responsible for the accident (i.e. the person who should have paid for your losses).
The insurance company can only benefit from subrogation by winning back the money it paid to its policyholder and the costs of acquiring this money. Anything paid extra from the third party, is given to the policyholder. So lets say your insurance company filed a lawsuit with the negligent third party after the insurance company had already compensated you for the full amount of your damages. If their lawsuit ends up winning more money from the negligent third party than they paid you, they’ll use that to cover court costs and the remaining balance will go to you.
The Principle of Proximate Cause
• The loss of insured property can be caused by more than one incident even in succession to each other.
• Property may be insured against some but not all causes of loss.
• When a property is not insured against all causes, the nearest cause is to be found out.
• If the proximate cause is one in which the property is insured against, then the insurer must pay compensation. If it is not a cause the property is insured against, then the insurer doesn’t have to pay.
When buying your insurance policies, you will most likely go through a process where you select which instances you and your property will be covered for and which ones they will not. This is where you are selecting which proximate causes are covered. If you end up in an incident, then the proximate cause will have to be investigated so that the insurance company validates that you are covered for the incident.
This can lead to disputes when you have suffered an incident you thought was covered but your insurance provider says it’s not. Insurance companies want to make sure they are protecting themselves but sometimes they can use this to get out of being liable for a situation. This might be a dispute where you’ll need a lawyer to help argue for you.
The Principle of Loss Minimization
This is our final principle that creates an insurance contract and the most simple one probably.
• In an uncertain event, it is the insured’s responsibility to take all precautions to minimize the loss on the insured property.
Insurance contracts shouldn’t be about getting free stuff every time something bad happens. Therefore, a little responsibility is bestowed upon the insured to take all measures possible to minimize the loss on the property. This principle can be debatable, so call a lawyer if you think you are being unfairly judged under this principle.

HOW CAN A STAFF MEET THE TARGET
The main concept of insurance is that of spreading risks. Insurance facilitates investment by reducing the amount of capital that businesses and individuals need to keep at hand to protect themselves from uncertain events. According to some scholars, insurance is a barometer of economic activity in a country and thus, protects the success of emerging economies.
Insurance in Nigeria can be traced back to the 20th century when Nigeria’s economy was solely dependent on agriculture. There was a need for merchants to transport their cash crops to Europe and also reducing the risk of such transportation. This majorly contributed to the dominance of marine insurance in Nigeria at that time.
Despite its importance for economic development, the gross premium collected by insurance companies in Nigeria is about 1.9 Billion United States Dollars compared to the 3.8 Billion United States Dollars collected in South Africa.
In the United Kingdom, the insurance industry contributes about 20% of the total GDP of the country. In South Africa, the insurance industry contributes 17% of the total GDP and in Kenya, the insurance industry contributes 3.4% of its nation’s GDP. However, in spite the astronomical growth of the Insurance companies from just one agency in 1918 – Royal Exchange Assurance Agency to the present number of 56 Insurance companies as stated on National Insurance Commission (“NAICOM’s”) website, the Nigerian Insurance industry contributes a meagre 0.7% of the total GDP of Nigeria. It will be right to say that the performance of Nigerian insurance industry is sub-optimal.
In defiance of National Insurance Commission’s constant effort to cure and mitigate the challenges causing the sub-optimal performance of the insurance industry, there are still a couple of challenges militating against the growth of the insurance industry.
Antagonistic and hostile economy
A stable economy promotes the savings necessary to finance investments which is a prerequisite for achieving a viable insurance industry which can help sustain economic growth. Insurance companies are sensitive to economic fundamentals and sometimes have to factor a lot of economic variables so as to make the right investment decisions.
These variables include foreign exchange reserves, government debt, government deficits, inflation, interest rates and exchange rates which have all suffered in recent years as a result of Nigeria’s financial indiscipline and misappropriation.
What this means is that for the insurance industry to thrive and attain its potentials, the government must be sincere in promoting a favourable environment that will allow the financial service industries thrive. This will help increase the operational efficiency of the insurance industry.
Presently, insurance companies are unwilling to invest the premiums in long-term instruments because of the fear of inflation built up over several years due to fiscal indiscipline and high inflation. It is a very simple principle of economics and investment that short-term investment will yield lower returns. If these trend continues to occur, insurance companies will not be able to solve their liquidity problems which might deter insurers to pay claims.
The Nigerian market is doubtful of Insurance Companies
Anybody who has spoken to the average Nigerian about insurance can give a firsthand experience of how Nigerians generally have a negative attitude toward insurance. This accounts for the low patronage of insurance companies in Nigeria.
The negative attitude of Nigerians might not be unconnected to the poor attitude of the insurers as regards non-payment of claims. Some insurance companies are very notorious of defaulting in payment of claims which has adversely affected the publicity for the industry and consequently the confidence in the industry buy the prospective assured.
Also, there are clauses in policy documents which escalates the distrust in Nigerians.

Inadequate access to information Technology
Despite being in a world where information technology seems to be ruling everything, many companies in the insurance industry still do not have a fully automated and/or integrated computer software system. The challenge here is that document management system is relatively poor compared to other sectors in the economy.
It is an unfortunate truth that manual services are still prevalent in the industry which leads to delay in settlement of claims, fraudulent practices, mistakes and errors in the entire business operations.
There is also no regulatory guideline on best IT infrastructure for insurers and re-insurers to adopt for both operational and reporting purposes.
Weak Regulatory Framework
The regulatory framework for insurance is very weak. National Insurance Commission is empowered to ensure the effective administration, supervision, regulation and control of insurance business in Nigeria.
Historically in Nigeria, government policies and legislations were made concerning insurance industry simply to whittle down foreign dominance in the industry. There is an urgent need to review the laws regulating the Insurance industry. The Marine Insurance Act, 1961 is clearly outdated as it was a verbatim reproduction of the Marine Insurance Act 1906 of the United Kingdom which has been reviewed in the UK.
There is also a need for policies making some insurance products compulsory and mechanism to ensure full implementation of such policies. More stringent policies in relation to retaining more local content in some special risk such as aviation and oil& gas must be made by the legislators and National Insurance Commission.
Another major problem is National Insurance Commission inability to ensure that there are standard premium rates on certain insurance products. Insurance companies must adhere to the policy such that there is a benchmark for rates when negotiating premiums.
Lack of skilled personnel
As funny as it may seem, there is a huge shortfall of skilled professionals (underwriters, brokers, actuaries, etc.) in the entire insurance industry. Insurance companies inadequately train their staffs. Majority of the insurance companies attract low-skilled personnel due to inadequate remuneration package thus, there is always the inability to retain competent employees.
Many top executives in the insurance industry are marketers who have rose through the ranks not because of their strong technical background of the industry but because of their distinctive salesmanship and the ability to bring in more clients than the others. The author thinks bringing in client should be a major requirement of promotion, however, the combination of a good technical background and business skills should be the pre- requisite. Many marketers out there would give any rate to the prospective assured, not looking at important factors such as claims history and other major factors.
Poor knowledge of Insurance Services by the prospective assured
The insurance culture in Nigeria is very low. This may not be unconnected to the lack of knowledge about life insurance products. Many educated Nigerians still do not see a reason for insurance. Scholars have stated that there is an urgent need for insurance companies to renew their marketing communication strategy that should be based on creating awareness and informing the consumers of the benefits inherent to insurance.
Nigeria is a nation plagued with a low level of development, vast income inequalities,and cultural diversity in terms of language, religion, ethnicity and resource control crises.
The low standard of living is a major reason for the poor attitude of Nigerians towards insurance services. The per capital income in Nigeria is very low and thus insurance penetration into the economy is bound to be low.
Possible actions to ensure optimal operation of Insurance Industry in Nigeria
The Federal Government must also examine the extant legislations on insurance in Nigeria. Particularly the Insurance Act 2003 and the National Insurance Commission Act 1997. The Insurance Act must also be well implemented by NAICOM or any other government institution saddled with such implementation responsibility. For instance, Section 64 of the Insurance Act makes compulsory insurance of building under construction which is more than two floors. The general implementation of the Insurance Act has left more to be desired. The limitation of liability on third party insurance is too small in line with the present day economy. Several sections of the insurance Act have also been badly implemented. We cannot overemphasize the need for an adequate legislation and policy to create operational environment.
The formulation of economic policies which will give room for investment will also help the insurance industry. As earlier stated, where there are investment friendly policies, insurance companies would also be able to make long term investment for better returns on such investments. Also, it is noteworthy of stating that if the economy is in a better shape, the prospective assure will have the liquidity to procure insurance.
Customer services in the insurance industry is below par. Many of these companies are having problem satisfying their customers in terms of product offerings, quality of services and sophistication of products offered. Customer service is clearly important for winning new customers and retaining existing ones. The first step of changing the face of the industry is ensuring an exceptional customer experience. Insurance companies must find a way to provide customers with a internet based self-service insurance platform where customers can view policy coverage, pay bills, make changes to policies, submit claims and check the status of claim progress. Brokers should be able to obtain online quotes, proposal and plans, design for their customers.
Employing more adequate staff with related professional background is also key. It is also important that the Chartered institute of Insurance must regularly review and expand their curriculum to meet with the present market need and build the capacity of student members. Insurance companies must also allocate a percentage of its budget to Continuous Professional Development to keep staff abreast of professional standards and practices.
Insurance companies must also find ways to sensitise the populace about the use of insurance. The government also has a role to play in this by making relevant laws that will help make certain insurance policies compulsory and harsh sanctions for non-compliance of same.
Generally, around the world, there is a paradigm shift from paper oriented process which is manual to automated process. Insurance companies in Nigeria must follow this growing trend. Insurance companies must employ the expertise of first tier technology firms to develop software to increase operational efficiency.
ways to get more clients for your insurance business
1. Find your niche. Insurance agents often want to be all things to all people, but niche marketing may be the smarter strategy. …
2. Network in your community. You already know that networking is essential for bringing in new clients. …
3. Prospect every day. …
4. Partner with other professionals. …
5. Nurture your leads.

Name: Ijara Peter Elochukwu
Department: ECONOMICS
Reg no: 2017/ 249513
EMAIL: petochris86@yahoo.com
Eco 324.
1.
There are 7 principles guiding the operation of the insurance company. They include.
I. Indemnity: in cases of loss a policy holder is expected to be restored to his or her previous status before the loss. If I lose my insure my car I expect to be restored to my original position before the loss.
II. Insurable interest: it’s imperative to note that one cannot insure something that if a loss happen that certain thing won’t affect them directly.
III. Utmost good faith: at this point both parties are honest with each other and disclosed all information relevant for the policy. If I want a life insurance then I have to reveal information about my health.
IV. Mitigation: in this case policy holders are expected to take care of insured property like it wasn’t insured. If you insured your house doesn’t mean you’ll stop taking measures to prevent fire and other man made disaster .
V. Contribution: insurers who have similar obligation to the insured contribute to indemnify the loss through special methods
VI. Causa proxima: The cause of loss must be covered under the insuring agreement of the policy and the dominant cause must not be excluded.
VII. Subrogation: This principle states that the insurance company has rights to pursue whatever concerns the insured on behalf on the insured.
The insurance business been a profit oriented one has a business model that collects more in premium thanks paid out in losses.
1. Underwriting: The process where the insurers select risk to insure and premium to collect for accepting the risks.
2. Through investing of premiums.

Question 2
I. Ask of the potential clients wellbeing:studies reveed that more clients will buy insurance policies if their wellbeing is considered.
II. Highlighting the advantages of a product or service offered by your company is very important.
III. Act on their emotions.
IV. Make clients feel they are missing out of they don’t purchase insurance policies. It’s called the FOMO effect.
V. Let your customers decide on the next steps: don’t decide for them so they don’t think all you are after is just the sale of your insurance policy.
VI. Use the internet to display times the company indemnify it’s clients in time of loss. This helps to restore loss confidence.

Question 3.
I. Encouraging sales person with bounses for meeting a target
2. Emotional intelligence classes for sales persons.
3. Proof of insurance companies loyalty.

NAME: Emmanuel Treasure Adanne
Department: Economics
Reg No: 2017/242436
Email address: http://www.treasureadaemmanuel@gmail.com
Website: treshvinaemman54.blogspot.com
Answer:
1. Insurance concept was started to distribute risk among group of people. Co-operation is the basic principle behind every insurance contract. The following are principles of insurance with examples:
a) Principal of Utmost Good Faith: This is a situation where both parties, insurer and insured enter into contract in good faith. This means that Insured should provide all the information that impacts the subject matter. Insurer should provide all the details regarding insurance contract.For example John took a health insurance policy. At the time of taking policy, he was a smoker and he didn’t disclose this fact. He got cancer. Insurance company won’t pay anything as John didn’t reveal the important facts.
b) Principle of Insurable Interest: Insured must have the insurable interest on the subject matter. In case of life insurance spouse and dependents have insurable interest in the life of a person. Corporations also have insurable interests in the life of it’s employees. In case of life or marine insurance, insured must be the owner both at the time of entering of entering into the insurance contract and at the time of accident.
c) Principle of Indemnity: this principles makes sure that Insured can’t make any profit from the insurance contract. Insurance contract is meant for coverage of losses only. Indemnity means a guarantee to put the insured in the position as he was before accident. This principle doesn’t apply to life insurance contracts.
d) Principle of Contribution: In case the insured took more than one insurance policy for same subject matter, he/she can’t make profit by making claim for same loss more than once. For example Tony has a property worth 500,000 naria. He took insurance from Company A worth 300,000 naria and from Company B 100,000 naria. In case of accident, he incurred a loss of 300,000 to the property. Tony can claim 300,000 naria from A but after that he can’t make profit by making a claim from Company B. Now Company A can make a claim from Company B to for proportional loss claim value.
e) Principle of Subrogation: After the insured gets the claim money, the insurer steps into the shoes of insured. After making the payment insurance claim, the insurer becomes the owner of subject matter. For example Tony took a insurance policy for his Car. In an accident his car totally damaged. Insurer paid the full policy value to insured. Now Tony can’t sell the scrap remained after the scrap.
f) Principle of Loss Minimisation: This principle states that the insured must take all the necessary steps to minimize the losses to inured assets. For example – Tony took insurance policy fo his house. In an cylinder blast, his house burnt. He should have called nearest fire station so that the loss could be minimised.
g) Principle of Causa Proxima: The word “Cause Proxima” means “Nearest Cause”. So an accident may be caused by more than one cause. In case property insured for only one cause. In such case nearest cause of the accident is found out. Insurer pays the claim money only if the nearest cause is insured.
2. The staff can do the following in an antagonist environment to get people to insure their properties or life: Gain an advantage over competitors. Clients are more likely to choose an insurance agent who is an expert in their industry. One can do this by raising own’s standing. Getting clients the appropriate policies at a decent cost is a good way to get a reputation as the go-to agent for the industry.
3. As the owner of the business I would use discounts and incentives to get and keep my customers. I would seminars and conferences to make my customers know more about my insurance business and will be honest about the risks and all involved thereby building a close trust bond between them.

NWANKWO BASIL CHUKWUEMEKA
2016/233850
ECONOMICS DEPARTMENT
1
Principle of Indemnity:
This principle states that the insurance company should restore the insured back to the position he or she was before the loss occurred given the premium paid.
This means that the insured cannot make profit from the insurance company
Principle of Insurable Interest:
The principal states that you can only insure what you have interest in also the insured typically must directly suffer from the loss.
Principal of Subrogation:
The insurance company has legal rights to pursue and recover losses or assets on behalf of the those they insured.
Principal of Causa Proxima:
The cause of loss must be covered under the insuring agreements and the cause of the loss must be made known to the insurer.
Principle of Contribution:
This principle applies when the insured takes more than one insurance for the same event or property. The insurance companies can come together to combine resources to indemnify a customer should in the case the companies have the same obligations to fulfill to the insured according to some stipulated methods.
That is to say that the insured cannot make profit from the two insurance companies
Principle of Utmost good faith:
This means that the insured must disclose all necessary information concerning the insurance policy and not to try to lie or deceive the insurer.
Principle of Mitigation of Loss:
In the event of some loss to the insured property, the insured must take the necessary steps to mitigate or minimize the loss.

2

I will advise the employee to advertise the insurance company through prospecting, in or to meet and talk to new people about the insurance company and the benefits of insuring their properties or life.

3

As the owner of the insurance company, I will use the networking marketing approach to meet and talk to new people that may love to insure their properties or life in my insurance company.

Name: ONAH GEORGE CHIEDOZIE.
REG. NO: 2017/241453.
DEPARTMENT: ECONOMICS.

The seven legal principel of insurance includes :
-Principle of Indemnity: Indemnity means security or compensation against loss or damage. The principle of indemnity is such principle of insurance stating that an insured may not be compensated by the insurance company in an amount exceeding the insured’s economic loss. In type of insurance the insured would be compensation with the amount equivalent to the actual loss and not the amount exceeding the loss.
-Principal of subrogation: The principle of subrogation enables the insured to claim the amount from the third party responsible for the loss. It allows the insurer to pursue legal methods to recover the amount of loss, For example, if you get injured in a road accident, due to reckless driving of a third party, the insurance company will compensate your loss and will also sue the third party to recover the money paid as claim.
-Double insurance: Double insurance denotes insurance of same subject matter with two different companies or with the same company under two different policies. Insurance is possible in case of indemnity contract like fire, marine and property insurance.
-Principle of proximate cause: Proximate cause literally means the ‘nearest cause’ or ‘direct cause’. This principle is applicable when the loss is the result of two or more causes. The proximate cause means; the most dominant and most effective cause of loss is considered. This principle is applicable when there are series of causes of damage or loss.
-Principle of Insurable interest: Under this principle of insurance, the insured must have interest in the subject matter of the insurance. Absence of insurance makes the contract null and void. If there is no insurable interest, an insurance company will not issue a policy. An insurable interest must exist at the time of the purchase of the insurance. For example, a creditor has an insurable interest in the life of a debtor, A person is considered to have an unlimited interest in the life of their spouse etc.
-Principal of utmost good faith: Under this insurance contract both the parties should have faith over each other. As a client it is the duty of the insured to disclose all the facts to the insurance company. Any fraud or misrepresentation of facts can result into cancellation of the contract.
-Nature of contract:Nature of contract is a fundamental principle of insurance contract. An insurance contract comes into existence when one party makes an offer or proposal of a contract and the other party accepts the proposal. A contract should be simple to be a valid contract. The person entering into a contract should enter with his free consent.
If I were the owner, the following should be placed in play
a. Create a friendly environment
b. Strategize
c. Advertise my indemnity
d. Re-orientation and enlightenment

1.Seven legal principles of insurance :
Principle of Utmost Good faith
Utmost good faith means that a higher degree of honesty is imposed on both parties to an insurance contract than is imposed on parties to other contracts.
Principle of Indemnity
The principle of indemnity states that the insured should not profit from a covered loss but should be restored to approximately the same financial position that existed prior to the loss.
Principle of Subrogation
Subrogation means substitution of the insurer in place of the insured for the purpose of claiming indemnity from a third person for a loss covered by insurance. This means that the insurer is entitled to recover from a negligent third party, any loss payments made to the insured.
Principle of Insurable Interest
The principle of insurable interest states that the insured must lose financially if a loss occurs, or must incur some other kind of harm if the loss takes place
Principle of Contribution
Contribution is the right of the insurer who has paid under a policy, to call upon other insurers equally or otherwise liable for the same loss to contribute to the payment.
Principle of Proximate Cause
The rule is that immediate and not the remote cause is to be regarded. The maxim is “sed causa proxima non-remota spectatuture
Principle of Mitigation of Loss
In the event of some mishap to the insured property, the insured must take all necessary steps to mitigate or minimize the loss, just as any prudent person would do in those circumstances. If he does not do so, the insurer can avoid the payment of loss attributable to his negligence.

2.For an employee with such target I would say more work should be put into advertising and not just that also portraying the good deeds that the insurance company has done for other customers

3.As the owner of the firm I would first and foremost create more discount packages and also align with the current social issues

Name: ALI, CHUKWUEMEKA JAPHET
Reg. No: 2017/242427
Dept: Economics (Major)

The seven principles of insurance are :-

1. Principle of Utmost Good Faith:
This is a very basic and first primary principle of insurance.
According to this principle, the insurance contract must be signed by both parties (i.e insurer and insured) in an absolute good faith or belief or trust.
The person getting insured must willingly disclose and surrender to the insurer his complete true information regarding the subject matter of insurance. The insurer’s liability gets void (i.e legally revoked or cancelled) if any facts, about the subject matter of insurance are either omitted, hidden, falsified or presented in a wrong manner by the insured.

2. Principle of Insurable Interest:
The principle of insurable interest states that the person getting insured must have insurable interest in the object of insurance. In simple words, the insured person must suffer some financial loss by the damage of the insured object. For example :The owner of a taxicab has insurable interest in the taxicab because he is getting income from it. But, if he sells it, he will not have an insurable interest left in that taxicab.
From above example, we can conclude that, ownership plays a very crucial role in evaluating insurable interest. Every person has an insurable interest in his own life. A merchant has insurable interest in his business of trading. Similarly, a creditor has insurable interest in his debtor.

3. Principle of Indemnity:

Indemnity means security, protection and compensation given against damage, loss or injury.
According to the principle of indemnity, an insurance contract is signed only for getting protection against unpredicted financial losses arising due to future uncertainties. Insurance contract is not made for making profit else its sole purpose is to give compensation in case of any damage or loss.

4. Principle of Contribution:
This is a corollary of the principle of indemnity. It applies to all contracts of indemnity, if the insured has taken out more than one policy on the same subject matter. According to this principle, the insured can claim the compensation only to the extent of actual loss either from all insurers or from any one insurer. If one insurer pays full compensation then that insurer can claim proportionate claim from the other insurers.

5. Principle of Subrogation:

According to the principle of subrogation, when the insured is compensated for the losses due to damage to his insured property, then the ownership right of such property shifts to the insurer.
This principle is applicable only when the damaged property has any value after the event causing the damage. The insurer can benefit out of subrogation rights only to the extent of the amount he has paid to the insured as compensation.

6. Principle of Loss Minimization:

According to the Principle of Loss Minimization, insured must always try his level best to minimize the loss of his insured property, in case of uncertain events like a fire outbreak or blast, etc. The insured must take all possible measures and necessary steps to control and reduce the losses in such a scenario. The insured must not neglect and behave irresponsibly during such events just because the property is insured. Hence it is a responsibility of the insured to protect his insured property and avoid further losses.

7. Principle of Causa Proxima (Nearest Cause)
This means when a loss is caused by more than one causes, the proximate or the nearest or the closest cause should be taken into consideration to decide the liability of the insurer.
The principle states that to find out whether the insurer is liable for the loss or not, the proximate (closest) and not the remote (farest) must be looked into.

2:

a: Professional partnerships: Referrals are a great way for insurance agents to get clients. But how do you maximize this strategy? Professional connections can bring in a lot of new clients. Set up mutual lead-sharing relationships with professionals who aren’t direct competitors but serve a similar client base to yours.

b. Client referrals

You will probably get some client referrals just by providing great service, but you will get more if you ask.

3:

•I will increase my customer base by keeping my website content fresh.

• Fresh and informative content is one of the main elements that pull in new visitors and potential customers.

• Also by promoting my insurance company on social media networks.

• Finally, providing excellent services built on trust and integrity will help increase the patronage of customers.

NAME:- OKONKWO FAITH MUNACHI
REG NO:- 2017/242422
E-MAIL:- okonkwo.faith.242422@unn.edu.ng

ANSWER
QUESTION 1

Principles of Insurance
The concept of insurance is risk distribution among a group of people. Hence, cooperation becomes the basic principle of insurance. To ensure the proper functioning of an insurance contract, the insurer and the insured have to uphold the 7 principles of Insurances mentioned below:

Utmost Good Faith
Proximate Cause
Insurable Interest
Indemnity
Subrogation
Contribution
Loss Minimization
Let us understand each principle of insurance with an example.

1. Principle of Utmost Good Faith
The fundamental principle is that both the parties in an insurance contract should act in good faith towards each other, i.e. they must provide clear and concise information related to the terms and conditions of the contract. The Insured should provide all the information related to the subject matter, and the insurer must give precise details regarding the contract.
Example – Jacob took a health insurance policy. At the time of taking insurance, he was a smoker and failed to disclose this fact. Later, he got cancer. In such a situation, the Insurance company will not be liable to bear the financial burden as Jacob concealed important facts.

2. Principle of Proximate Cause
This is also called the principle of ‘Causa Proxima’ or the nearest cause. This principle applies when the loss is the result of two or more causes. The insurance company will find the nearest cause of loss to the property. If the proximate cause is the one in which the property is insured, then the company must pay compensation. If it is not a cause the property is insured against, then no payment will be made by the insured.
Example – Due to fire, a wall of a building was damaged, and the municipal authority ordered it to be demolished. While demolition the adjoining building was damaged. The owner of the adjoining building claimed the loss under the fire policy. The court held that fire is the nearest cause of loss to the adjoining building, and the claim is payable as the falling of the wall is an inevitable result of the fire.

In the same example, the wall of the building damaged due to fire, fell down due to storm before it could be repaired and damaged an adjoining building. The owner of the adjoining building claimed the loss under the fire policy. In this case, the fire was a remote cause, and the storm was the proximate cause; hence the claim is not payable under the fire policy.

3. Principle of Insurable interest
This principle says that the individual (insured) must have an insurable interest in the subject matter. Insurable interest means that the subject matter for which the individual enters the insurance contract must provide some financial gain to the insured and also lead to a financial loss if there is any damage, destruction or loss. To claim the amount of insurance, the insured must be the owner of the subject matter both at the time of entering the contract and at the time of the accident.
Example – the owner of a vegetable cart has an insurable interest in the cart because he is earning money from it. However, if he sells the cart, he will no longer have an insurable interest in it.

4. Principle of Indemnity
This principle says that insurance is done only for the coverage of the loss; hence insured should not make any profit from the insurance contract. In other words, the insured should be compensated the amount equal to the actual loss and not the amount exceeding the loss. The purpose of the indemnity principle is to set back the insured at the same financial position as he was before the loss occurred. Principle of indemnity is observed strictly for property insurance and not applicable for the life insurance contract.
Example – The owner of a commercial building enters an insurance contract to recover the costs for any loss or damage in future. If the building sustains structural damages from fire, then the insurer will indemnify the owner for the costs to repair the building by way of reimbursing the owner for the exact amount spent on repair or by reconstructing the damaged areas using its own authorized contractors.

5. Principle of Subrogation
Subrogation means one party stands in for another. As per this principle, after the insured, i.e. the individual has been compensated for the incurred loss to him on the subject matter that was insured, the rights of the ownership of that property goes to the insurer, i.e. the company. Subrogation gives the right to the insurance company to claim the amount of loss from the third-party responsible for the same.
Example – If Mr A gets injured in a road accident, due to reckless driving of a third party, the company with which Mr A took the accidental insurance will compensate the loss occurred to Mr A and will also sue the third party to recover the money paid as claim.

6. Principle of Contribution
Contribution principle applies when the insured takes more than one insurance policy for the same subject matter. It states the same thing as in the principle of indemnity, i.e. the insured cannot make a profit by claiming the loss of one subject matter from different policies or companies.
Example – A property worth Rs. 5 Lakhs is insured with Company A for Rs. 3 lakhs and with company B for Rs.1 lakhs. The owner in case of damage to the property for 3 lakhs can claim the full amount from Company A but then he cannot claim any amount from Company B. Now, Company A can claim the proportional amount reimbursed value from Company B.

7. Principle of Loss Minimization
This principle says that as an owner, it is obligatory on the part of the insurer to take necessary steps to minimise the loss to the insured property. The principle does not allow the owner to be irresponsible or negligent just because the subject matter is insured.
Example – If a fire breaks out in your factory, you should take reasonable steps to put out the fire. You cannot just stand back and allow the fire to burn down the factory because you know that the insurance company will compensate for it.

QUESTION 2
The reason why most people feel antagonistic about insurance is because they do not understand the concept of insurance very well and have most probably heard bad stories about insurance which isn’t true. So, my advice to an employee seeking to meet his target is to sensitize and enlighten his target market about the benefits of insurance and the way it works. The employee should break the concept down in a way it will be properly understood. The employee should also try to make mouth watering offers to the target market that will make insurance more attractive.

QUESTION 3
As the owner of an insurance company I will:-
1. Employ people with good marketing skill.
2. Make the insurance company more attractive by using incentives and discounts.
3. Advertise the business on all possible platforms
4. Sensitize and enlighten people on the benefits of insurance.
5. Have a platform where people can air their views about what they think about my insurance company so I can take necessary steps to make the business better.

Name:Meteke Joy Orimusue
Reg.no:2017/242430
Department:Economics
Website: metekejoy01.blogspot.com
Email:joymetex2000@gmai.com

PRINCIPLES OF INSURANCE
Principle #1 – Principle of Utmost Good Faith (Uberrimae fidei)

The principle of utmost good faith is the most basic and primary level principle of insurance and it applies to all kind insurance policies. It simply means that the person who is getting insured must willingly disclose to the insurer, all his complete & true information regarding the subject matter of insurance.
The insurer’s liability exists only on the assumption that no material fact is hidden or falsely presented by the person getting insured.
There is a process called as “Underwriting” in insurance industry which is the activity of studying the risk and assigning the premium value for the case and it’s very important that the person buying any kind of insurance tells all the facts correctly and does not hide it.

Principle #2 – Principle of Insurable Interest
This principle says that the person who is taking insurance should have some insurable interest in that thing which is getting insured. So if there will be financial loss to the person if the insured object gets destroyed. If this is not the case, insurance cannot be taken
So when a breadwinner takes life insurance for his life, it makes sense because incase the person dies, there will be financial loss to family .
In the same way, you can get your car, bike, home, gold insured because you have insurable interest in that object. You can’t get your neighbor car insured and benefit because you do not have insurable interest in that.

Principle #3 – Principle of Indemnity
Principle of Indemnity says that Insurance is not to make profit, but only to compensate you against the losses incurred. It’s an assurance to restore the same position which was there before the loss.
So the compensation paid cannot be more than the losses incurred.
In term plan, people ask why companies ask for income details. It’s to make sure that a person takes limited insurance which goes with his financial status and is good enough to restore back his family life style which was there in existence.

Principle #4 – Principle of Contribution
This principle is just a corollary of the principle of indemnity. As per this principle, the insured company are liable to pay only their own contribution and they have right to recover back the excess money paid from other insurer.

Principle #5 – Principle of Subrogation
As per this principle, once the insured is paid for the losses due to damage to his insured property, then the ownership right of such property shifts to the insurer. So if your car / bike / house / valuables which you have insured is fully damaged and once you get compensation from insurance company, then they get the ownership of the item and now they can sell off the remains to recover their dues by that process
You can’t benefit from the remains of that item.
Imagine this scenario : You have car insurance and the car is stolen. The insurance company will pay you the full claim amount. However now the ownership rights are transferred to the insurance company and if the car is found in future by Police, it will be owned by insurance company

Principle #6 – Principle of Loss minimization
As per this principle, it’s the insured duty & responsibility to take all actions to minimize the losses if it’s in their control. The insured person should take all necessary steps to control and reduce the losses if possible.Imagine there is a small fire in the car for example. If the car is insured, the insured person can’t just sit and relax thinking that the car is insured, he will get the claim for sure.

Principle #7 – Principle of Causa Proxima (Nearest Cause)
This is a very important principle of insurance which an insured person should be aware about.
As per this principle of causa proxima, when a loss if caused by more than one causes, then the nearest or the closest cause should be taken into consideration to decide the liability of the insurer.
The nearest cause should be insured by the insurer, only then the insurer liability comes into picture and policy holder will be paid. Insurer will not be liable for the farthest cause.
One of the common examples .

BUSINESSES MODEL IN INSURANCE
Insurance companies base their business models around assuming and diversifying risk. The essential insurance model involves pooling risk from individual payers and redistributing it across a larger portfolio. Most insurance companies generate revenue in two ways: Charging premiums in exchange for insurance coverage, then reinvesting those premiums into other interest-generating assets. Like all private businesses, insurance companies try to market effectively and minimize administrative costs.

Pricing and Assuming Risk
Revenue model specifics vary among health insurance companies, property insurance companies, and financial guarantors. The first task of any insurer, however, is to price risk and charge a premium for assuming it.Without good underwriting, the insurance company would charge some customers too much and others too little for assuming risk. This could price out the least risky customers, eventually causing rates to increase even further. If a company prices its risk effectively, it should bring in more revenue in premiums than it spends on conditional payouts.

Evaluating Insurers
By smoothing out the fluctuations of the business, reinsurance makes the entire insurance sector more appropriate for investors.
Insurance sector companies, like any other non-financial service, are evaluated based on their profitability, expected growth, payout, and risk. But there are also issues specific to the sector. Since insurance companies do not make investments in fixed assets, little depreciation and very small capital expenditures are recorded.

Reinsurance
Some companies engage in reinsurance to reduce risk. Reinsurance is insurance that insurance companies buy to protect themselves from excessive losses due to high exposure. Reinsurance is an integral component of insurance companies’ efforts to keep themselves solvent and to avoid default due to payouts, and regulators mandate it for companies of a certain size and type.This is where insurance underwriting is critical.

Udeh Rita Ezinne
2017/249578

The important principle of insurance are as follows:
The main motive of insurance is cooperation. Insurance is defined as the equitable transfer of risk of loss from one entity to another, in exchange for a premium
1.Contribution:
Insurer which have similar obligations to the insured contribute in the indemnification according to some method

2. Principal of utmost good faith:
Under this insurance contract both the parties should have faith over each other. As a client it is the duty of the insured to disclose all the facts to the insurance company. Any fraud or misrepresentation of facts can result into cancellation of the contract.

3. Principle of Insurable interest
Under this principle of insurance, the insured must have interest in the subject matter of the insurance. Absence of insurance makes the contract null and void. If there is no insurable interest, an insurance company will not issue a policy.
An insurable interest must exist at the time of the purchase of the insurance. For example, a creditor has an insurable interest in the life of a debtor, A person is considered to have an unlimited interest in the life of their spouse etc.

4. Principle of indemnity:
Indemnity means security or compensation against loss or damage. The principle of indemnity is such principle of insurance stating that an insured may not be compensated by the insurance company in an amount exceeding the insured’s economic loss.
In type of insurance the insured would be compensation with the amount equivalent to the actual loss and not the amount exceeding the loss.
This is a regulatory principal. This principle is observed more strictly in property insurance than in life insurance.The purpose of this principle is to set back the insured to the same financial position that existed before the loss or damage occurred.

5. Principal of subrogation:
The principle of subrogation enables the insured to claim the amount from the third party responsible for the loss. It allows the insurer to pursue legal methods to recover the amount of loss, For example, if you get injured in a road accident, due to reckless driving of a third party, the insurance company will compensate your loss and will also sue the third party to recover the money paid as claim.

6. Mitigation:
in case of any loss or causality, the asset owner must attempt to keep loss a minimum as if the asset was not insured

7. Principle of proximate cause:
Proximate cause literally means the ‘nearest cause’ or ‘direct cause’. This principle is applicable when the loss is the result of two or more causes. The proximate cause means; the most dominant and most effective cause of loss is considered. This principle is applicable when there are series of causes of damage or loss

Question 2
I will advice the employee who have the obligation of meeting a particular target, to adopt a proper marketing strategies which will bring more customers to the company . This can be achieved if the employee yes good relationship with his customers.

QUESTION 3:
If I were the owner of an insurance firm I would try out the following processes in other to increase the patronage of clients towards my business
a. Create a friendly environment
d. Re-orientation and enlightenment
C. Granting incentive
D.Advertise indemnity
E. Building trust

Name; Okoronkwo Uchechukwu David
Reg No; 2017/241455
Department; Economics
Email; uchechukwu.okoronkwo.241455@unn.edu.ng

QUE 1;
Every business organization has principles and conducts that guide their operations and the insurance businesses and companies are not an exception. When an individual is insured by a company, there are basic legal requirements and there are referred to as legal principles of insurance, and are as follows
1. Indemnity: This principle states that the insurance company is required by law to compensate an insured up to the full amount of the insured’s interest in the event that the risk insured against occurs.
2. Insurable interest: This states that the insured must directly be affected by the risk or loss upon occurrence. He should have a stake or a portion in the loss suffered.
3. Utmost good faith (Uberima Fides): Upon entering an insurance agreement, the insured and insurer are required by law to disclose all material information. for instance, in life assurance, the insured must disclose his or her full health status to the insured.
4. Contribution: Insurers that have similar obligation to the insured contribute indemnification according to some method.
5. Subrogation: The insurance company has legal rights to pursue and recover losses or assets on behalf of the insured.
6. Causa proxima or proximate cause: The cause of loss must be covered by the policy. for instance, insuring a car against fire accident and the loss that occurred as a result of robbery.
7. Mitigation: In the event that a loss occurs, the insured should try to mitigate or keep it at its minimum as if there was no insurance for such loss.
The insurance business model aims at collecting more in premiums and paying out less in losses. Also, the aim to charge competitive prices which will be accepted by customers.

QUE 2;
An employee with such target in an insurance antagonist environment should;
i, Market the insurance packages from person to person, thus must possess the right marketing skills
ii, Offer incentives, discounts and other enticing benefits for those who patronise.

QUE 3;
If I be an owner, I would employ the following;
i, introduce a network that will enable people toget bonuses and incentives for bringing new members to insure properties.
ii, Advertise my indemnity
iii, Create a welcoming and friendly environment

NAME: OKEKE NANCY OGADIMMA
REG NO:2017/249557
DEPARTMENT: ECONOMICS
Email: ogadimmanancy12@gmail.com

Legal principles of insurance
Indemnity- the insurance company indemnifies or compensates the insured in the case of certain losses only to the insured’s interest.Take for example if someone losses his car,the insurance company is expected to buy a new car for such an individual.
Insurable interest- The insured typically must directly suffer from the loss.Insurable interest exists whether property insurance or insurance on a person is involved.The concept requires that the insured have a “stake” in the loss or damage to the life or property insured.
Utmost good faith-the insured and insurer are bound by a good faith bond of honesty and fairness, material facts must be disclosed.
Contribution- insurers which have similar obligations to the insured contribute in the indemnification according to some method.
Subrogation – the insurance company acquires legal rights to pursue resources on behalf of the for example,the insurer may sue those reliable for the insured loss.
Causa Proxima- the cause of loss must be covered under the insuring agreements and the dominant cause must not be excluded.It is also know as proximate cause.
Mitigation- In every case of loss or casualty the asset owner must attempt to keep loss to a minimum as if the asset was not insured.This simply means that the owner of the asset must be careful in handling his or her assets even though it has been insured.
3) As the owner of an insurance firm I can introduce a networking aspect whereby people will get bonuses and incentives for bringing new members to insure properties.
1b. Insurance Business Model
Most insurance companies make money in two different ways namely:
a. Underwriting- This is the process through which insurers select the risks to insure and decide how much in premiums to charge for accepting those risks.
b. Investing- This is achieved by investing the collected premium in lucrative ventures such as real estates, give out of loans etc.
The profit equation of the insurance company can be written as:
Profit = Earned premium+ investment income – incurred loss – underwriting expenses.
2.The way to achieve this is through reorientation of those who have a bag idea or wrong idea about it and public awareness for those who don’t about it.
3.The best way to achieve this is through giving workers incentives to hard-working workers.

NAME: OBODO CHISOM JESSICA
REG NUMBER: 2017/249538
EMAIL: chisom.obodo.249538@unn.edu.ng

QUESTION 1:
The seven principles of insurance are;
1.Principal of utmost good faith:
The principle of utmost good faith is the most basic and primary level principle of insurance and it applies to all kind insurance policies. Under this insurance contract both the parties should have faith over each other. As a client it is the duty of the insured to disclose all the facts to the insurance company. Any fraud or misrepresentation of facts can result into cancellation of the contract. For example – James took a health insurance policy. At the time of taking policy, he was a smoker and he didn’t disclose this fact. He got cancer. Insurance company won’t pay anything as James didn’t reveal the important facts.

2.Principle of Insurable interest:
Under this principle of insurance, the insured must have interest in the subject matter of the insurance. Absence of insurance makes the contract null and void. If there is no insurable interest, an insurance company will not issue a policy. An insurable interest must exist at the time of the purchase of the insurance. For example, a creditor has an insurable interest in the life of a debtor, A person is considered to have an unlimited interest in the life of their spouse etc.

3.Principle of indemnity:
Indemnity means security or compensation against loss or damage. The principle of indemnity is such principle of insurance stating that an insured may not be compensated by the insurance company in an amount exceeding the insured’s economic loss. In insurance principles the insured would be compensated with the amount equivalent to the actual loss and not the amount exceeding the loss. The purpose of this principle is to set back the insured to the same financial position that existed before the loss or damage occurred.

4.Principle of Contribution:
This principle is just a corollary of the principle of indemnity. As per this principle, the insured company are liable to pay only their own contribution and they have right to recover back the excess money paid from other insurer. For example – Adamu has a property worth $500,000. He took insurance from Company A worth $300,000 and from Company B – $100,000. In case of accident, he incurred a loss of $300,000 to the property. Adamu can claim $300,000 from A but after that he can’t make profit by making a claim from Company B. Now Company A can make a claim from Company B to for proportional loss claim value.

5.Principal of subrogation:
The principle of subrogation enables the insured to claim the amount from the third party responsible for the loss. It allows the insurer to pursue legal methods to recover the amount of loss, For example, if you get injured in a road accident, due to reckless driving of a third party, the insurance company will compensate your loss and will also sue the third party to recover the money paid as claim.

6.Principle of Loss Minimisation:
This principle states that the insured must take all the necessary steps to minimize the losses to inured assets. The insured person should take all necessary steps to control and reduce the losses if possible
For example – Ben took insurance policy for his house. In an cylinder blast, his house burnt. He should have called nearest fire station so that the loss could be minimised.

7.Principle of Causa Proxima (Nearest Cause):
This is a very important principle of insurance which an insured person should be aware about. Proximate cause literally means the ‘nearest cause’ or ‘direct cause’. This principle is applicable when the loss is the result of two or more causes. The proximate cause means; the most dominant and most effective cause of loss is considered. This principle is applicable when there are series of causes of damage or loss.

QUESTION 2:
As an insurance agent, it is known that networking is essential for bringing in new clients. However, going to the same events may just get you in front of the same people. You can go for other events such as, Meetup groups Trade shows,Local fairs,School board meetings,Charity events
You might also volunteer with a nonprofit organization in your area. It’s a good way to make connections with different individuals. Community connections make your business the go-to when someone mentions insurance.
Also, no amount of technology in the case of using online platforms can replace the power of personal, face-to-face, natural in-person relationship building. Simply building relationships and listening will present opportunities. Always hand out business cards with up-to-date contact information. Listen for opportunities and be prepared to introduce yourself, your business, and share advice about insurance in a brief, consultative way.

QUESTION 3:
As the owner of an insurance business you can increase your clients patronage by;
1.Creating a Referral System that works:
As you go about the business of getting new customers, remember that one of the best insurance selling strategies you can benefit from is through referrals. Word-of-mouth remains the most effective marketing tactic for a reason. So, deliberately design a refer and rewards program that lets your old customers bring more customers.

2.Advertising online:
Facebook, Google, LinkedIn, Twitter, etc. are great platforms to run your advert. Through those platforms you can tell a great number of people what the business is all about.

3.Hiring a Telemarketing Agency:
There’s plenty of companies out there that are running full-time insurance telemarketing programs.

4.Creating an agency website:
A well-designed website with an easy to remember URL is an absolute must. Ask your business clients if they’d consider linking their commercial websites to yours. It gives both of you an opportunity for referrals

7 Legal Principles of Insurance
There are basic legal requirements for an entity to be granted insurance. These legal principles of insurance include:
1. Principle of Indemnity- The insurance company indemnifies the insured in the case of certain losses only up to insured’s interest. When insured parties experience a loss for a specified peril, the coverage entitles the policyholder to make a claim against the insurer for the covered amount of loss as specified by the policy.
2. Principle of Insurable Interest- The insured typically must directly suffer from the loss. Insurable interest (i.e. a stake) must exist whether property insurance or insurance in a person is involved.
3. Principle of Utmost Good Faith( Uberrima Fides)- The insured and the insurer are bound by a good faith based on honesty and fairness. This implies that all material facts must be disclosed.
4. Principle of Contribution- Insurers which have similar obligations to the insured contributes in the indemnification according to some method.
5. Principle of Subrogation- The insurance company acquires legal rights to pursue recoveries on behalf of the insured.
6. Principle of Proximate Cause ( Causa Proxima)- The cause of loss must be covered under the insuring agreement of the policy and the dominant cause must not be excluded.
7. Principle of Mitigation- In case if any loss or casualty the asset owners must attempt to keep loss to a minimum as if the asset was not insured.

1b. Insurance Business Model
Most insurance companies make money in two different ways namely:
a. Underwriting- This is the process through which insurers select the risks to insure and decide how much in premiums to charge for accepting those risks.
b. Investing- This is achieved by investing the collected premium in lucrative ventures such as real estates, give out of loans etc.
The business model is to collect more in premium and investment income than is paid out in losses and to also offer a competitive price which consumers will accept.
The profit equation of the insurance company is written thus:
Profit = Earned premium+ investment income – incurred loss – underwriting expenses.

2. Given the scenario the staff has to more of a marketer other than an office inmate. He/she has to go into the streets and convince people about their insurance packages. He should gives mouthwatering incentives that would catch the fancy of these prospective customers.

3. Given the scenerio in number 2 above the owner of the insurance company can do the following in order to boost sales of their portfolio:
a. Use code switching and code mixing.
b. Use psychosomatic scientific advertising; that’s playing in their intelligence and emotions.
c. Having motives without telling them; Use of Camel’s head in the tent(its a principle of management)
d. Advertise your indemnity
e. Build the trust if your customers.
f. Reorientation of the customers minds since some customers suffer losses due to misinformation.
g. Use of incentives and discounts.

OKONKWO CHIDINMA ALISA
2017/243086
ECONOMICS

ANSWER
Question 1
Every discipline as we all know has its fundamental principles of which without them, such discipline can not or might not be able to function properly, effectively, and efficiently. So in the area of insurance, there are also some principles which have to be followed by any insurance firm in order to deliver properly. These principles are seven in number and are explained briefly below:
a. Principle of Indemnity: This principle states that the insurance company which is also called the insurer should restore the insured back to the position he or she was before the loss occurred given the insured’s premium. So whenever a client who wants to be insured or is already insured by an insurance company suffers a loss, that company should restore or rather indemnify its client back to the position he or she was in before the loss.
b. Principle of Insurable Interest: This principle states that whatever is to be covered or insured by the insurer should have a very big connection to the insured. That is, whatever thing be it property, or even a life as the case may be, the loss should be felt strongly by the insured.
c. Principle of Utmost Good Faith (Uberrima Fides): This principle states that everything information that would make the insurance policy be delivered by the insurance company which is the insurer and the insured should be disclosed between them both. That is, every information about the insured concerning the property or whatever is being insured should all be disclosed to the insurer.
d. Principle of Contribution: This principle states that insurance companies can come together to combine resources to indemnify a customer should in the case the companies have the same obligations to fulfill to the insured according to some stipulated methods.
e. Principle of Subrogation: This principle states that the insurance company has rights and liens to pursue whatever concerns the insured on behalf on the insured.
f. Principle of Proximate Cause (Causa Proxima): This principle states that whatever risk is to be insured, such risk must have what prompted and such should be disclosed before the insured can be indemnified. This implies that if a fire occurs for instance, such incident should be such that there is a close or proximate cause to which caused or influenced the fire.
g. Principle of Mitigation: This principle states that in the case of any loss that’s been insured, the insured should treat that property as if it weren’t insured in the first place. For instance, a driver who insured his car that he uses as a source of living could insure that vehicle but at the same time try to take good care of that property like it wasn’t insured in the first place.

Question 2
As for me if I were the employee, I would implore measures like granting incentives to customers whom I’m targeting. That is, for every policy they want to subscribe to, there would either be a discount or rather some gifts with which would influence my customers to subscribe to an insurance policy.

Question 3
I would implore the suggestion of my employee which is to grant incentives to motivate my target market to subscribe to some of our policies.