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The main focus of this research work is the role of reinsurance in economic growth and development of Nigeria .An attempt was made to find out the extent to which Nigeria reinsurance system has contributed to growth and development of the country. Emphasis were laid on economic and social impacts drawing particular attention on the impact it has on the gross national product (G N P)and it’s efforts in ensuring the welfare of the people. Furthermore, extensive review of related literature was made with a view to finding out the views of previous researchers on the topic .In addition all necessary data both primary and secondary data were collated, presented and analyzed with a view to realizing the objectives of this study. The primary data consisted to oral interview and a well structured questionnaire, textbooks, journals and magazine constituted the secondary data source.  Tables of percentage were used to present and analysis the data collected while the chi-square was used to test the postulated hypothesis.  A critical Analysis of reinsurance catalytic roles reveals, that the Nigeria reinsurance has achieved a major objective of our meager foreign earnings through much is still expected because it has not been able to earn much foreign income on the international market. However it is recommended that reinsurance should intensify their effort in inculcating insurance habits. Reinsurance companies should use the opportunity of buoyant profits to expend their operation. Development of reinsurance system is the care of the reinsurance success in Nigeria.





Title Page

Approval Page



Table of Contents




  • Background of study
  • Statement of problem
  • Objectives of the Study
  • Research Questions
  • Research Hypothesis
  • Significant of the study
  • Scope of the Study
  • Limitations of Study
  • Definition of the Terms



2.0 Literature Review

2.1 Concept and Definition of Reinsurance

2.2 Historical Development of Reinsurace in Nigeria

2.3 Method of Reinsurance

2.4 Nigeria Reinsurace Market

2.5 Concept of Economic Growth and Development

2.6 Problems of Nigerian Reinsurance Market

2.7 Future Prospects

2.8 Effect of Government Fiscal Policies on Reinsurance




Research Methodology and Design

3.1  Source of Data

3.2  Population of study

3.4   Sampling Size of Data

3.5  Method of Investment

3.6  Validity of the Instrument

3.7  Reliability of the Instrument

3.8  Method of Data Collection

3.9  Data Analysis Techniques





An Overview

  • Data Presentation
  • Testing of Hypothesis





  • Summary of Findings
  • Conclusions
  • Recommendations






1.1 Background of the study

The insurance industry as a whole has been classified as one of the prime movers within the economy of most developed countries.

The primary role of insurance industry is concerned with relieving the various companies of catastrophes of financial losses which they might be prone to.

It also involves organizing and encouraging risk taking as well as aiding enterprise to grow and lending and motivation individuals or government to gain as well as to invest.

The service of insurance which exist to promote and ensure the survival of other business as well as make profits rely so much on reinsurance. Insurance simply refers to the transfer of risk from one party called the insured to another known as the insurer, for this risk to be adequately protected; the insured needs some degree of protection. This can only be achieved by spreading the risk as wide as possible. The essence of risk spreading requires the insurer to insured against those risks he had accepted hence the reinsurance. The insurers usually have a maximum retention capacity so that any amount of risk accepted in excess of this retention capacity should be ceded to the reinsurance for security reasons it has been a fundamental principle of insurance to spread risk.

Moreover, insurers are very conscious of their inability to meet their potential liabilities caused by limited financial resources, frequency and severities of losses and the significance of reinsurance.

It might be interesting to ask such questions on how an insurer can accept large risk in excess of N120 million how liability contracts of business of overN150 million can be written or how a person can have a life policy of over N100 million.

The purpose of reinsurance is to provide at least part of the answer. Insurer in order to provide for such large risk have devised the system of reinsurance

Therefore, for an insurance company to be able to compete effectively and efficiently, it should have a strong reinsurance backing the need for an efficient reinsurance system cannot be over-emphasized in a developing nation. Generally, we know that the financial system of any society of which reinsurance is undoubtedly one in the framework within which capital formation takes place.

The activation of an effective reinsurance system will mobilize resources from the surplus unit of the economy and channel such to the deficit economic sector or unit of any country that strives for development. The system like other financial bodies stimulate investment and channel such to the deficit economic sector or unit of any country thus if acts as a transmitter of government economic policies for nation growth and development. Reinsurance companies set a part a handsome portion of their annual profit to finance worthy ventures that have spilled over effects on the development efforts of government. The Nigeria insurance year book shows that their total gross premium income in 1992 was N3.3 billion and estimated to about N4 billion in 1993 of the total amount collected, 70% of the premiums were channeled for investment purpose. These investments are often in real estate, stocks and shares of companies as well as in government securities. Reinsurance business is new and the practice is still developing in Nigeria

1.2. Purpose of the study

The objectives of this research are to examine the functions of reinsurance and assess their impact on the economic growth and development of Nigeria. Other major concern.                                                              1. To explore the ways and nears of seeking the insured improvements reinsurance for an effective reinsurance practice.

  1. To identify the problem military against the effective performance of reinsurance practice.
  2. The research will also focus on the principle of reinsurance their performance so far and their prospects for the future.

1.3 statement of problem

In making this research the reinsurance wished to examine these problems.

1 .delay in premium, delay in claim settlement, lack of satisfy and control problem.

  1. Government legislations and enactments for instance government had in its attempt to control the practice of insurance and protect the interest of the insuring public enacted law.
  2. Dearth of experience and qualified reinsurance professionals.


1.4 Significance Of Study

The study on the role of reinsurance in Nigeria economy is of paramount importance, this is because reinsurance as an economic tool has contributed greatly to the Nigeria economy. it obvious well-being can be seen in the areas of job opportunity, source of finance for government and the offering of protection to insurance companies in particuiar and public in general.

Reinsurance not only help in reducing the burden of the insurance companies but also strengthens their ability to increase their retention capacity.

The research serve as a medium enlighten the educated public on the significance of reinsurance and insurance activities in general. The research will also serve as a reference to future researchers who

1.5 Scope And Limitations Of The Study

This research is a study for the period between 1999-2009; the study covers the entire reinsurance company in Nigeria. The study is retracted to the reinsurance industry. It’s government and social

restrictions, the present state of reinsurance market, problem and prospect for the future; den to cost and time constants the study were be limited to two states of the nation namely Enugu and Lagos state.


  1. government legislation and enactment have adverse effect on reinsurance activities and such does not affect their performance negatively
  2. Government legislation and enactment have no direct adverse impact on reinsurance operations and does not affect performance adversely.
  3. reinsurance companies have not achieved the primary objectives of foreign exchange conservation.
  4. Reinsurance companies has achieved the primary role of conservation of our meager foreign earning.
  5. Reinsurance involvement in the spread of risk does not increase economic activities.
  6. Reinsurance involvement in the spread of risk results in increase in the economic activities.

1.7 Definition of terms


The dictionary of modern economic (peace) defines economic development as the process of improving the standard of living and well-being of the population of development loping countries raising per  capital income .

Economic Growth

This is capacity of a national economy to generate and sustain an annual increase in it’s gross national product


Insurance simply means the transfer of risk from one individual to another.


The insured is the person who transfers risk to another.


The insurer is the person that accepts a risk form another


Reinsurance means insuring again by an insurer those risk he has accepted to insre.

Retention Capacity:

Retention capacity is the maximum amount of risk an insurer can accommodate for himself.








J.O lrukwu-Reinsurance in the third world, Nigeria Caxton press (W.A) Ltd, Ibadan, 2nd edition (1990) J.O, lrukwu –Nigerian insurance year book: publication of Nigerian reinsurance corporation (1992)

J.O lrukwu insurance touch: insurance market in the third world vol.1 N02 (1989)





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