Select Currency
Translate this page

CREDIT RISK MODELLING TECHNIQUES FOR LIFE INSURERS

Format: MS WORD  |  Chapter: 1-5  |  Pages: 55  |  10741 Users found this project useful  |  Price NGN5,000

  DOWNLOAD THE FULL PROJECT

ABSTRACT

This study was intended to study credit risk modeling techniques for life insurers. This study was guided by the following objectives; to know the best techniques of credit risk modeling for life insurers. To examine the impact of credit risks on life insurers. To examine the benefits of credit to life insurer. To examine the relationship between credit and performance of insurers. To know if credit facilities are readily made available to insurers. The study employed the descriptive and explanatory design; questionnaires in addition to library research were applied in order to collect data. Primary data sources were used and data was analyzed using the chi-square statistical tool at 5% level of significance which was presented in frequency tables and percentage. The respondents under the study were 32 employees of the African Alliance Insurance company, Abuja. The study findings revealed that credit risks taken by insurance companies are high, credit risks negatively affect insurance institutions; based on the findings from the study, efforts should be made by the Nigerian government and stakeholders in ensuring a less risk model when it comes to credit facilities.                

 

CHAPTER ONE 

INTRODUCTION 

1.1. Background of the Study 

This study examines the factors that influence the techniques of credit risk modeling for life insurers in Nigeria - a major developing economy of sub-Sahara Africa. Credit risk is the risk of default on a debt that may arise from a borrower failing to make required payments.In the first resort, the risk is that of the lender and includes lost principal and interest, disruption to cash flows, and increased collection costs. The loss may be complete or partial and can arise in a number of circumstances Life insurance provides risk protection for low income earners and is part of the growing international micro-finance industry that emerged in the 1970s (Churchill, 2016, 2017; Roth, McCord and Liber, 2017; Matul, McCord, Phily and Harms, 2010). Approximately, 135 million people worldwide currently hold life-insurance policies with annual rates of growth in some emerging markets estimated to be up to 10% per annum (Lloyd’s of London, 2015). However, this number of life-insurance policies represents only about 2% to 3% of the potential market (Swiss Re, 2010). By protecting low income groups from the vulnerability of loss and shocks, life-insurance is increasingly being spouted as a formalized risk management solution to world poverty and a key driver of economic growth and entrepreneurial development in low income countries such as those of west Africa (Churchill, Phillips and Reinhard, 2011).

 

Over the last decade, a number of the world’s major banks have developed sophisticated systems to quantify and aggregate credit risk across geographical and product lines. The initial interest in credit risk models stemmed from the desire to develop more rigorous quantitative estimates of the amount of economic capital needed to support a bank’s risktaking activities. As the outputs of credit risk models have assumed an increasingly large role in the risk management processes of large banking institutions, the issue of their potential applicability for supervisory and regulatory purposes has also gained prominence. This review highlighted the wide range of practices both in the methodology used to develop the models and in the internal applications of the models’ output. This exercise also underscored a number of challenges and limitations to current modeling practices. From a supervisory perspective, the development of modeling methodology and the consequent improvements in the rigor and consistency of credit risk measurement hold significant appeal. These improvements in risk management may, according to national discretion, be acknowledged in supervisors’ assessment of banks’ internal controls and risk management practices.

 

From a regulatory perspective, the flexibility of models in responding to changes in the economic environment and innovations in financial products may reduce the incentive for banks to engage in regulatory capital arbitrage. Furthermore, a models-based approach may also bring capital requirements into closer alignment with the perceived riskiness of underlying assets, and may produce estimates of credit risk that better reflect the composition of each bank’s portfolio. However, before a portfolio modeling approach could be used in the formal process of setting regulatory capital requirements, regulators would have to be confident that models are not only well integrated with banks’ day-to-day credit risk management, but are also conceptually sound, empirically validated, and produce capital requirements that are comparable across institutions.


1.2. Statement of the General Problem 

Credit risk for life insurers in Nigeria has generated a lot of misconceptions and misinterpretations as regards its importance, the best techniques in its modeling, its benefits to life insurers and most importantly in the socio economic development of Nigeria.The confusion of methods to employ in reducing the risk involved with credits to life insurers both on the part of the insurers and the financial institution in question Credit availability to insurers have also been a very controversial issues as most insurers complain of not been assisted with credits.   

1.3. Objectives of the Study 

The following are the aims and objectives of the study 
1. To know the best techniques of credit risk modeling for life insurers. Ø To examine the impact of credit risks on life insurers. 
2. To examine the benefits of credit to life insurer. 
3. To examine the relationship between credit and performance of insurers. 
4. To know if credit facilities are readily made available to insurers.   

1.4. Significance of the Study 

This study will be important to insurance companies in the management of credit risks when it comes to life insurers. This study also will be of importance to Nigerians in unraveling the importance of credit to their profitability. The study will be important to the government and insurance stakeholders on the best method of credit risk modeling techniques for life insurers. This study will be important to insurers in knowing the best method of repaying their loans or credits. 

1.5. Scope and limitation of the Study 

This study is on the techniques of credit risk modeling for life insurers with the Nigerian insurance company serving as its case study.   

Limitation of the Study 

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview). 
Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.   

1.6.  Research Questions 

1. What are the best techniques of credit risk modeling for life insurers? 
2. What impactdo credit risks have on insurance companies? 
3. What are the benefits of credit to the life insurer? 
4. What is the relationship between credit and performance of insurers? 
5. Are credit facilities readily made available to insurers?   

1.7.  Research Hypotheses 

Hypothesis 1 
H0: credit risks negatively affect insurance/financial institutions. 
H1: credit risks positively affect insurance/financial institutions. 
Hypothesis 2 
H0: credit risks taken by insurance/financial institutions are low. 
H1: credit risks taken by insurance/financial institutions are high.

 

1.8.  Definition of Terms  

Credit risks: A credit risk is the risk of default on a debt that may arise from a borrower failing to make required payments. In the first resort, the risk is that of the lender and includes lost principal and interest, disruption to cash flows, and increased collection costs.

Model: a thing used as an example to follow or imitate.

Insurance: an arrangement by which a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a specified premium.

Life insurance: insurance that pays out a sum of money either on the death of the insured person or after a set period.

  DOWNLOAD THE FULL PROJECT

CREDIT RISK MODELLING TECHNIQUES FOR LIFE INSURERS

Not The Topic You Are Looking For?



For Quick Help Chat with Us Now!

+234 813 292 6373

+233 55 397 8005


HOW TO GET THE COMPLETE PROJECT ON CREDIT RISK MODELLING TECHNIQUES FOR LIFE INSURERS INSTANTLY

  • Click on the Download Button above.
  • Select any option to get the complete project immediately.
  • Chat with Our Instant Help Desk on +234 813 292 6373 for further assistance.
  • All projects on our website are well researched by professionals with high level of professionalism.

Here's what our amazing customers are saying

Azeez Abiodun
Moshood Abiola polytechnic
I actually googled and saw about iproject master, copied the number and contacted them through WhatsApp to ask for the availability of the material and to my luck they have it. So there was a delay with the project due to the covid19 pandemic. I was really scared before making the payment cause I’ve been scammed twice, they attended so well to me and that made me trust the process and made the payment and provided them with proof, I got my material in less than 10minutes
Very Good
Joseph M. Yohanna
Thanks a lot, am really grateful and will surely tell my friends about your website.
Excellent
MATTHEW NGBEDE
Ahmadu Bello University
I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!
Excellent
Peace From Unilag
I cried not knowing how to go about my project but the day i searched online and saw iprojectmaster, i called and got my full project in less than 15minutes, i was shocked!
Excellent
Abdul Mateen Iddrisu
UDS
At first I taught is a site full of fraudsters until I saw my project in my Gmail after my payment.. THANK YOU IPROJECTMASTER and May God the almighty bless u guys abundantly
Excellent
Samuel From Ajayi Crowther University
You guys just made life easier for students. Thanks alot iprojectmaster.com
Excellent
Abdulrahman Jibrin
Nti Abaji
Nice one work prompt delivery tanx
Very Good
Abdulrazak Bello Marsha
Usman Dan fodio University
It was quite a better guide for project and paper presentation purpoting. Many thanks.
Average
Dau Mohammed Kabiru
Kaduna State College of Education Gidan Waya
This is my first time..Your service is superb. But because I was pressed for time, I became jittery when I did not receive feedbackd. I will do more business with you and I will recommend you to my friends. Thank you.
Very Good
Merry From BSU
I am now a graduate because of iprojectmaster.com, God Bless you guys for me.
Excellent

FREQUENTLY ASKED QUESTIONS

How do I get this complete project on CREDIT RISK MODELLING TECHNIQUES FOR LIFE INSURERS?

Simply click on the Download button above and follow the procedure stated.

I have a fresh topic that is not on your website. How do I go about it?

How fast can I get this complete project on CREDIT RISK MODELLING TECHNIQUES FOR LIFE INSURERS?

Within 15 minutes if you want this exact project topic without adjustment

Is it a complete research project or just materials?

It is a Complete Research Project i.e Chapters 1-5, Abstract, Table of Contents, Full References, Questionnaires / Secondary Data

What if I want to change the case study for CREDIT RISK MODELLING TECHNIQUES FOR LIFE INSURERS, What do i do?

Chat with Our Instant Help Desk Now: +234 813 292 6373 and you will be responded to immediately

How will I get my complete project?

Your Complete Project Material will be sent to your Email Address in Ms Word document format

Can I get my Complete Project through WhatsApp?

Yes! We can send your Complete Research Project to your WhatsApp Number

What if my Project Supervisor made some changes to a topic i picked from your website?

Call Our Instant Help Desk Now: +234 813 292 6373 and you will be responded to immediately

Do you assist students with Assignment and Project Proposal?

Yes! Call Our Instant Help Desk Now: +234 813 292 6373 and you will be responded to immediately

What if i do not have any project topic idea at all?

Smiles! We've Got You Covered. Chat with us on WhatsApp Now to Get Instant Help: +234 813 292 6373

How can i trust this site?

We are well aware of fraudulent activities that have been happening on the internet. It is regrettable, but hopefully declining. However, we wish to reinstate to our esteemed clients that we are genuine and duly registered with the Corporate Affairs Commission as "PRIMEDGE TECHNOLOGY". This site runs on Secure Sockets Layer (SSL), therefore all transactions on this site are HIGHLY secure and safe!