THE EFFECTS OF INSURANCE PREMIUM ON PERFORMANCE OF HAULAGE BUSINESS IN NIGERIA

Abstract

This research highlights the effects of insurance premium on the performance of haulage business in Nigeria. The research made use of both primary and secondary data. Primary data was gathered from a focus group discussion from the four haulage companies; Transport Service Limited(TSL), Manufacturers’ Delivery Service (MDS), Chevix Haulage and Movers (CHM) and Transport, Logistics and Haulage (BHN). Lagos state was chosen as a representative of all states in Nigeria because of high population of the haulage companies. Four haulage companies were selected from Lagos state because of the availability of data on haulage companies that have same insurance schemes subscription and which covers the period of the study. Secondary data was collected from both the haulage companies and the insurance company respectively. Records on insurance schemes by types subscribed to and premium paid by haulage companies were collected from 2004 to 2018. The results were presented in tables and charts. The research showed that BHN has the highest percentage of 69% in the year 2016 but MDS has least (12%) comprehensive policy subscription in the year 2004. MDS and CHM both have the highest subscription of Third Party Policy of 59% 2004 but TSL and BHN has least (9%) Third Party Policy subscription during the period of the study. CHM has the highest percentage of 64% in the year 2010 but BHN has least 12% in the year 2015. According to the results from the focus group discussion obtained, claim history of the haulage companies was ranked highest and additional consideration (overnight parking arrangement) was ranked least as the major factors determining the insurance schemes subscription by the haulage operators. Results from the study also showed that there is a positive relationship between the premium paid and the distance travelled which has also led to the better performance of the haulage business in Nigeria. It was therefore recommended that haulage companies are encouraged to subscribe more to the comprehensive policies as it covers all loses in case of accidents in order to enjoy proper indemnity. Insurance companies should also ensure prompt compensation for insured haulage trucks in cases of accidents.