CHAPTER ONE
INTRODUCTION
1.1      BACKGROUND OF STUDY
 Insurance companies are financial institution with the fundamental role of protecting firms or businesses and individuals from financial losses and provides invisible fund to the economy.  The services of insurance company is apparently important if a nation is to protect the future of business investment which is bedeviled with risk uncertainties to be less risky and make it protection and provision of scare investment fund to the industry is been played by insurance companies in Nigeria.  The genesis of insurance companies in Nigeria back into time from the immediate family system, the community association, the age grade union and cultural associations. Member of this association renders some kind of insurance coverage to their members in terms of adversity, money is contributed to assist member to build a new house if loss by national disaster, burial for dead member and financial assistance to the family left behind. This is an insurance policy in a local setting in Nigeria.  This practice developed to an organized association with rules and regulation guiding the welfare of members in terrible situation if distressed. This system does not allow for premium, however, the financial obligation was in the form of membership fees and contributions. Nigeria started to feel the emergence of modern insurance business in the middle of the 20th
century only as a branch insurance companies with head quarters in Europe and America.  This merger outfit developed rapidly into a large business conglomerate with financial assets comparable only to the banking sector.  The first insurance company to have a full branch office in Nigeria was royal exchange the only company fully established in the country since then, more than sixty more companies have been incorporated in Nigeria. There are about three hundred (300) registered insurance companies in Nigeria today. Among them is Nicon Insurance Corporation. PLC, which obviously is the case study of this research.