The Role of Insurance in the Development of Steel Industries in Nigeria

The Role of Insurance in the Development of Steel Industries in Nigeria

Chapter One of The Role of Insurance in the Development of Steel Industries in Nigeria

INTRODUCTION

Appreciation of the topic to be discussed will not be fully attained if a brief historical review of the steel industry is not given.

In the past, developing countries, Nigeria inclusive did not have a balance of economy and they urgently needed to be rescued from their under development trap. This they realized could not be achieved until they developed their own iron and steel industries, the bedrock of any economy. This recognition let Nigeria to develop its steel industry through this did not come into being until after the attainment of its independence.

In 1978, therefore, negotiations between Nigeria and foreign partners gave rise to the Delta steel company, Ajaokuta steel project and the three inland rolling mills at Osogbo, Katsina and Jos.

Thus, during the last 30 years, the federal government has been actively involved in the development of viable steel industry for Nigeria.

The Ajaokuta steel company Ltd, is an integrated blast finance producer of bars, shapes and medium structural. The present total in the company is in excess of N6 billion pre-sfem and definitely more if adjusted to reflect current replacement cost.

Any project with such a huge sum of money invested in it, which serves as the  bedrock of a nation’s economy is bound to pose a great concern and in an effort to provide protection, insurance is the best solution to it. Insurance is a business designed to absorb the risk of others, and remembering that risk is inherent I the production of steel, the steel industry, therefore, understands what risk is and appreciates the cushion provided by the insurance

The portifolio of insurance industry is made up of the following policies: fire, theft, burglary, machinery breakdown, group personal accident insurance to mention but a few.

With the provisions of these various covers each of the steel companies established is free to take up any of the insurance covers that best fits the risk faced. This security provided by the insurance industry goes along way to aid the economic development of the steel industries.

STATEMENT OF PROBLEMS

The occurrences of accident in the steeling Rolling mills are the major problem in the steel rolling company. It is a fundamental knowledge that accidents do not just happen, they are caused by human frailties as well as error of judgment. About 95% of the accidents are caused by human failures and mistakes while 5% could be traced to technical fault, disasters and other causes some of which are often regarded as act of God.