a ae KY SSN product t0 be displayed, operated ee dismantled and adjusted. va trade Fair Advantages or exmibiion a2 ral Advertising j e 1. je ood forindusial Marken: 1 Misses the product tobe displayed, "sted andoperatd. Itatuactsa very largeaudience. 1t attracts international and local 3. 4, producers and customers. Disedvantages of Exhibition and Tra" Advertising 1, ltisheld occasionally. 2, Itisvery expensive. 21.17 FREE SAMPLE ADVERTISING Freesamplcisamedium: of advertising in which the manufacturer distributes samples of its product to members: ‘of the public so as to test the products. Thisis the most effective way of advertising a new product, but it is very expensive. 21.18 DIRECT MAILADVERTISING Direct mail advertising consists of any advert sent through the mail to specific people. It includes cards, letters, circulars and booklets. Direct mail advertising becomes handy when the advertisement is to be directed toa limited number of people falling into certain defined category. The cheapest medium is often the circular distributed by post. The people to receive the message are selected and communicated to directly. Advantages of Direct Mail Advertising 1, More information are conveyed. 2. “There is high selectivity since the persons toreceive the message are selected ang communicated to directly. Itis the most flexible of all the media of e advertise i ; 4, — Itisvery effective as there is always higher percentage of response. DS The needs of consumers can be conceived and personalised. Disadvantages of Direct Mail Advertising 1. Itisrelatively expensive. 2. Itis sometimes viewed negatively. 3 Theremay bedelay in delivery. 4. “There may be the problem of selectivity. 21.19 HANDBILL/ FLIER ADVERTISING Handbills are printed leaflets containing information about a product which are distributed to different people at various locations like market place, on the road ete in order to draw their attention to the product or services. This is good for introducing new products. 21.20 OTHER MEDIAADVERTISING Other media like bell-ringing, loud speakers / town criers, car stickers, T. shirts, caps, canvassing and painting of walls with pictures of a product can also create awareness for a product. 21.21 FACTORS AFFECTING CHOICE OF MEDIA 1. Coverage or Extent of Circulation: This refers to the number of people reached by the medium, i.e., the percentage ofa given market covered. 2052 Ee ee Tefers to the number of times the same viewer beesposedtothesameadver, ‘omrmunication Effective ess: Thi Rfestotheabity ofamedumisdayn the impact as desired by the advertiser to the target market, ‘The Target Audience: The type and social group to which an advertisement is directed and their purchasing power Must be taken into consideration. Cost: The cost of using a particular medium will determine the one to be chosen by the advertiser. Flexibility of a Medium: This refers to the number of different things the advertiser can do using the same medium, e.g. direct mail allows the enclosure of money, pencils. . Nature of the Goods: The nature of the products will determine the choice of media to be used for advertising. Geographical Selectivity: This is the ability of the medium to reach out to homes in specific geographical areas such as villages and hamlets. The Media Used by Competitors: The media used by manufacturers of competing products must be carefully considered before making a choice of medium. 21.22: MERITS OF ADVERTISING 1 “it Helps in Creating Job Opportunities: Advertising creates job opportunities for people working with the advertising agencies and others. It Provides Information About Features: [t helps the produeer to 1 coupons and | i explain the use, features and benefits of the product to the consumers. , Reduction of Cost : The cost per unit of goods will be reduced thereby consumers will pay less. ; Increase in Profit : Advertising increases the profitability of an Higher Revenue: The advertising firms also gain in terms of revenuc. Provision of Information about Existence of Goods: Advertising Provides information about the existence of a product, Improvement in Quality of Goods: Ithelps in improving the quality of goods as a result of healthy competition. Increase in Production: Advertising can lead to increase in production as more goods will be demanded. Creation of Awareness: It helps in creating awareness for a product. Demerits of Advertising 206 False and Misleading: Some advertisement may be false and misleading as they make exaggerated claims. it Leads to Monopoly: Heavy advertising by a dominant supplier may Testrict competition by preventing new entries to the market, High Cost: The high cost of advertising is passed on to the consumer in form of higher prices. Irrational Appeal: Advertising appeals mainly to the irrational motives in people. Buyers can Buy Unnecessarily: Advertising encourages buyers to make umnecessary purchases. Encourages too many Brand: Itcanprogramme. ‘encourage too many brand names. 5 a ising i fulin 6. — Anagency’s art department lays out 7. Wasteful: Advertising is w#5"° asia termsofresourees. stead ertising copy. % vounaly ionifanadvertiser 21.24 CONSUMER PROTECTION IN discredits the products of their rivals. ADVERTISING . erference with Consumers Free ua | 7 ajc: neers withthe free choice Adventising is subject to restrictions in various ofconsumers. media in order to protect the consumers. Some h voluntary and statutory system of control can be applied. These are: {2123 ADVERTISING AGENCIES advertising agencies are specialists in the planning. creating and placing of advertises inthe media. The agency functions between the | __ advertiser and the media owners. There are many advertising agencies operating in Nigeria, 1» eg-Lintas Nig. Ltd, Rossbel Advertsing and = «Insight Communications. { According to the Association of || Advertising Practitioners in Nigeria (AAPN), an agency is one which is able to offer client services, creative services, mechanical production and placing of advertisement. In other words, advertising agencies are F independent organisations of creative and business people who specialise in the | development and preparation of advertising plans, advertisements and other promotional tools. | Functions of the Advertising Agency ||. Theagencies create advertising copy. 2. Theybuy airtime and media space for { advert placement. . 3. The agencies advise clients on | advertising strategies and the media to use. $4. They conduct market research. 5. They help to assist the advertiser in Planning and executing its advertising 1. Code of Advertising Practice: The code must be accepted by all organisations advertising media, ¢.g. press and code states that no advertisement ing it will be accepted. The advertising code covers the () — Publicdecency | (@) Exploitation of superstition (@) Misleading descriptions and claims 2, Establishment of Advertising Pract. tioners Council of Nigeria: This is an industry-wide body concemned with the overall regulations and proper conduct of advertising in Nigeria. The AAPN is a member of the council 3. Establishment of Professional Group: The Association of Advertising Practitioners in Nigeria (AAPN) was established to regulate the practice of advertising. A code. of conduct for members anda code of standards relating to the advertisement of medicine and treatment have been developed and put in place for practitioners. 4, Statutory Coutrol: There are many acts of parliament restricting or controlling particular aspect of advertising. Some of the laws affecting advertising are: 207() Trade Description Act 196 (i) Salesof Goods Act 1393 @ __ Indecent Advertisement Act 1889 (@) — Copyright Act 1956 (v) Obscene Publication Act 1959 (vi) Advertisement Act 1967 ‘These acts are enacted to protect the consumers. 5. Consumer Education: In order to Protect the consumer against misleading advertisement, they must be well educated about the choice Of goods and services as welll as their rights. ‘This is the reason for the formation of aconsumer association, 6. Television Act 1954: This Act attempted to establish control Over advertising in such a way that advertisements would be inspected before they are shown tothe public. REVISION QUESTIONS ONS 1. List five functions of advertising (SSCE June, 1999), 2 (a) What isan advertising medium? (b) State five factors to be considered before choosing a medium. (c) Give eight examples of advertising media (SSCE June, 1997). 3 (a) Explain five roles of advertising. (b) Give three advantages and two disadvantages of using television asa medium of advertising (SSCE 268 June,1995). List and explain four types of advertising. (a) Explain two methods of advertising. {b) List cight factors that will influence buying decision. ‘State and explain five ways by which consumers can be protected against yDeh (a)Define advertising agencies. (b) State five functions ofadvenisingegences. (a) State five merits of advertising. (b) State five demerits of advertising. Write short notes on the following: (a) Persuasive advertising (b) Infor- mative advertising (c) Competitive advertising (d) Mass advertising (¢) Direct advenising (WASSCE June, 2001). (a) What is an advertising medium? (b) Mention eight advertising media. (c) Give five factors to be considered before choosing an advertising medium (WASSCE June, 2002). (a) Give four arguments for and three arguments against advertising. (b) List six advertising media used by business organizations in West Africa(WASSCE June, 2003). State two advantages of using cach of the following media of advertising: (a) Newspaper (b) Radio (c) Television (d) Posters (e) Direct mail (WASSCE. June, 2004).3, TOURISM IN NIGERIA 22.1 PERFORMANCE OBJECTIVES the end ofthis chapter, stents should be able to: Ww @) Define tourism and tourist, Identify and locate tourist centres on a msp. @) Discuss the importance of tourism. (4) entify problems of tourism and suggest } solutions to the problems. * 222 MEANING OF TOURISM Tourism isthe practice of travelling for pleasure or the business of offering information, accomodations, transportation and other © services to tourists. In other words, tourism is { the practice which involves the visiting of people to places of interest where they can relax, derive pleasure and entertainment. ‘The places where such people visits are called tourist or resort centres while the person who visits such places is called a tourist. Tourism is an activity done by an individual ora group of individuals, which leads to the movement from one place to another or acountry to another for performing a specifica specific task or a visit toa place or several places for the purpose of entertaining which lead to an | awareness of other civilizations and culture, also | increasing the knowledge of countries, culture and history. _ One of the most importam subjects of ‘tourism is attractions. Attractions are the most important components in the tourism system. Anetonsaethe main motivators for tours’ Renee me ie ‘would be no need for other tourism services. Indeed, tourism as such would not exist if it were not for attractions, 22.3. FACTORS FAVOURABLE FOR TOURISM The following factors are favourable to the development of tourism in Nigeria. The absence of these factors can binder or limit its development. These factors include the Favourable climate: For tourism to strive, the climate of the environment must be favourable so that tourists can relax and enjoy themselves. ! Fine beaches: In Nigeria, there exist beautiful beaches along the coast. Such beautiful beaches include the Bar Beach, Lekki and Badagry Beaches. Wild tife: In Nigeria, there also exist beautiful wide life or game reserves such as Yankari, Borgu Game Reserves. Effective publicity: For tourism to strive in Nigeria, there must be enough publicity to create awareness for the tourists on possible areas of attraction. Beautiful scenery: For tourism to grow, there must be natural and man made scenery where people can relax and entertain themselves. Good transport network or commu- nication: There must be good transportation system who will promote the movement of tourists without any obstructions. Vehicles and good roads’ are key to good tourism. Relative political stability: For tourism to strive in Nigeria, there must @) 8) @ © @ 209(9) (lay ay (2) (13) (4) ea palteal ctivities, No tourist will w visi ts Seieedined Aaa country that is Hospitality of the people: The People around the tourist centres must be humbse, kind, ffiendly and accommodative and this go.a long toallow the tourist tobe at home in the resort places, Presence of historic sites: History sites are places of interest tourists always Wantto Visit e.g. National Museums in Lagos and Benin, Ife. Cultural heritage: What may serve as tourist centres are the cultural heritage ofthe people e.g. the Anigungu Fishing Festival in Arugungu in Kebbi state as wellas the Igbo masquerades in Enugu. Hotels of international standards: Hotel intemational standard must also. be available forthe tourists to stay e.g. some important five star hotels like ‘Sheraton Hotel in Lagos and, Abuja and Durban Hotel in Kaduna, Favourable government policy: The government must provide a favourable policies that will boost tourism in the country. Such policies when they are good and favourable will enable tourists to visit the country. Availability of capital: Capital or fund must be available to build infrastructure like good roads, pipe-bome water and , electricity. These amenities do boost tourism. Good security: The security of the tourists must be guaranteed. Tourists will not visit places where there are kidnap terrorism and robbery. 22.4 MAJOR TOURIST CENTRES NIGERIA Azumini Blue River Rose: Azumini Blue River Rose is located in Abia State towards its boundary with Akwa Ibom State. The River has become a resort for tourists because of the Pleasantness it offers, The attractive features of the river include its crystal-clear blue water; Canoe rides; sandy beaches with such relaxation facilities as chairs and tables, At the beach also, barbecue grill are delicacies provided for Picnickers, The Long JuJu Shrine of Arochukwu: Arochukwu isa famous tourist destination with the cave of the famous long juju oracle as. a particular attraction. The cave is believed to hold the long «Metal pipe through which the gods speak to the People. A traditional religionist would find the oracle quite an attraction. It is, first and foremost, a religious centre witha well-laid down administrative structure headed by a Chief Priest. Yola Municipality: Yola is the capital of Adamawa State in the North-Eastem pan of the country. The most striking impression about the townisits undulating topography of hill chains particularly the three sister hills which stand side byside and share the same height. The cultural manifestations of the town get to their climax ‘between the months of March and May when the city celebrates its fishing festival at Lake Njuwa. Ibeno Beach: One of the numerous fine beaches in Nigeria is the Ibeno Beach in Akwa Tbom State. A lover of water sport will find the beach which stretches to James town on the Atlantic most inviting. 210oe AE i be Ogbunike Cave: Ogbunike Cave can described as the very wonder ofits. he cave, segmented into sections, is foul ‘Anambra State, some few ki thecave. Thestories are better told by the native tour guides. Rojenny Tourist Village: In Anambra State, just at the outskirts of Onitsha market town is found Rojenny Village, one of the leading tourist yesorts in Nigeria. Among the many attractions ofthe village are amusement park, joy rides and sporting/relaxation facilities Igbo-Ukwu: lgbo-Ukwu is an ancient town which has remained an attraction to tourists because of its bronze artifacts. The bronze which was first noticed in 1938 was later excavated by Thurstan Shaw, an English archaclogist. ‘The bronzes which date back to about the 9th century are of high value because of their historic relevance. Yankari National Park: Yankari National Park has become the most developed Wildlife park in Nigeria with a lot of attractions for visitors. The park is famous for its variety of animals available for viewing round the year. though the animals are better watched between ‘November and May periods of the dry season when the animals converge around the Gaji River, baboons, waterbucks, ¢lephants, crocodiles, bushbucks, duikers, warthogs, hippopotamus are among the animals commonly ‘seen at the park. ‘Wildd Warm Springs isa famous attraction in the Yankari National Park. It is particularly prized for its warm water. {tis available both night and day for tourists who cherish swimming. The National-Park is located in the South. Eastem area of Bauchi, the capital town of Bauchi State in the North-Eastern part of Nigeria. The Hills of Benue: Located in the middle belt region of Nigeria, Nigeria shares boundaries with Taraba State on the East; Plateau State on the North and Fdo State on the West; and Anambra, Enugu, Cross River States on the South. The entire landmass presents hills of, various shades and touristic appeals. Ikyogen Hills exude mild weather condition which ensures steady green vegetation and around: the-year for the grazing of animals, in the areas which is also known as Ikyogen Cattle Ranch. Ushogbo Hills in Ushogbo town also offers clement weather condition that makes it ‘most fulfilling spot for tourists and adventures. Bassa Hills, like the Ushogbo Hills, are worth visiting especially for their satisfying scenery; and Swem Hills are valued for their historical linkages. The hills are believed tobe the place for origin of the Tiv people. Lake Chad: Lake Chad occupies a strategic location serving not only Boma State of Nigeria where it is located but serving also the three neighbouring countries of Niger, Cameroon, and Chad. The lake, apart from serving the agricultural and economic needs of the people, attracts a great number of tourists. Of paramount interest to tourists is the boating opportunity and visits to the numerous fishing villages in the area Obudu Cattle Ranch: Obudu Cattle Ranch is. located in Cross River Slate towards the Nigeria-Cameroon border in the South-East. The Ranch is over 1,524m, has temperate weather condition to ensure green vegetation 2i1ing of cattle round the year. The Ranch isa tourist delight as a result of tg divergent i : ‘There are Natural swimming pool, poner beaut waaotern ila camp, bird watching, Sporting facilities and ‘sccommodstion, . Agbokim Waterfalls: Some i away from the Nigeria-C Pamernshene ee very captivating sight called Agbokim Waterfalls. The Falls situated in Cross River State tics tens than 30km from Ikom and ishighly recommended for picnics. The falls are Pleasantly surrounded by green vegetation, Sillicon Hill: Near the Nkpologu ‘campus of the Enugu State University of Science and Technology (ESUT) is found this very important mineral deposit. The hil! which is more than 300 metres above sea level and almost half a kilometre long has silica, an important raw material for the manufacture Of glasses. The surrounding environment is very captivating with hills, valleys and planes beautifully wrapped up such that one cannot ignore it's breath-taking views and awe-inspiring blend, Mbari Cultural Centres: The home of Mbari sculptural houses is located in the past. These sculptures are robust art manifestations of the prevalent social life and a monumental art sacrifice to“ALA” the earth goddess. In Mbari, Imo State there are very many objects like the terrorising beast, the plastic forms of symbols of the prevalent deities among which is the “ALA” herself, the Amadioha (Thunder god), the Ogwugwu (forest god) each deity with his orher mystical messengers such as snakes, monkeys, rams, tortoise and owl are properly Tepresented. A number of symbolic models were sculptured or painted. These sculptures reflect ———- t—~=t—S the Igbo aesthetics. The Mbari Cultural Centre is an open air museum and found in Ikenegbu layout at Owerri and at Eke-Nguru in Aboh Mbaise, Oguta Lake Holiday Complex: The holiday ‘Complex situates in Oguta local oe of Imo State is about 40km (Forty kilometres) Sway from Owerri, the capital of Imo State. ‘The lake has fresh water and the second largest natural lake in the country after Lake Chad. To complement the complex water-based feereation services, there are other interesting attractions to watch. ‘These include: (a) Golf Course with 18 standard intemational holes. (b) Relic of war(mini bunker) constructed by the defunct Biafran Navy during the 4 civil war, (c) Natural confluence of Oguta Lake and Urashi River, (@) Cruise boat services. (©) GolfCtub Bar House/Oguta Lake Mote! for refreshment, lodging and feeding, (f) — Mini-children recreation park Birnin Kudu Rock Painting: Bimin Kudu town lies in the South of Jigawa State. Bimin Kudu is noted for the presence of rocks, Fascinating are the ancient paintings on these rocks. The different paintings have clear information on the styles of the early settlers in the area. NOK Village: A trip to the Nok Village in Kaduna State launches visitors into physical romance with the much-talked-about culture of the Nok people. The cultures has been known for over 2,500 years. The Nok culture is better appreciated appraising the excavations made by the numerous scholars and researchers. 212viet ivurint contins inde country Other intervsting en saa heal reserve In Havehh wi Center in Henin A Tourist Center and Zama Rock jn are in, Cross Rivers Center, Yankurt Guanes State, The Egun Brozon Ca City, Filo State, Olamo Ro in Absokuta Opn State Abuja i) Nicon. Moye Hitan Motel i) Zuma Keck janal War Mosewmi ditplayt relice of the Nierinn civil war and! inventions. (Ata: Foremost electonics and] indigenous teebnalyay (i) Akwvetie: fsluc Haver to liv) Ussane tte it Village n Alewe te: Fanwias for felics of the Niperian civil war and] inventions (ih Ab indigenous tech (iit) Akwette: flue River Tourist Village (lv) Uwana Beach Akwette: Famous for W's unique weaving industry. () Aba Central Market (+i) Arochukwu Shrine (The long Juju) (Three Sisters Hill: Three hills Hand side by side ‘Aiwa Tbom|'(1) Ibeno: Famous for yaiching and swimming (Wl) Oroa Museum: African carvings (it) Opobo Deachies at Ihot Abas Anambra state is historically known for wreatcrafimarship, (i) Tjele masquerade from A guleti i) Omaba festival i) tant suseum aN (iv) The River Niger with the famous Niger bridge lnk the busting commercial fown of Onutsha with ports at Port Harcourt. Burury and Ware in Delta Stat, () Ofala festival (vi) Rogeny Tourist Village at Oba (a Stadium tha is equipped with recreational nics and] Follecuon of fiae| rd: Natural sand| RAITT ELAN HoT ne se a) (0) WikhI Lame Hone Game i (with vation aprings) on AN) Toants of At prime miner cay Alubabar tolawe Halwa) a (Wi) Yanib ari Came Hawerve , which hing peat African animals tee ale HAVES gate” Hach May Mane (i) eanic view of Uw confluence of th rivers Mier ened Migeria (i) Ushange Hille (i) Pnerniebin Valls (iv) Kwaghi theatrical display (9) Ingongh Dance (vi) Plemsant beach (i) Numerous fishing fest of fish con be 06 Attractions part of the pictures page) () Kyarlont Parks aig! anima) nnd bied lovers (i) Sheba of Boao (il) Lake Chad (iv) Sambian Game Reserve (¥) Fishing festival at Gahisua (vi) Ngeji Warn Springs (vii) eather tanning and omamental leather work (i) Obudu Cattle Ranch (i) Aghokin Falls (iy) Kowa Valls (1s) Game Reserve at Okwangwo in| (Obudu local government (¥) Bosh Game Reterve (vi) Mary Slessor Cottage (vii) National Museum (i) Sandy beaches of Axaba Koko Pod ‘Ajngbododu Ai) Olo’s Palace (in) ATP Timber and Plywood Factory (iv) isehiri Ju Festival (Y) Okere Juju Festival (vi) Agbara Juju Festival Part of “old-ENUGU wtate™ The capital of Edo is Benin city, which i famous for its unxque bronze, brass and ivory works of art and you can see some| of them on the artwork part of the plctures page. This is in addition to the following atractions: (i) Royal Palace of Benin Hot the Non Dele 213("Benin Museum ii) Benin Moar iv) Ervotan Statue 0) Somoriha tilly 4) Unto Tourist Center (0) Ogda 200 Part of “OWLONDO siaie™ Fro | (i) Milken Hat (i). Nike Lake (r)_1¥4 Valley Coat Mines Part of “old-RAUCHI state Imo (1) Oguta Lake Holi it Ww Orwat day vesout with is (1) Rolling bills of Ohigwe (ii) Owertv Amusement Pack (a) ebese Bowamical and Zoological (8) Patmy Beach Tourist Village a Awomama, al (si Afi. Famous for i's pot mash making, a (wit) Akwete Textile Center in Akwete (1) Birmin Kudu Rock Paintings: one of the oldest rock paintings in Nigeria, Kaduna] 0) Nok culture wi govemme at Kwon Jems local (0) Nofena Hill in Zana Legendary Lord Uugard Bridge in Kaduna town Durbar Hotel and Hamdala Motel in Kaduna (it). Mait Sirga Fails in Kafanchan 41) Palace of the Emir of Zana Kano Kano 4S popular for its traditional ares and cracts, including leather work, weaving. pottery and wood carving. (i) Emic's palace (i) Batunya Buds Estuary (in) Ayanduwa fishing festival (is) Ancient city Walls and gates, fin build about 900 vears ago (8) Gidan Mahaman Muscum (vi) Kofer Mats Dycing pits (believed to be the oldest in Afnea) (vir) Kano Zoological Garden at Gankum Albaba (iit) Kurmi Market» Ranges . (ix) Famous Tiga Dam (and Bagauds Lake Hotel) (x). Folgore Games Reserve Katana] (i) Well surrounding Katsina, 900 years cold with seven different gates (ii) Emir’s palace (i) Kusugu well in Daura ure Rock crafts, beads, swords, and glassware (i) Argungu Fishing and Cuttural} Festival, A major week-long intemationa event incloding: (i) Attand cratt exhubits (ii) Cultura! dances and muste of agneuisural fair (0) Local drama (iv) Traditional boxing and wrestling Av) Archery competition (01) Racing events beytle races, donkey tees, boat races (4 motor ratty (vn) Kahanci displ ‘events during the festival Faces, swimming, long deep ding competitions, hare hand fishing, wild: dock hunting. (ia) Grand fina fishing show (Kania Museum in Angungu ‘Kogh is famous for“ohene” cloth, woven with neh thread into exquisite style> varying colors (Old buildings ase by the royal Niger jsmpany when ithad a royal charter over Nigena (3) tron of Liberty: In the compound ot the first primary school in Northern] Nigena. (i) Contluence of Rivers Niger and Nigenaat Lokoya Ws) Bongu Game Reserve (9) _Ekucct festival of the Ebireas (0) Esie Muscum of stone figures. (x) Kainyt dam uu) Jebba dam (i) Mungo Park Monument Wy) OWU water falls (in village called Owa- Kajola in Melodun) Lagos hosts aver halfof the total industrial investment in Nigerta and the commercial] activities, {i) Seaside attraction and resorts at Bat] Beach, Vietoria Island i) Badagry: The first missionary post and houses the first two-storey building] in Whe country (ia) Lekhi Conservation Centre (v) Nattonal Museum: Which houses important relics such as the traditional Benin Bronzes and the replica of the} Kwan Fesiac ‘77 symbol. 214ara CO Nasaraw (vi) Tarkwa Bay Bese (vii) National The ad (una Me el cl : sorte death of an memorable occasions OF jnpectant person. @) Mortals Muhammed Memorial Rotanical Garden Past of “old-PLATEAU state” (@_ Gurara falls in Boru Village: dramtc rock gorges with x scenic, sloping landscape with high rising sprays of water running down on them from different directions, i) Zugurma park (ii). Shizoro Hydroelectric dam Gil) Mango Park's Cenotepty (iv) Bids town: Noted for ts handicrafts ‘made from beer bottles end coloured pless ian (v)_ Rainy Lake and National Gemes Pick with » wide variety of animals to sec. (i) Oba’s Palace at Ake: (Gi) Built sm 1854 asthe official residence of the Altke, the traditional ruler of gbaland Gi) Famous for is heavy concentration of antiquities and reli (iv) Centenary hall st Abeokuts (©). Birkisu Sungbo Strine in Kjebu-Ode (vi) Otumo Rock (vii) Isr Remo: Ananral holiday resort, (wil Agemo festival (0) Obinna Ojown festival () Egungun fesuval (xi) Oro festival (xiilgunnako Masquerades () National Museum at Owo: Has| ‘many wood end ivory carvings, brass bet wets Gi) Thogosi warm springs: A natural} {formation of warm and cold waters, rolling down over a hilly landscape and at the ‘nd forms 2 continuous stream. (i) Ideore Hts (iv) Igbotodo water front (©) Ipole-Roro Water falls (vi) Oke Marie Hills Ola-Akoko 215 to be the origin ofthe Yoruba people () Osun Shrine at Oshorgbo (which ag houses sone decorated calabashes) m0 at He-lfe rs Obokun in esha (iv) Me city walls a Heetfe (9) Ooni of ies place at He-tfe (vi). Osun festival: 2 week-or-mores| festival mainly in honor of the ancien gods. (vi) Me museum: Has many bronze en terracotta sculptures dating back 10 the] 13th century, (viii) Erin-Ijesa water falls, (i) Woadan University Zoo (ii) Agodi Zoological garden (it) Upper Ogun Games Reserve (iv) Mbari Arts Center (v)_ Egungun festival (vi) Ode-Ibadan festival (vi) International Institute of Tropical Agriculture @)_ National museum of Jos: The ofdest inthe country Gi) Museum of Tradition Nigerian] Architecture: Contains various} architectural designs of major Nigerian ethnic groups. (Gi) Jos Wildlife Safari Park (iv) Zoological gardens (9) Assop falls (vi) Kura fais (ii) Wase Rock (vili)Kerang Volcanic Mountain: where the Swan brand spring water is produced. (ix) Shere bills (3) (i) _Isase Boro Park: A zoo with a widel variety of eniraals (Gi) Nigeria's first petroleum refinery at lesa Elema (iil) Water Gtess Boetyard (Gv) Isaka Holiday Crnize Inland () Oil weil st Ofoibied (i) Riverine town of Bonny with the] beautiful Finims Beech (vii) Monument of King Jaja of Opobo} (vii)Retics of Akassa raid of 1859 (Gx) ‘Steve transit hall at Akassa ) Opidi Shrine at Nembe (i) Onne port ‘Masquerade display at Abonems(0 Mambills Plateau Gathaka (i) Gashaka-Gumpti National Parks {iii)_Kacimbels Game Reserves JUSTIFICATION FOR TOURISM There ‘are three main justification for tourism in Nigeria, These justification include: (i) Leisure (ii) Recreation (iii) Education, 0 Leisure: Leisure isthe time when you are not working or studying and can relax and do things you enjoy. Leisure isone of the most important justification for tourism. This give individuals or tourists the opportunity to enjoy themselves to the fullest while: they visit Fesort centres, Recreation: Recreation is any activity that you do for pleasure or amusement. Tourism also create room for recreation of tourists as they involve in doing things which they enjoy in the resort centres c.g. watching football and dancing, Education: One of the major justification for tourism is education, When tourist visit any places of interest oreven a country, they take their time toeducate themselves on the behaviour, traditional and cuttural life of the people. Ithelps them to leam on certain things. which they do not know before. 226 i) (ai) (iv) ™ 116 IMPORTANCE OR ADVANTAGES: OR CONTRIBUTIONS OF TOURISM PTHE TOURIST INDUSTRY TO THE ECONOMIC DEVELOPMENT OF NIGERIA, Foreign exchange earning: The Activities of tourism all over the world have been know to geterate foreign ‘earnings to the nation, Huge taxes are generated in tourism and it has become the major source of government revenue, Generation of employment: Many People are engaged in tourism and such Means of lively hood now generate employment o so many people. Improvement of transport facilities: ‘Transport facilities are improved upon When tourism is embarked upon. New Vehicles are purchased, roads are tyred. and other associated transport facilities are also provided. Increase in commercial activities: There is always an increase in commercial activities where resort centres are located, This involves the buying and selling of commodities Produced in resort centres. Provision of infrastructure: Infiastructure are usually provided in and around the tourist centres. Such facilities. include the provision of houses or hotels, pipe-bome water and clectricity Improved social services; Social services in many forms are usually provided to tourists in resort centres, Such social services include provision of food and drinks, wear, barbing, tailoring, banking and transportation to(vill) ) i) (xi) both the tourists and the local sn meter : As a result ofthe vist toate local ele eam more money and this help them to improved on their standard of living. It fosters economic integration: Tourism also aid or fosters national and intemation economic integration as tourists visit a country. It helps toensure that some economic issues are gained by both the tourists and the host community or nation. Development of local craft industries: The existence of tourist centres do help the local communities to showcase there local industries which are now developed to international lelvels, Income to individuals: Asa result of the siting of tourist centres, so many people now engage themselves in so many economic activities thereby making them to generate income for themselves. Conservation of wild life: The siting of tourist centres in some places like the Yankari and Borgu have helped to establish some game reserves in such Improvmet area. Development of towns: some of these resort areas which were originally villages are now developed into big towns and cities that pre now popular in the country. : 22.7 DISADVANTAGES OF TOURISM. (Over-dependence of'a country on tourist industry is risky. Itcan lead to breakdown of traditions values and ways of life of the local people. Itcan leadto he spread of diseasese.y AIDS. 22.8 PROBLEMS OF TOURISM Some of the major problems facing tourism development in Nigeria include the following: @w) ) wi) Inadequate funding: In Nigeria, the tourism industry is poorly funded. Poor funding has led to the poor development of the sub-sector, lack of access roads: In Nigeria, there is basically lack of access roads to most resort centres. Many of the roads are in bad shape and this tends not to attract tourists to such centres. Poor publicity: Lack of effective publicity or communication system for publicizing the scenery. wildlife and cultural attractions to visitors is a big problem in the country. Inadequate personnel: One of the problems of developing tourism attractions in Nigeria is the inadequacy of competent and trained tourism personnel, Very few personnel are trained and competent. Inck of private investment: In Nigeria, tourism developement are left in the hand of goverment. Government alone cannot develop tourism in Nigeria. Inadequate infrastructure: Basic infrastructure like electricity, pipe-bome water cic are inadequate and in some areas are lacking'and this tends to reduce the development of tourism in Nigeria. Security problems: Tourism is unable(viti) (iv) todevelop in Nigeria as a of security such as the meat of threat country. i Absence of tourism boards: There j complete absence of tourism boards Hs the country. This has lead to the Poor Sevelopment of tourism in Nigeria, SOLUTION TO THE PROBLEMS OF TOURISM IN NIGERIA 3 Increase in budgetary provision: es should be increase and release of Kdgetary provisions by the govemmment fortourism development. Such fundwill >" goa long way in Providing infrastructural 6 developement of the country, i Lauching of tourism developement trust fund: the government should 7, launch tourism Development fund. This 7° fund will also go.a long way to ensure ‘ adequate provision of capital for tourism development in the country. 9. Provision ofenablingenvironment: 7 the govemment should also provide the enabling environment for tourism to !2- strive. Regulations and laws have to be flexible so as to attract irivestors into the industry. Pursuance of aggressive marketing: Pursuance of aggressive marketing strategies have to be put in place to promote tourism assets locally and "Engagement of private sector: the government should encourage and embrace the private sector in order to drive the tourism development programmes. 218 REVISH iy {vi) Establishment of more tourism boards: More tourism boards should beestablished by the government. These boards do encourage the growth and development of tourism in the country. ‘ ION QUESTIONS ** Write short notes on the following: (2) Tourist(b) Tourist centres. Write short notes on toursim, Listand discuss: eight factors favourable for tourism in Nigeria. Write short notes on the justification for tourism in Nigeria. 'dentify and write short notes on the tourist centres in your state, Name five important tourist centres in Nigeria and name the state where: they are located, List and explain eight importance of tourism in Nigeria. List and discuss six problems facing tourism in Nigeria, List and explain five solutions to the Problems of tourism in Nigeria. (a) Ona sketched map of Nigeria, show and name (i) three areas important for tounsm (i) one town in each of the areas {b) Describe the factors which have led to the development of tourist centres in Nigeria. (c) Explain any three factors hindering the developmentof tourism in Nigeria. (SSCE Nov, 1993). (a) Ona sketched map of Nigeria, locate and name: (i) two game reserves. (ii) one important town in each of the areas in (a) above. (b) State three ways by which tourism has affected the lives of the people in any one of the arcasaaa ata (c) Suggest three identified in) por pay be boosted a SSCE June, 1999) factors that contribute tothe development of tourism in Nigeria. (b) Highlight any five contributions ofthe tourist industry to the economic development of Nigeria. (WASSCE June, 2008). (a) Ona sketched map of Nigeria, show and name: (i) three areas important for tourism. (ii) one town in each of the areas (b) Describe the factors which have led to the development of tourist centres in Nigeria. (c) Explain any three factors hindering the development of tourism in Nigeria. (SSCE Nov, 219 1993). (a) Ona sketched map of Nigeria, locag and name: (i) two Game reserve, (ii) one important town in each of thy areas in (a) above. (b) State three ways by which tourism has affected the liveg of the people in any one of the arcay identified in (a) above. (c) Sugges, three ways by which tourism may be boosted in Nigeria (WASSCE June, 1999) (a) Outline any five factors that contribute tothe development of tourism in Nigeria. (b)Highlightany five contributions ofthe tourist industry to the economic development of Nigeria. (WASSCE June, 2008)23. INSURANCE 23.1 PERFORMANCE OBJECTIVES Atthe end of this chapter, students should be ableto: (1) Define insurance. (2) Trace the history of insurance in Nigeria. (3) Listand explain the basic principles. (4) Describe the various types of insurance. (5) Describe the various types of risks, {6) Explain the meaning of under writer, (7) Explain the role of insurance broker and agents. (8) Give examples of under writers, (9) Discuss the importance of insurance of business. 23.2 NITION OF INSURANCE SSURANCE Insurance can be defined as an agreement whereby one party promises to indemnify or pay another party a sum of money in the event ofhis suffering a specified loss or damages. It can also be defined as a system for providing financial compensation for the effects of loss. the payments being made from the accumulated contributions of all parties participating in the fund or scheme. The main principle of insurance is the pooling of risks. The insurcr-will collect premium from a group of people who suffer similar risk to create a common fund out of which compensation will be paid to those who suffer losses. Compensation for victims will depend on the premium paid and the extent of losses suffered. Insurance is one of the aids to trade. Although it cannot cancel out the risk, it offers ee. monclary assistance. A great variety ofriskscan now be covered by insurance. On the other hand, assurance is the provision of cover ‘against some eventuality which must occur at some time in the future, e.g. death ofa person. {tdeals with events which must happen, hence itis based on possibilities. Differences between Insurance and Assurance (2) Itis a provision of cover against ‘eventualities which may never occur, Some forms of insurance schemes existed in Nigeria before the coming of westem civilisation. ‘The predominant system during this period was the organised social scheme which included the extended family system, association of age grade and other unions. ‘The rationale behind this system was to ‘ensure periodic contribution from members and torally round any member that suffer a loss such as death and illness. This form of social insurance isstill in existence in Nigeria among community groups. 220eo i In the 20th century, the British merchants introduced modem commercial insurance into ‘west Africa. In 1921, the Royal Exchange | Insurance established the first insurance company witha branch in This company dominated the scene for 30 years until 1949 ‘when other companies like General Assurance Nigeriaare: Reinsurance Corporation of Nigeria Industrial and General Insurance (IG}) Lion of Africa Insurance Amicable Insurance NICON 4 BY to Society and Tobacco Insurance Company 23.4 INSURABLEANDNON-INSURABLE Limited were established. In 1950, indigenous participation in insurance business was enhanced with the establishment of African Insurance Company. By the time ‘Nigeria got independence, the number had risen to 25 and were mostly owned by Nigerians. The National Insurance Corporation of Nigeria (NICON) was | established in 1969 as a ploy by the Nigerian f government to check the operators of insurance business. The Nigeria Reinsurance Corporation was also established in 1977. Inthe 1980s, the number of insurance companies had increased to over 100 as some reinsurance companies were established, ¢.g- Universal Reinsurance Company. In addition, over 150 insurance brokers were also registered. ‘Atpresent, the leading insurance company in the country is NICON, which was formerly owned by the federal government, and it underwrites at least 35% of the total insurance in Nigeria. Over the years, different acts have been promulgated to control and regulate the insurance industry, e.g. Insurance Companies Act 1961, Marine Insurance Act 1961 and Insurance Decree 1976..Today, the current legislation is the Insurance Decree 1991. Presently, the share capital for the setting up ofan insurance company has been increased and new measures aimed at controlling the activities of the industry have also been introduced. Some insurance companies in f RISKS Insurable Risks: Insurable risks are the type of risks which the insurer can make provision for or insure against because it is possible to collect, calculate and estimate the likely furure losses. Insurable risks have previous statistics which can be used asa basis for estimating the premium, Itholds out the prospect of loss but not gain, The risks ean be forecast and measured, eg. Motor, Life, Marine and Insurance, Non-Insurable Risks: Non-insurable risks are the type of risks which the insurance company is not ready to insure against simply because the likely future losses cannot ‘be estimated and calculated. It holds the prospect of gain as well as loss. The risks cannot be forecast and measured. ‘Some examples of non-insurable risks are: Loss of profit through competition Gambling, Launching of new product Opening of anew shop Risks duc to war Change in fashion Loss incurred as a result of bad mM Oyweepyn management The poor location of a business 9. Lossof profit through fall in demand Speculation. 2 2211 Insurance: Indemnity Insurance is i ome of insurance in which the insured is restored to his former position before the incident occurred, by receiving compensation, The examples are insurance against fire marine and burglary. ; Non-indemnity Insurance: Non-indemnity insurance refers to those associated risks for which no amount of compensation could. equate to the loss suffered by the insured. However, only a consolation Payment is made to the insured. An example of non-indemnity insurance islife assurance, 23.5 BASIC PRINCIPLES, OF INSURANCE ey of Insurance refer to the basic Principles which must: ini ee be fulfilled in insurance, 1. Indemnity: Indemnity is the ‘compensation given to the insured by the insurer in the event of his suffering a loss. Under this principle, the insured will be given compensation for loss suffered. He will be restored to his former position before the loss occurred. Alllother types of insurance are insurance of indemnity except life assurance, e.g. ifa man loses a car, he will be compensated for it. 2 Insurable Interest: This is one of the principles of insurance which states that, one can only insure properties that will bring loss or liabilities to him upon destruction. The properties ofa rleighbour or friend cannot be insured by the individual. He can only insure property that will bring financial loss to himself. Any insurance without this principle is void and destitute of any legal effect, e.g. you cannot insure the motor car of your friend. 3. Fides) : This principle states that in any insurance contract, all relevant information that will affect the validity of the agreement must be disclosed by the parties involved. The parties must disclose all material facts truthfully so as not to render the contract void. The true valuc of the property Must not be under or overstated, e.g. in a life assurance, if the assured did not disclose to the insurance company that he has a terminal disease before the signing of the agreement, when he dies, the insurer may refuse to honour its own part of the contract. 4. Contribution: The principle states that where a person has insured a certain risk with many insurance companies, he cannot claim ‘compensation in full from each of the insurance ‘Companies. This means that each of the insurance companies will pay a certain proportion of the loss. The insured cannot make gain or profit. If he has been settled by one insurance company, he is not entitled to receive contribution from other insurance firms. 5. Proximate Cause: This principle states that only the losses or liabilities which arise from the direct and immediate cause of the event insured against are indemnified. There must be a link between the loss suffered and the risk for which the insurance has been taken. The loss must arise directly from an insured peril or must be the result ofa direct chain of events initiated by an insured peril, e.g. Otunba Oresanwo insured his cat against fire but the car had accident. The insurance company can only compensate ifit is fire and notaccident. 6. Subrogation: Under this principle, once the insurer has given an indemnity for loss, he can take over the subject matter of the insurance and the rights relating to it. 222 Utmost Good Faith (Uberti. —_ “The principle implies that the insurance company ‘can take over the rights of the insured once he has been compensated. The insurer can take overthe scrap and sell ito reduce their liabilities. A very good example in which subrogation arises is in motor insurance, Dr. Olisa's car instance, had an accident and he has been compensated. The car is no longer his own; the insurer can sell the scrap. 7. Abandonment: This principle states that property that has been insured may be abandoned in certain cases if its actual loss appears to be unavoidable or if the cost of repairing the damaged property will exceed their value. In such cases, the insured will inform the insurer that he wishes to abandon the goods, €.g.as.a constructive total Joss under marine insurance. 23.6 TYPES OF INSURANCE ‘There are two major groups of insurance. These are: (a) Life insurance: This include: (i) while life assurance (ii) Endowment (iii) Term Assurance (iv) Annuities. (b) Non-life Insurance: This is the branch of insurance which is taken as a protection against loss of properties and other valuables. The non-life insurance include: L. Bad debts 10. Consequential loss 2. Goodsin transit 11. Contractorall risk 3. Groupinsurance 12. Employer liability 4. Cashintransit 13. Aviation insurance 5. Fidelity guarantec 14. Accident glass 6. Exportcredit 15. Motorvehicle guarantee 16, Marine insurance 7. Plate glass 17. Fire 8. Agricultural insurance 9. Burglary, thefi, robbery. Bed Debts Insurance: Bad debts are debig that are difficult to collect. Therefore, bad debi, insurance covers debts that may not be paid by the debtors to the business. The risk of non. payment is the subject matter of this type of insurance. Here, the insurance company wil} guarantee to protect the business agains, irrecoverable debts. Goods in Transit: Goods in transit insurance is a type of insurance which covers against accidental damage or loss to goods in transit. It provides compensation tothe owner of goods if the goods are damaged or lost in transit, Goods sent by any means of transportation should be covered by this policy. Parcels eters orluggagescan also be insured under the policy Group Insurance: Group insurance is taken to cover a group of people or workers. These are policies on a collective basis, assuring members ofa particular group such as a football team or a group of employees of a firm. The insurer is liable for every onc covered by the single policy. It reduces the cost of administration and the dependants will benefitif the workeris involved in an accident. This policy also encourages employees to remain in Cash in Transit: Cash in transit policy provides compensation to the insured in the event of cash being stolen either from the business premises, home or while it is being carried toor from the bank. It covers cash taken outside to purchase goods and cash brought into the office « for workers’ salaries. It may provide ‘compensation to employes who may be injured during a robbery operation. 223ty Guarantee Insurance: Fidelity Lie isa pe of Policy effected by an enployes, suring him against the possibility of the dishonesty of an employee. The objectis to provide cover against loss by reason of dishonesty of peuple holding positions of trust. This is taken by a firm to guide against the tisk or less arising from misappropriation ofmoney by the employees in change of cash, eg. cashier, accountants. Export Credit Guarantee Insurance: The exper credit guarantee insurance policy provides: cover for exporters against the major risks of exporting. It guarantees to cover exporters of goods Agsinst the risk of bad debts as aresult of goods sold to foreign buyers. Some uncertainties in international trade, li insolvency of buyers, action of some forcign governments, ¢.g. preventing performance of contract trade restrictions, civil disturbances and exchange control difficulties are also covered by this policy. Export credit guarantee insurance fictions to: 0 cover non-payment by the buyer, @ indemnify the exponer inthe event of non-payment and encourage sales of goods on credit in the intemational trade. @ Glass Plate Insurance: The glass plate insurance policy covers accidental damage to glass plates, windows, doors and shelves. It guarantees to cover for the replacement of plate ~glasé windows in the event of damage, e.g. Etiebet’s Place (which is a glass house) on Mobolaji Bank Anthony Way in Ikeja, Lagos. Agricultural Insurance: Agricultural insurance isthe type of insurance which provides relief to 1 farmers for losses suffered on theireropent yA result of drought, pest and diseases, Burglary, Theft and Robbery: The policy provides compensation for losses which may arise (rom goodstosproperty stolen or damaged through breaking into a shop or business Premises. An individual can also take this policy ‘Against the risk of losing his house property (0 thieves. Asa matter of necessity, it must be Proved that thieves have actually broken into the house and carted away the property under consideration. Consequential Loss Insurance: Conse- quential loss policy covers losses to commercial firmsaftera fire incident, resulting in intemuption of business activities and stoppage of Production. It covers loss of profit arising from the stoppage of the production processes. Contractor all Risk: The contractor all risk provides for contractors in the event of any damage being done to the construction work froma wide range of perils. The risk is that the Project may sustain severe damage and this would delay the completion of the project. Employers Liability Insurance: The intention ofemployer liability insurance policy is to ensure that the employer does not suffer financially but is compensated for any moncy he may have to pay in respect of a claim to provide compensation if any employee was injured or killed This policy provides cover for employers in the event of liability to employees arising from industrial fatality, disease or injury. Itgives the employees some protection. Aviation Insurance: All risks associated with 224—=— the use of aircraft as a means of transport are covered by the aviation insurance policy. The component parts and complete jumbo jets are all insured in the aviation insurance market. The buyers are large commercial airlines, aircraft ‘users and private owners. The policy also covers the aircraft and the liabilities to passengers. Accident Insurance: Accident policy guarantees the payment of compensation inthe ‘event of an accident, causing death or injury. It ‘covers protection for death or injury arising accidental, violent, external and visible means. Itean cover personal accident and sickness. Motor Vehicle Insurance: The motor vehicle insurance policy provides for liability for death ot bodily injury to any person arising from the use of vehicles on the road. Compensation will be paid to victims injured in road accidents, i<-» injury to the body. 7 The insurance companies base their premiums on the types of cover provided, the ‘ize, value ofthe vehicle etc. Most drivers bave either third party insurance, third party fireand theftand| ive policies. (a) The Third Party Fire and Theft: In addition to the cover already stated above it covers damages tothe vehicle asa result of fire and theft. The policy holder will be compensated in the event of losses suffered from fire and theft of the vehicle. Comprehensive Insurance: This covers the driver, the insured vehicle, third parties and sometimes the contents ofthe insured vehicle. It covers virtually all accidental damages to the insured vehicle and losses arising from fire or theft. The comprehensive policy attracts highpremiums. o) 23,7 MARINE INSURANCE ‘Marine insurance isa branch of insurance wi covers losses or ibis elasing 9 ped their cargoes against the iB of pasa This is probably we oldest (orm of insurance, Te perils ofthese storm, tempest, collision, theftand i Gneurance policy is comPUlson, Marine Insurance Policy: hooves: inst risk associated With seq @ ‘The ship owner can insure his ship againg Joss. as 2 result offre, storm or collision @ The cargo can also Be insured. @) ‘The ship owner can insure a ship for one voyage or fora specified period oftime, Types of Marine Insurance Marine insurance risks may be classified under the following: 1. Hull Insurance: This isa policy which covers the ship against damages which may result from the perils of the sea. The policy can be taken to cover the hulllof the ship against damages by storm, collision and fire. It may be for a specific time or journey. Cargo Insurance: This policy is entered into to cover goods or cargoes carried by a ship. It is taken to covet oss arising from damage to cargo whik in transit, Cargo insurance is vey important in foreign trade and it must stated whether the importer or export will be responsible for the insurance? 225the cargo. Iisa valued policy based on the value stated on the invoice, employees are liable for negligence ‘in handling of goods, injury to crew on. board, damage to other ships orto ports, s. The liabilities include the cargo, Passengers, crew members, fixed installations at wharves and beaches 6, liable to be damaged by the action of theship. Freight Insurance: This isa type of Policy taken to cover against refusal to Pay charges for lifting the goods. The shipp~- Sums psd outin freight ifthe cargo was lost in transit by i t efore reaching its destination, Types of Marine Insurance Policies L Time Pe > for @ specific period, rethe policy expires acontinustion clause This policy covers a or specific voyage, e.g. o Amsterdam. The ship will be to cover a journey from one of cargo. The cover applies to any shipment made by the holder who makes a declaration as to the precise amount involved with individual shipments. This declaration is set against the floating 226 covers himselfagainst loss for 7, is policy covers the 8. I the ship arrives at its 9. pohecichcing coun eset ae | amount until the full sum insured is exhausted. Mixed Policy: This policy covers the subject matter for the voyage and a period of time thereafter, e.g. while in . Construction Policy: This policy ‘covers the construction of a marine ‘Vessel. Open Cover Policy: This relates toan i agreementby amarine insurer to accept | insurance on proposed shipment. lisa form of insurance in which the insurer | ‘agrees to insure all shipments of cargo made during an agreed period. | Valued Policy: The valued policy Specifies the value of the goods, and the holder of sucha policy receives specified sum in the event of a total loss, irrespective of its value at the time of the loss. Unvalued Policy: This provides for claims based on the value of the goods atthe time of loss. The policy does not State the original value of good: Fleet Policy: This is e polic Covers a fleet of ships under one ownership. Marine Losses: Marine losses can be categorised into total loss and partial loss. Total Loss: This occurs where matter (goods) is completely destroyed. ‘Total loss can be = @ edivided into: Actual Total Loss: This is a type of loss which occurs when the goods are completely destroyed by fire, when a ship sinks after collision or when the goods have been affected by sea water such that they are no more fit for theow te k p / Purpose intended, Constructive Total Loss: This occurs where the objects insured have to be abandoned because what is left is beyond economic repairs, i.c., the cost of repair is more than the value. 0) Partial Loss: This occurs when there is damage toa portion of the ship or its, oh canbe categorised into: (a) General Average Loss: This is a partial loss which occurs when the ship master, for the interest of the parties, deliberately and reasonably throws overboard or jettisons some of the cargoes in order to lighten the ship so as to reduce loss. The expenses will be bome by all parties concerned, €.g. . during storm, some ofa ship's cargocan de jettisoned. Particular Average Loss: This occurs when the cargo or ship suffers partial loss or damage. The loss here is accidental. It occurs when loss which is accidental isnot suffered for the general benefit of all on board a vessel, ¢.g. collision between ships or when the propeller blade is damaged. In this case, loss is borne by the owners of the object affected. 0) 23.8 LIFEASSURANCE Life Assurance is one important branch of insurance which is taken asa protection against oss caused by the death of a person. This policy covers human beings and not properties. The risk covered here will inevitably occur but the time of occurrence is what is not known. Ifthe life assured was suffering froma serious illness at the time of taking outa policy 7 unknown to the assurance company, the latte, There are four main types Of lite assurance, namely: Term assurance, Whole if, assurance, Endowment assurance and ATnuitig, “The Main Types of Life Assurance 1 Term Assurance: This is the oldex, form of assurance policy. In this policy, payment will be made to the assurer if the life assured dies withinthe specified period. We have different types of term assurance. These are: decreasing term, convertible term and family income benefit assurance. tis the cheapest form of assurance. . 2. Whole Life Assurance: This type of life assurance will ast for the life time of the life assured, and the sum assured is payable only at death: The assured will pay premium throughout the duration of hislife. Endowment Policy: This isa type of policy which provides for the sum assured to be paid either after a fixed number of years or at death, depending ‘on which one occurs first. Endowment assurance isa convenientand profitable way of preparing to meet some future financial commitment such as old age. Annuities: This isa form of pension in which an insurance company. in retum for a certain sum of money (paid ina lump sum orby instalments), agrees to repay this money plus the investment income that it is able to earn over the expected life time of the investor or for a specified period. Reasons for Taking Life Assurance 1 Lump Sumon Retirement: The life 227assurance Policy provides for a lump sum of money on retirement, and it isa means of saving for the future. Provides for Permanent Disability: forpermanent disability, 2. assurance policy can be used as a collateral security to obtain loan from banks, Source of Loan Repayment: In the event of death, it can provide for loan repayment. Provides for Dependant: Life assurance policy provides for one’s dependant inthe: veal of death. i Provision for Repayment: ‘of Capital: Itmakes provision for the repayment of capital on the death ofa partner. Provision for Old Age: This can be used as a way. of providing for old: age. 23.9 FIRE INSURANCE Fire Insurance is a type of insurance which provides cover for loss or damage caused by buming. A person can insure himself or property againstany loss as aresultof fire lighting, wiring, lightning and explosion. It covers all risks associated with fire. However, the insurer can only be compensated ifthe fault was not caused by him. The compensation covers possible damages to buildings, factories, goods and shops, although the structure of the building and some inflammable items keptinside will betaken into consideration. Fire insurance may be taken with average or without average clause. Fire Insurance With Average Clause: Ifthe fire insurance policy contains “average clause,” the compensation will be based on the actual Serves as Collatera) Security: Life- value of the building, the amount for which it was insured and the total loss suffered. The compensation would be calculated thus: Value of the Property Insured amount: Actual value: Actual loss: 410,000 430,000" 15,000 30, 000 #5000 Fire Insurance Without Average Clause: Under fire insurance without: clause, the insurance company will only be liable for the estimated amount of the loss. Take for instance, if the property is 25,000 and the insured ‘amount is 413,000 and the loss is assumed to be 10,000, the insured will only receive #410,000 as compensation. Difference between Contribution and Group Insurance Contribution, oup Insurance, . | Wt deals with the prin- | Ideals with types of ciples of insurance. _| Insurance. is insured with many insurers, ‘Many people or a group of employees takea_single policy. "The insurance company is liable to everyone covered by the single policy. company involved willbe liable for only & proportion of the liability. 23.18 UNDERWRITING AND RE-INSURANCE Underwriting: This is the process whereby a merchant of insurance company undertakes 10 228cover. underwrite a portion of'a risk or assume ‘pattofa risk. Thisis common in marine insurance ‘Decause of the enormous cost involved which cannot be bome by one insurance company. Underwriter: This is a marine insurer who offers to cover, underwrite or assume a portion ofa risk. The underwriter would write under the details of the risk, his name and the proportion he has accepted. A common example is the Lloyds Underwriters. an association of London underwriters incorporated in 1871 by Edward Lloyd. They are organised in syndicates that undertake @ fraction of the risks brought to them by the agestt ofthe shippers. Lloyds Underwriters is noi 2 ‘corporation, but it provides facilities to memb / © tg'vansact business andit isnot responsible for losses incurred by the underwriters. Reinsurance: This isa situation wh insurer agrees ta insure with ano! company all 0° part of the risk. By lange risk arno losses will be large vessel will de claim, The insurance company can tl reduce its pote: other compa: liable for the loss. Rein: risk from one insur additional security to the insured and all ot Presently, a wery large international ms has developed and m companies specialise in accepting the transfe of this risk. In Nigeria, the companies are Nigeria Reinsurance, African Reinsurance, Continental Reinsurance, etc. y 229 23.11 THE MIDDLEMEN OR INTERMEDIARIES “Theintermediaries in he insurance industry cay be classified as insurance agents Insurance Agents: An % somebody who isemployed by the principal bring him intoa: insurance agent is ‘contractual relationship withthe third party, Insurance agents act on behalfof insurance ‘companies on part-time of full-tirne basis. Part Time Agent: This isan agent wniob gs, th » insured to the insurer. The agents th peiom, ‘ jon usually isa sidesine. 7 i people: seeking insurance. These agents are not employedby the insurance company on full time basis; they are normally given’ commission. ‘commission and partly by salary. Full nts are staff of the company who go canvassing for the insurers. ehalfof the ceils, best type of coveh procedures. Abbroker normally obtains commission called brokerage from the insurer. He if independent of the insurer.Differences between Agents and Brokers foe Brokers are fulltime __ professionals. 2 2 They can be sued They cannot b {for professional forneplgence Br They are remunerated | They are remuneraed with higher lower with commission, commission. Roles of Insurance Brokers and Agents Lh ‘They link the insurer with the third party, ie. buyer, misconduct }f They are experssin | They do not profew insurance business. | 0 be experts 2. They give advice and professional assistance to the buyer in arranging insurance policy. 3. They can also handle claims procedure for the client. 23.12: IMPORTANCE OF INSURANCE 1. It Facilitates International Trade: Insurance stimulates and facilitates international trade. This is because marine policy provides cover for cargoes and vessels. The export credit guarantee also guarantees credit sales. 2 Offers Investment Opportunities: Insurance makes funds available for investment. A large proportion of this resources are invested in the capital market where businessmen can obtain loan. This helps in developing the ‘ country’s economy. 3. Leads to Risk Reduction: Insurance helps to reduce or control loss or liabilities of a businessman. It spreads the financial losses of the insured. 4. Provision of Security: Insurance provides security to commerciay activities. Some small enterprises would have collapsed as a result of major losses, but insurance always takes care of such uncertainty. 5. Provides a Means of Saving: Insurance provides a means of saving regularly which will help to provide for the future, c.g. endowment policy. MServes as Collateral Security: Life assurance policy can be used as a collateral security to obtain loan from the bank for business investment. 2 It Helps in Motiv: jing Workers: Through group insurance policy, the workers are fully aware of a secured future, hence they will work harder which will bring about higher productivity. 8. Provision for Old Age and Disability: * Life assurance can be used as a way of Providing for old age and to make provision for permanent disability. 23.13 PROCEDURES OF INSURANCE CONTRACT ‘The insured will make an inquiry through his agent to the insurance company. After due consultation, he will obtain a proposal form. ‘The form will be filled andall relevantinformation relating to the insured must be truthfully stated and signed by the insured. Consideration in the form of premiura will be paid to the insurance company ona weekly, monthly or yearly basis, depending on the agreement. The insurance company will then issue outa temporary cover called, cover note which gives him atemporary cover while itis being processed, After processing, the insurer will issue out an insurance policy to the insured. This policy will give detailed terms of the insurance 230contract and make the insurer liable for losses of liabilities incurred as a result of the occurrence | ofrisk insured against, t 23.14 TERMS FREQUENTLY USED IN ' INSURANCE INDUSTRY i Actuary: This is a person involved in life } assurance, assessing the risks and calculating the premium and handling matters connected 6 with pension funds. 7 Proposal Form: a form that must be f completed by a person wishing to enter into an insurance contract. He must disclose all relevant f information truthfully in the form. Cover Note: This is a temporary insurance : cover to enable the insured to enjoy the benefits ofa policy while itis being processed. «Insurance Policy: This is a document which sets out the exact terms of the insurance contract. Premium: This is the payment made to an insurance company for an insurance policy. " ——Itcan be paid annually, weekly or monthly, € depending on the agreement. ‘Surrender Value: This is the amount in cash / an assurance company will repay to an | endowment policy holder if he wishes to discontinue prior to the date of maturity. It depends on the premium paid. Insurer: This is the insurance company who undertakes to indemnify another against a Specified loss insured against. Insured: This is the person who has insurable interest in the subject matter of the policy. He Pays premium to the insurer. Jettison: This occurs when a ship master, for the interest of the parties, deliberately and Feasonably throws overboard some of the Cargoes in order to lighten the ship. Brown Card: This is a kind of insurance card in which a motorist wishing to vist» coun within the West African sub region iS €xpecteg to carry with him to cover third party liability, Barratry: This refers toany sotcone nitted by the captain ofa ship that is: of the ship owners. REVISION QUESTIONS ; 1. (@)Whatis meant by the term insurable when an insured may not be indernnified (SSCE Nov., 1989). 2. Write short notes on each of the following: (a) Marine insurance (b) Accident insurance (¢) Group insurance (d) Export credit guarantee (e) Fire insurance (June SSCE, 1996), a (a)Give five reasons why a life insurance policy may be taken. (b) Describe any five insurance policies which a large department shop owner may take (SSCE June, 1997). 4. (@)Explain four insurance policies ship ‘owner can take, (b) Distinguish between indemnity and non-indemmnity insurance (SSCE June, 2000). 5. Explain with examples, the following insurance| : (a) Indemnity (b) Utmost good faith (c) Insurable interest (d) Proximate cause (NECO June, 2000). 6. (a)Define actuary. (b) State the differences between contribution and Broup insurance, (c) Mention and explain three types of risks insurable_n marine insurance (SSCE June, 1998). 7. (a) Explain uninsurablerisksand list two + types of such risks [4 marks] (b) Write short notes on the following: (i) Hull insurance (i) Fidelity guarantee insurance (iii) Underwriter (iv) Insurance Premium 231ERASSCE Dang, 200}, (a) EXIT aed OF the tatlow ing SEENEIEMT ( conseguen {Wanverneee(h) Sortourehe he of Insurance to a Dusinessman {WASSUE June, 2002), Dastnguush tenween the filtowing pairs ofserms usad in insurance: ta) Thint party and comprehensive Policy ()) Whale life and endowment policy (ce) lnsurance and assurance (@) Premium and compensation 232 + QWASSCE June, 2003), “lh. Kxplain the following terms used in insurance; (a) surrender value (b) cover note (c) policy (d) reinsurance {e) group insurance (WASSCE June, 2005). 1 (a) What is non-indemnity: irtsurance? (0) List and explain three types of life Assurance policies, (c) Explain the tenn Surrender Value (WASSCE June, 2008).24. BANKING SYSTEMS 24.1 PERFORMANCE OBJECTIVES Atthe end of this chapter, students should be ableto: (Q) State the meaning ofa bank. Q Explain the origin ofbanking. |) Statethe types ofbanks. | (4) Explain the meaning and functions of » ‘commercial banks. || ©) _List and explain the types of bank | account, State the meaning and types of cheques. (7) Explain the various forms of payment. 24.2 MEANING OF BANK | (6) Bank isa commercial institution which performs various financial activities, e.g. accepting and handling of deposits of its customers. Iisa body of persons who carry on the business of banking. Banks are instinutions that create money and give out loans to people. In a summary, a bank is a place where money and other valuables like will, jewellery etc. are kept. 243 ORIGINOF BANKING Banking had its origin with the goldsmiths in London in the seventeenth century. The goldsmith had facilities for storing valuables, therefore, they accepted money and other valuables from merchants for safekeeping. i ‘The first banking fiunction was accepting, deposits of cash from merchants who had no safe place to keep their money. The goldsmith at first demanded a charge for looking after their money. The second stage came when receipts for these deposits began to be used as means wea te of paymentby merchants. This made Ws catly bankers to issue bank notes er _ denominations which were MOre BI The next stage in the development of the banking system was the development of money lending to customers with a reat charged on it. This provided a pron te business, hence bankers began t0 offer Inc ning te more sophisticated systems o industry. 244 TYPES OF BANKS Commercial Bank Central Bank Merchant Bank Savings Bank Development Bank Agricultural Bank 245 COMMERCIAL BANKS Syaene accept deposits and other valuables from the public for safekeeping with the sole aim of making profit. They are owned by private individuals, institutions or governments. Commercial banks are limited liability companies. Some examples of Commercial Banks in Nigeria are United Bank for Africa (UBA) Plc, Union Bank of Nigeria (UBN) Plc, Guaranty Trust Bank Plc, Diamond Bank of Nigeria Plc, First Bank of Nigeria Plc, Zenith 233