University of Khartoum

An Evaluation of Insurance Business Practices in the Sudan for the Period (1980-2004)

An Evaluation of Insurance Business Practices in the Sudan for the Period (1980-2004)

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Title: An Evaluation of Insurance Business Practices in the Sudan for the Period (1980-2004)
Author: Ali El-Atta Mohammed, Omer
Abstract: Insurance business was practiced in Sudan since 1920 by foreign agencies and companies aiming at covering aliens properties. In 1970, it was Sudanized and foreign companies were prohibited from operating. Consequently more national insurance companies entered the insurance market. In 1992, insurance business was Islamized and put under the Supervision of Insurance Supervisory Authority instead of being controlled by the insurance department at the Ministry of Finance since 1960 . This Research has explained the growth rates of the premiums, claims, reinsurance premiums and investment of insurance surplus funds. As well as their impacts on insurance coverage and awareness. However, this study reveals that there is a linear relationship between the premiums and claims and it is invariably positive. The study verifies the main sources of premiums inflows and the main recipients of the claims, as well as their market shares. They successively include: Motor insurance , Fire + Burglary, Marine, Aviation, Engineering + Energy and Agriculture + Livestock. However, the study proved that Motor insurance brought the highest share of premiums and took the highest share of claims in the Sudanese insurance market. While the market share of Agriculture + livestock is the lowest in both premiums and claims. Also, this study explains the main channels of investment in insurance market and determines their market shares. They successively include: deposits, land and real estate, stock and shares, Shahama Certificates and loans. It is noticed that most of investment funds were injected in deposits due to the low risks involved. While investment in loans is avoided because loans carry interest . On the other hand, this study compared the conventional and Islamic insurance practices in Sudan during 1980-2004, in terms of growth of premiums and claims and contribution to GDP. It concluded that Islamic insurance was the best. But this conclusion may not hold true due to the following: 1. The two practices were not existing simultaneously until the year 2004. 2. Increment of insurance awareness during Islamic period. 3. Expansion of Sudan economy and insurance market. Meanwhile, the study indicates that Islamic Insurance Company is the pioneer in the whole sense . This study followed an analytical approach of data through tables, graphical illustration and ratios. The results disclose that insurance industry in Sudan is still infant due to the lack of capital, qualified personnel, awareness and lack of coverage of agriculture and livestock. Based on the above findings, the Research recommends: 1. Comprehensive training. 2. Including insurance in the curricula of all the Sudanese Universities besides establishing Insurance Institutes in order to graduate matured students. 3. Linking the license of productive units with obtaining insurance coverage. 4. Promoting Agricultural and Livestock coverage by introducing compulsory insurance. 5. Liberalizing insurance sector in order to face globalization challenges, and strengthening the financial situations of insurance companies through merger. 6. Improvement of safety measures in factories, roads and other economic activities so as to reduce risks
Description: 147 page
URI: http://khartoumspace.uofk.edu/handle/123456789/13333
Date: 2015-06-16


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