An invesigation of the contribrution

Over the years, thither confine been many expositions of indemnity notwithstanding the most accepted definition is that given by ALAN WILLET in 1901. He defined indemnification As the accumulation of re serve ups for the purpose of contingencies. Thus it is a cable activity w here(predicate)in round people or parties who be subject to indisputable find pay monthly or yearly grant to an damages company to counterchange the burden of such put on the lines.Insurance as sound may be defined as a contract whereby a person c aloneed the insurer or the assure agrees in experienceation of m unityy paid to him called the premium by another person called the insured or assured to even off the latter against privationes resulting to him on the happening of certain matters. J. O. Rusk (1991). The personal credit line of redress initially had a connection with ships and cargoes achieving a spread of adventure.This job dates back to as early as BBC (carter, 1991) when the Babylonians developed a system of rules of loans on maritime ventures whereby the loans were not repayable in the event of the expiry of the venture, to the emergence of modern insurance development which owes its credence to neat Britain, though insurance Ewing introduced into Britain by the Lombard in the 14th and 1 fifth centuries (Cooker, 2002). Insurance is an intangible service paid for and received at a future date.The technicality of insurance makes it obvious for uneven incidence of risks when in that respect be infinite numbers of identical risks. It is also a risk transfer mechanism which provides enormous benefits to the individual/ agreements (both profit and non- profit), government and socio-economy at large. Every individual or transcription is faced with the likelihood of a acquittance, injury, destruction of life or properties hence, it is asserted that Risk is concomitant of life (Chipolata 2006). In other words, risk is unavoidable.Since It is a form of risk charge in the main used to hedge against the risk of a contingent, uncertain expiration, it is wherefore because of the liability of an organization to predict the future that insurance is purchased. 1. 2 exposition OF RISK The term risk is a simple notion which hack across a laymans definition to the technicalities of barter practices. When someone states that in that location is risk in a particular situation or context, be it business or an event, the ordinary listener understands what it means on the face of it. What hence is Risk?This question jackpot easily be answered by adopting a generally accepted definition of Risk by a illustrious scholar, Dry Matthias G. Healer. He defines it as the possibility that positive expectation of a goal-oriented system will not be achieved ( uncertainness) and this will be receivable to each certain human or inhuman factors. Further much, risk refers to the uncertainty that surrounds future events and its forth arranges. It h as an expression which looks again at likelihood and touch of an event with the potential to influence the achievement of organizations objectives.When risk is said to exist, there is also the likelihood that expected results may not match those results hoped for I. E. A deviation. gum benjamin Franklin in his book observed that in this world no social occasion fag be said to be certain, except death and taxes. Yet there is some uncertainty about those two phenomena no one can be sure when he/she will die, and tax rules and rates are frequently changed. In fact, the whole of life is surrounded by uncertainty. In some situation uncertainties are within the control of individuals or firm, others are part of the environment in which our lives operate.How ever so, the word risk used here changes. Insurance is an unsought good and the uncertainty in future events is what is universe insured. Insurers profitability in any portfolio depends largely on the frequency, the severity of its impact and its final results (uncertainty). Uncertainty is not merely a dimension of threats, hazards and risks exactly opportunities which if anticipated may result in a reward. The risk is the thing which is insured, the insured peril, the expected claims cost for any given policy, or as a general term for unwanted and uncertain future events. 1. 3 RISK MANAGEMENT AND INSURANCEOrganizations had long practiced various parts of what has come to be called risk management. Risk management is attempting to identify and manage the threats that could mischievously impact or bring down an organization. The management of risk is a fundamental aspect of entrepreneurial activity. Entrepreneurs manage the risk of accidental loss by weighing the costs and benefits of each alternative. In a coordinate risk management process, this involves 1. Identify and analyze the loss delineation. 2. Formulate alternatives to transaction with such exposure 3. Select the apparent best techniques to treat exposure .Implement the decisions made 5. Monitor the feelingiveness of the decisions implemented. Those who do not apply a structured process still make decisions about risk, although sometimes by default rather than design. For industrial or commercial firm, the objective of risk management may be to maximize profits, or to increase revenue, exonerate worth or perhaps market share over some period, or to achieve a combination of several objectives, or still to stay in business. Managing a multitude of internal and external risks is one of the most significant challenges facing organization set up today.Insurance serves a number of valuable functions that are largely distinct from other types of pecuniary intermediaries. In prepare to highlight specifically the unique attributes of insurance, it is worth counselling on those services that are not provided by other financial services providers, excluding for instance the contractual savings features of whole or normal life products. The indemnification and risk pooling properties of insurance facilitate commercial transactions and the provision of credit by mitigating losses as well as the measurement and management of non diversifier risk more generally.Typically insurance contracts involve clarified periodic payments in relent for protection against uncertain, but potentially unsafe losses. Among other things, this income smoothing effect helps to avoid excessive and costly bankruptcies and facilitates lending to businesses. The mise en scene of an economys insurance market affects both the range of available alternatives and the quality of teaching to support decisions. For example, a manufacturer might produce only for the topical anesthetic market, forgoing more lucrative opportunities in distant markets in order to avoid the risk of losing goods in shipment.Transport insurance can mitigate this loss exposure and enable the manufacturer to expand. Similarly, to avoid the risk of total loss from drought, a commercial farmer may keep half of his seed in reserve. 1. 4 INSURANCE CONTRIBUTION TO AN ORGANIZATION Insurance by dint of effective risk management contribute specialized expertise in the identification and measurement of risk. This expertise enables them to accept carefully specified risks at lower prices than non-specialists. They also have an incentive to collect and analyze discipline about loss exposures, since the more precisely they measure the cost of risk, the more they can expand.Over the years, the realization of risk management with the help of insurance has contributed tremendously in achieving organizational goals severally. For instance, 0 It guarantees as far as possible, that the organization will not be prevented from pursuing its other goals as a result of losses associated with pure risks. 0 It contributes to profit by overbearing the cost of risk for the organization 0 It can also trend expenses by dint of risk control measures (insuran ce) and as such increasing income.As a result, the insurance market generates price signals not only to manufacturing sector but to the entire economy, helping to allocate resources to more productive uses. Insurers also have an incentive to control losses, which is a significant social benefit. Most fundamentally, the approachability of insurance enables risk averse individuals, entrepreneurs and organizations to initiate higher risk, higher return activities than they would do in the absence of insurance, promoting higher productivity and growth. . 5 difficulty ANALYSIS All manufacturing companies are set up with a simple objective to produce goods that meet the needs of their customers and also to maximize profit. In the process of manufacturing goods the company is often undecided to varying and diverse risk(s) which affects all the factors of action. In as much as these factors are exposed, the logical end is that the income of the company is threatened.Human lives are e xposed to industrial injuries which sometimes end up in death, permanent or temporary disability, properties could be destroyed through fire out break or explosions, and liabilities could be incurred arising from the consumption of the product. When slight emphasis is placed on these loss exposures, it will definitely put up to the demise of the company. This project therefore, will look at the effect of insurance in manufacturing sector and also whether manufacturing companies who place major significant on insurance are successful in their total business struggle all other things being equal. . 5 PURPOSE OF STUDY As earlier mentioned, the aim of any manufacturing company is to maximize profit and batten down customer satisfaction. It is quiet obvious that in carrying out production the organization is exposed to so many risks. This study is focused on the effect of insurance in manufacturing these products, in essence, how risks that could not be voided, minimized, reduced or retained can be transferred to insurance companies while the organization focuses its worry to its real business. Our study seeks 1. To find out how risks/ loss exposures has been managed in banana tree breweries 2.To examine the effect of insurance in the development of the organization (banana tree Breweries) as a case study 3. To examine risks that they have managed by representation of transfer to insurance and how adequate are the various insurance covers. 4. To consider the extent to which insurance has contributed to the attainment of the corporate goals of banana tree Breweries 5. To make policy recommendations on how insurance will suffice to further develop Banana Breweries, GAMBLE, and The Gambia. 1. 6 RELEVANT RESEARCH QUESTIONS The research exercise is set out to answer the following questions 1 .What is the level of insurance awareness in the manufacturing sector of The Gambia 2. Does insurance enhance corporate development 3. Has your company ever sustained any unu sual, large or unique losses either insured or uninsured 4. Is insurance an effective risk transfer mechanism. Due to time and other constraints, the researchers had to narrow the scope of their duty to Banana Breweries co. Ltd and Gamble in The Gambia. The study shall focus on the effect of insurance in the above listed companies as well as its benefits.It will assist the company to continue appreciating the role that insurance plays in their activities, and also serve as a means of reviewing improvement measures in place which hopefully will bring about uncovered areas of loss exposures to their operations. 1. 9 import OF STUDY All manufacturing companies exist to ensure that the shareholders maximize their wealth. Companies therefore undertake economic activities for profit. However, in heir pursuit of this venture all the factors of production are exposed to one risk or the other.Those study is primarily laying emphasis on the essence of insurance which will importantly aid the manufacturing concern to achieve their broad objectives, through a well coordinated and scientific measurement and assessment of the various risks that the manufacturing company is exposed to. The study will assist the company to continue appreciating the role that insurance plays in their activities, serve as a review of existing measures in place and hope to bring out uncovered areas of risks to their operation.