The table below shows the direct premium income of non-life insurance business for Nigeria in a particular year. Use the data to answer the questions that f...
Question 1 Report
The table below shows the direct premium income of non-life insurance business for Nigeria in a particular year. Use the data to answer the questions that follow:
| Type | Value in Naira | Percentage value |
| Fire | 24,532,000 | 12.1 |
| Accident | 13,770,000 | 6.8 |
| Motor | 94,442,000 | ? |
| Marine | 49,536,000 | 24.5 |
| Miscellaneous | 20,040,000 | ? |
| Total | 202,320,000 | 100 |
(a) Calculate the missing percentages for motor and miscellaneous premium incomes.
(b) (i) Construct a percentage bar graph to illustrate the above statistics.
(ii) State two disadvantages of a percentage bar graph.
(c) Suggest an alternative method of representing the statistics.
Answer Details
(a) Calculation of the missing percentages
Percentage premium income = \(\dfrac{\text{premium income}}{\text{total premium income}}\times100\).
Motor:
\[\frac{94,442,000}{202,320,000}\times100=46.678\ldots\%\approx \boxed{46.7\%}\]
Miscellaneous:
\[\frac{20,040,000}{202,320,000}\times100=9.904\ldots\%\approx \boxed{9.9\%}\]
| Type of insurance | Premium income (₦) | Percentage (%) |
|---|---|---|
| Fire | 24,532,000 | 12.1 |
| Accident | 13,770,000 | 6.8 |
| Motor | 94,442,000 | 46.7 |
| Marine | 49,536,000 | 24.5 |
| Miscellaneous | 20,040,000 | 9.9 |
| Total | 202,320,000 | 100.0 |
Check: \(12.1+6.8+46.7+24.5+9.9=100.0\%\).
(b)(i) Percentage bar graph
The bar represents the whole premium income, that is, \(100\%\). Its sections show the percentage contribution of each class of non-life insurance.
(b)(ii) Disadvantages of a percentage bar graph
- It shows the relative percentages only; the actual premium incomes in naira cannot be read directly from the graph.
- Very small component parts are difficult to draw, measure and compare accurately.
(c) Alternative method
A pie chart (divided circle) can be used to represent the statistics.
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