The risk involved many be against human life or material possession. Insurance is one of the social science which essentially is designed for risk taking. This process of risk taking entails the pooling together of the resources of many individuals in order word, insurance is the management of a pool of risk whereby, the fortunate members of a group assist the unfortunate few who suffer losses.

 Adeyemo (1999:12) defined insurance as a social and economic device which provides financial compensation against the effects of any misfortune. This compensation is made from the accumulated contributions of all parties taking part in the insurance scheme. Apart from covering industrials insurance also protects corporate bodies and other business organization from varieties of hazards like burglary, workman compensation ideminity, goods – in – transit, public liability  etc.

Investment refers to that part of a person’s income or firm’s income that is immediately put to use for a certain return of additional income.

The investment of insurance funds in Nigeria is regulated by the insurance decree of 1976 under section 18. the substantial funds held by insures are invested as a funds held by insueres are invested as to earn interest on capital gains. Insurance companies provide funds for investment through the premium they collect from their numerous policy holder. Life insurance companies for instance, invest funds that flow to them from many policy holders thus, becoming important sourc of capital funds for the Nigerian economy. Insurance companies help to provide the state with a steady flow of investment funds which are essential to the community.
The investment of insurance funds helps to contribute profits to the national purse and also provide labour for the working population in a given area. In the investment of insurance funds, the overall aim is to be able to meet liabilities when they fall due, while earning to the highest possible yield without incurring great risk too. In non-life insurance, the major problem for an insurer is the unexpectedly large claims which might force him to sell its investment at long notice, possibly at a loss. As a result of this, insurers therefore, concentrate on investment which can be sold at short notice, such include shares and stocks and avoid those that cannot be sold at short notice.

In life assurance, the safety of the funds as well as very high yields, are of paramount importance because of long-term nature of their liabilities. Long-term investment are useful to life assures.

1.0              BACKGROUND OF THE STUDY

Hallmark Assurance Nigeria company started business as one of the insurance companies on 15th July 1969.The company has since been rendering excellent services to the nation and to the world a large.     

  During their Annual general meeting which was held in 1993, Hallmark was merged with a sister company, it now become a composite company and transacts both classes of insurance namely: life and non-life.

The company had earlier become a public liability company following its admission into the Nigeria stock exchange. This was as a result of completion of the privation exercie carries out in the company by the east while Technical committee on privatization and commercialization (TCPC) now Bureau for public Enterprises (BPE).

The authorized share cap-ital is N400 million while the issued and fully paid up capital is N337 million, making Hallmark as one of the highest capitalized companies in Nigeria.
With a total base of N1.5 billion, gross premium income of N1.02 billion, claims settled N346.2 milion for the past four years. It is by all account a leading company in Nigeria.

1.1 STATEMENT OF THE PROBLEMS

 Before proceeding in this study, there is the need to have already focused statement of the problem. In specific terms, the statement of the problem is the key to the design of the research.
 Some of the problems of insurance industry include:

1.      There is the problem of bad debt regarding the non-payment of premium.

2.      In most cases, there is lack of funds to invest due to poor business.

3.      Most instruments which insurance companies requires for an investment are not available to them.

4.      Most insurance companies desire to invest in readily marketable securities but are not easy come by.

1.2 OBJECTIVE OF STUDY

This research paper is aimed amongst others to identifying the various to which these funds are invested as well as the effects of such investments in the Nigerian economiy: thus, a comprehensive appraisal of the investment of insurance funds in nigeri. To achieve this aims, two insurance companies – Hallmark Assurance Nig. Plc. And Jubilee insurance company Ltd. Have been chosen for an indebt study