1.0 Chapter one

Introduction

1.1 Background to the study

According to Asenuga (2018) As much as their situations and operational settings evolve, so do individual and business insurance requirements. Insurance companies so regularly develop products in a number of ways to satisfy a range of purposes. There are numerous types of insurance, including life and non-life, long-term and general, traditional and modern, etc. The development of insurance in Nigeria can be attributed to European traders' trade activity along the coast of West Africa. There were two things that affected this. First, the growth in economic activity in the 1890s and the increase of the production of cash crops for export. The British also want to safeguard their assets and interests in the protectorate of West Africa.

.According to Uche and Chikeleze (2016)growing banking and shipping activities in Nigeria as a result of growing trade quickly forced multinational companies to manage some of their risks locally. In Nigeria, a branch of the royal exchange assurance was established in 1921, marking the beginning of the insurance industry as we know it today.

Both the domestic economy and international trade place a premium on insurance. Cashflows from insurance premium payments provide money for economic investment. According to Uche and Chikeleze (2016), insurance patronage has made a significant contribution to the world economy. The insurance sector supports and fosters development by providing financial stability to people and businesses. The majority of major initiatives started in the nation today are made possible by the availability of insurance coverage. Furthermore, the guarantee of compensation in the event of a loss offers security and peace of mind so that management time may be dedicated to fruitful endeavours without which there cannot be any significant advancement.

The patronage of Insurance products is yet to become appreciated in Nigeria, and the services that emanated there from are tagged "unsought products' this has led to the low level of awerness of insurance products in Nigeria (Gbede, 2013). The unsought products, according to Kotler and Armstrong (2018) are goods that consumers either are unaware of or are aware of yet do not often consider purchasing. Insurance products, meanwhile, is a highly respected global indicator of the level of complexity and maturity of a certain industrialised economy. In the United States of America, the average premium paid to Insurance companies is 6% of expendable cash

There is a global problem  with awareness of insurance services. But this is particularly true in developing nations, where poverty is more pervasive and average citizen education levels are lower, making it harder for people to understand the numerous insurance contract clauses which has negatively affect the patronage of these insurance products. Furthermore, the extremely complex form of the insurance policy itself does not assist the situation.. The severe lack of skilled and knowledgeable professional insurance and reinsurance staff makes this situation even worse. Individual policy holders continue to be perplexed by the fine language in the policy paperwork as a result. The issue of religious views also tend to affect the awareness and the attitude of Nigerian towards the patronage of Insurance products. Some religious groups believe that because life is what you make of it, there is no need for insurance..

However, empirical studies on awareness of insurance services on the one hand, and patronage of insurance services with the challenges on the other hand, in Nigeria, are inadequate. There is the need to fill this vacuum, and to develop appropriate strategies for the insurance industry that will help to change, gradually, the present, apparent consumer negative perception of insurance services to a positive one .It was, therefore the primary purpose of this study to assess  Level Of Insurance Awareness And Patronage In Ondo State, Challenges Involved

1.2 STATEMENT OF THE PROBLEM

Understanding customer awareness of and preference for insurance is a critical topic since it involves not just financial but also public product awareness. Despite the fact that several western nations, including the US and UK, have high rates of insurance service usage. Therefore, it is essential for the Nigerian insurance business to research how to raise consumer awareness of its goods in order to grow sales, especially in Nigeria. Despite the fact that low-income earners are typically focused on business expansion and sustenance, it is better to understand how awareness of the various insurance products can be influenced by culture, religion, norms, and values of people. Additionally, this presents difficulties because small business owners may be reluctant to withdraw any funds for purposes other than personal consumption. Even those who are familiar with how insurance works in practise may choose not to take part in the policy. Due to government restrictions, a sizable number of insurance policies are required (Elvis, & Andrews, (2015). Thus, it is likely that even those that has insurance cover are compelled by law to subscribe, not voluntarily purchased. Works done on level of insurance awareness and patronage in ondo state, challenges involved has little or no studies. Although there are some studies in Nigeria related to the subject, more especially on peoples‟ attitude towards insurance, yet the studies are not specific to Ondo state.. It is against this backdrop that this study is conceptualized to bridge the gap in existing literature in the study area.

1.4 Objectives Of The Study

The general objective of this study will be to examine Life Assurance Patronage and Its Implication on the Nigerian Economy. Other specific objectives are:

1 To assess the level of awareness of insurance products and its influence on insurance patronage Ondo state

2 To outline the factors that influence public awareness of insurance products in Ondo state

3 To examine the challenges that influence the patronage of insurance products in Ondo state

1.5 Research questions

1 What is  the level of awareness of insurance products and its influence on insurance patronage Ondo state?

2 What are the factors that influence public awareness of insurance products in Ondo state?

3 What are the challenges that influence the patronage of insurance products in Ondo state?

1.5     Hypotheses

In line with the statement of research problems and the objectives of this thesis, the following hypothesis will be tested:

HO1: the level of awareness of insurance products has no influence on insurance patronage Ondo state

1.6 Significance of the study

 It is hopeful that the study will contribute to academic learning and further research, knowledge dissemination as well as the practice of insurances business. Insurance captains may use this study to perceive behaviour of consumers on patronage. Customers may also use this study to have an insight of insurance operation, the products available for customers‟ benefits as well as the procedure to reap those benefits. Government may also use this study in policy formulation and evaluation of various forms of insurance and finance.

1.7   Scope Of The Study   

The study would cover Level Of Insurance Awareness And Patronage In Ondo State, Challenges Involved. The study was carried using  AIICO Insurance Limited using Abeokuta branch.

1.8 Operational Definition of Key Terms

Insurance: Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to guarantee another party compensation in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss.

Patronage: Patronage is the support, encouragement, privilege, or financial aid that an organization or individual bestows on another. In the history of art, arts patronage refers to the support that kings, popes, and the wealthy have provided to artists such as musicians, painters, and sculptors

Awareness: Knowledge or perception of a situation or fact.