TABLE OF CONTENTS

TITLE PAGE—————————————————————-i

CERTIFICATION         ii

DEDICATION     iii

ACKNOWLEDGEMENTS     iv

ABSTRACT        v

TABLE OF CONTENTS        vi

CHAPTER ONE  1

1. 0    INTRODUCTION         1

1.1   BACKGROUND OF THE STUDY   1

1.2     STATEMENT OF THE PROBLEMS        3

1. 3    PURPOSE OF THE STUDY  7

1.4     RESEARCH QUESTION/HYPOTHESIS  8

1.5 RESEARCH HYPOTHESIS      9

1.6     SIGNIFICANCE OF THE STUDY  9

1.7     SCOPE OF THE STUDY       10

1.8     DEFINITIONS OF TERMS    10

REFERENCES    14

CHAPTER TWO 15

LITERATURE REVIEW        15

2.1     INTRODUCTION         15

2.2     LITERATUE ON LOW RESPONSE TO INSURANCE COVER    16

2.3     CHARACTERISTICS OF THE NIGERIAN INSURANCE   INDUSTRY         29

2.4     ON THE UNCOORDINATED MARKETING STRATEGIES        51

2.5     QUALITY OF MARKETING PERSONNEL      52

2.6     INSURANCE INDUSTRY MOVES TO LAUNDER IMAGE         53

REFERENCE      57

CHAPTER THREE       59

3.0     RESEARCH METHODOLOGY      59

3.1     INTRODUCTION         59

3.2   RESEARCH DESIGN    59

3.3     THE POPULATION OF STUDY     60

3.4     SAMPLE SIZE     60

3.5     SOURCES OF DATA   61

3.5.1 PRIMARY SOURCE     61

3.5.2 SECONDARY SOURCE        62

3.6     STATISTICAL TECHNIQUES USED      63

3.7     DATA ANALYSIS TECHNIQUES 63

3.8     LIMITATION OF THE STUDY       64

REFERENCES    65

CHAPTER FOUR         66

DATA PRESENTATION AND ANALYSIS       66

4.1     DATA PRESENTATION       66

4.2     DATA ANALYSIS        66

4.2.1 DISTRIBUTION OF TABLE  66

4.3     TESTING OF HYPOTHESIS 70

4.4     DISCUSSION OF FINDINGS          74

REFERENCES    76

CHAPTER FIVE 77

SUMMARY, CONCLUSION AND RECOMMENDATION  77

5.1     SUMMARY         77

5.2     CONCLUSION    77

5.3     RECOMMENDATION 78

5.4     SUGGESTIONS FOR FURTHER STUDIES/RESEARCH    80

BIBLIOGRAPHY          81

APPENDICES     84

CHAPTER ONE

1. 0    INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The business of insurance anywhere in the world strives on confidence and integrity. Therefore image remains a crucial component of its survival. And in Nigerian the story is the same that is the perception of the Nigerian public is vital to the future development of insurance. Philip K.(1992).

Insurance was introduced into the country about eight decades ago and unfortunately, the industry is yet to penetrate or enjoy total acceptability of the Nigerian public. Insurance: They would admit that less than ten percent of the Nigerian public has one form of insurance policy or the other according to Ayo, A. (1997).

Although the Nigerian Insurance Industry has come of age, in its own little way and has contributed to the development of the Nigeria economy: There is evidence to believe that the industry is yet to accomplish its expected roles, which had led to its stunted growth, negative perception and low response to its products by the public, Banjo, K. (1997).

Notwithstanding the low response to insurance cover in Nigeria, there is no doubt that the culture of thrive is strong premise upon which development and prosperity can be firmly anchored.

Insurance by its encouragement of self-restraint through obligation sayings, peaceful family welfare, health care provisions for old age and pensions, can contribute immensely to the overall development of a nation and its people. Man is viewed as an engine of productivity and creation of wealth. He is better poised for the achievement of excellence in all fields of human endeavour, upon the inception of an insurance policy, which automatically and justifiable enhances his financial standing Falegan, J. (1991).

Despite all the benefits insurance have harbored in its economic development through its risk bearing to the nation and the welfare of the insured, the industry is still suffering from poor public image and low response of its cover which it renders to the public.

1.2     STATEMENT OF THE PROBLEMS

Marketing of insurance services in Nigeria have suffered poor/low patronage from the public. It is a very dry marketing, especially when compared with the marketing of physical goods like cars, radios, fans and so on.

The low response to insurance cover is as a result of many factors, some of these factors are:

a)       Colonial Era: When insurance services’ were introduced in this country by the colonial masters, they dominated the operations. These colonial masters never wanted the citizens to know what was going on in the industry, because of the huge money they were making from the industry. They later repatriated it to their country and our people were not allowed to know what was going on. It was just like a secret trade which a master would not like to disclose to his servant. Consequently, Nigerians lost interest in patronizing insurance products from its inception Pat U. (2000).

b) Training and development: This is an essential ingredient for enviable growth of any vocation. The British Insurance Industry was established earlier with facilities for formal educational qualification from their higher institutions while chartered insurance institute of London provided the “professional qualification”. In a similar way, British Insurance Companies and LLoyds offered facilities for on- the-job training to enhance the acquisition of technical skills. In Nigeria the situation is quite different, the colonial masters were merely interested in repatriation of profits from the industry; No concerted efforts were made towards training and development of indigenous manpower.

Nigerians were therefore on-lookers in their own empire, a grim position that persisted till after independence. From the above explanation, it could be noticed why the Nigeria insurance market was flooded with Mushroom Insurance Companies and mere agents, who were quick to collect premiums and could not respond to claims whenever it arises. Also those who do not understand the techniques of insurance terms contributed in polluting the mind of the public in buying the insurance services or products from the onset.

c) Culture and Religious belief: The culture and Religious belief of our people is another factor. In some places, they believe that whatever happens it is the way God wants it and to insure and make claim is going against the will of God. So talking insurance services to such people is waste of time, because it is against their belief.

d) Poor Quality services and claim settlement: This probably has been responsible for the image and poor patronage of the industry. The industry has lost its goodwill to the public, due to the fact that consumers are not the king but the insurers. The insurers give the public their already existing services or products, without asking the consumers what they wants or services that suits their present needs. Due to the poor settlement of claims in the industry, the public have deemed the insurers and their agents as a legalized robbers, trickers, fraud-stars and so on, who are quick to collect premium and avoids claims  Epetimehim, F.(1997).

Poverty nature of our people is another factor that had contributed to low response to insurance cover. Many of our citizens including graduates are unemployed. Again, even the ones working, not all of them can, afford three square meals a day. On this background, you cannot talk of insurance products or services to a person who cannot feed well. Not only that such a person cannot understand; but he has no money to pay premium.

f) Poor level of Awareness, Enlightenment and illiteracy of the public: The main problem in the promotion of intangible commodities such insurance is that the product that is being sold cannot be seen, felt or demonstrated.

There are indeed vast opportunities, but lack of awareness or proper orientation has hindered the appreciation of this catalyst, for economic progress.

Ignorance due to-limited knowledge about insurance, they could not adequately explain fully the gain or importance of buying insurance cover on their property The insurers do not institute the personal selling and public relation in the development of close relationship between the promoters of insurance and the Nigerian consumers (sellers and buyers) of the products .or services. And these remain the only panacea, where insurers fail to educate the public enough.

g) Inflation and Nature of the product: Just as trust has hurt the industry, the persistence of high inflation in the 1980’s, 1990’s and 2000’s has had very adverse effects on the insurance culture especially with life insurance. Most rational People can easily see that what they get for many years so forced savings in premium (s) payments quickly come to nothing when they collect it, because of inflation. Other sectors sell tangible products, but insurance sell intangible product and this affect the patronage of insurance products Osoka O. (1992).

1. 3    PURPOSE OF THE STUDY

The purpose and objective of this study is to investigate the low response to insurance cover in Nigeria. Other specific aims to be accomplished include:

i)       To encourage insurers to improve its poor image and quality of its products or services. And also, to be trustworthy in discharging their obligations to their consumers.

ii)      To point out the importance of creating answers on insurance services through advertising, Public relation and promotion in media, such as radio, television, newspapers and personal selling.

iii)     To know if the consumers of insurances have been responding positively to the policy.

iv)     To establish the causes of low insurance patronage.

v)      To explore the various methods to be used to correct the problems of low insurance patronage.

1.4     RESEARCH QUESTION/HYPOTHESIS

In an attempt to analyze the attitude of the Nigerian consumers, the following research questions and would be answered as designed to reflect on the topic.

a.       Has the benefits of insurance products/services been fully realized to make its impact on the consumers?

b.       Are the marketing of products/services, and the marketing of physical goods, which includes cars, radios, rice, alike in the approval of consumers?

c.       In Nigeria, do the citizens and government appreciate and understand the usefulness and economic values of insurance products or services?

d.       Are the insurance companies playing their roles efficiently in rendering insurance products/services to members of the public, bearing in mind what is obtained in advanced countries like Britain from where insurance was introduced into this country?

e.       What are the consumer’s responses towards insurance products?

1.5     RESEARCH HYPOTHESIS

H0: Consumers of insurance products have not been    responding positively to insurance.

Hi:     Consumers of insurance products have been       responding positively, to insurance.

H0:    The benefits of insurance products/services have been fully realized to make its impact on the consumers.

Hi: The benefits of insurance products/services have not been fully realized to make its impact on the consumers.

1.6     SIGNIFICANCE OF THE STUDY

This research work is carried out with the expectation to rate the response of the public to insurance cover in third world economy, and the findings of the causes and recommendation of this study will help to reduce the problem of low response to insurance cover in the third world to proffer solution to the problem and hence the adverse consequences to the entire society at large.

1.7     SCOPE OF THE STUDY

The scope of the study is limited to insurance companies operating in the Trans Amadi Area, in Port Harcourt, Rivers State.

1.8     DEFINITIONS OF TERMS

The terms used, in this study will be defined as used in the study and in accordance o their meanings in the insurance industry.

CONTRACT OF INSURANCE: An agreement between the insurance company and an insured (policyholder), whereby the insurer undertakes in return for the payment of certain consideration called premium, to pay to the insured a certain sum of money or to grant compensation on  happening of a specified event.

PREMIUM: The monetary consideration paid by the insured to the insurer for the cover of benefit granted.

ACCIDENT: An unlooked for misfortune or an unwanted event, which is not expected or designed.

ACT OF GOD: An event which no human foresight can prevent and of which human prudence is not bound to recognize the possibility, e.g., earthquake.

POLICYHOLDER: The policyholder or other persons who is indemnified under the insurance contract or policy.

AGENT: A person who acts on behalf of another (the principal) and who brings the principal into contractual relations with the third parties.

BROKER: An insurance intermediary who advises his client and arranges their insurance. He held professional skill in

relation to insurance business and is normally the agent of the insured for payment under his policy.

CLAIM: A demand by the insured for payment under his policy.

POOR PATRONAGE: The customer’s low support in buying insurance products/services.

COMMISSION: An agents or brokers remuneration. It is also termed broker’s commission.

DAYS OF GRACE: A period of days, immediately after the renewal date allowed for the payment of the premium.

EX-GRATIA PAYMENT: A payment made as of grace, where there is no legal liability to do so.

INSURABLE INTEREST: This exists where the insured lose financially at the happening of the insured event and gain at its existence.

MATERIAL FACT: An act, which will influence an insurer in deciding the acceptance or rating a risk and the imposition of any special condition.

MISREPRESENTATION: A fraudulent act/statement made by the insured, which he claims to be true in order to deceive.

POLICY FORM: The evidence of the insurance contract between the insured and insurer.

RATE: The sum chargé for each unit by which the premium is calculated.

PROXIMATE CAUSE: Is the real cause of an insured event.

THIRD PARTY: A person with whom one is not in contractual relationship. (One who claims on another is a third party).

UNDERWRITER: In an insurance company the person who accepts or declines risks and who decides the terms rates which is acceptable.