CHAPTER ONE

INTRODUCTION

1.1     Background of the Study

The contribution of social media to the growth and development of insurance and making it count in Nigeria cannot be overemphasis. The marketing of insurance services has always being a central problem for the insurance company. A company with low marketing strategies tends to fail in the quest to achieve their goals. When an insurance company has an effective and efficient marketing strategy which is advertising their services through the social media, then they have created high level of awareness to the public thereby creating familiarity, increasing visibility and developing good customer relationship. The rite social media platforms in making insurance count in Nigeria have not being comparatively researched. The reality is that the insurance companies for a very long time have been having a bad reputation from the insuring public and the social media can redeem the pride of the insurance company.

The major problem in Nigeria is that insurance companies have been given a bad reputation with an awkward name which is “The 419 business”. The insuring publics do not believe or doubt the truth which the insurers preach which is not bringing confidence to the insuring public because of some dubious, fraudulent and unprofessional insurance companies or practitioners and also fraudulent clients. The primary objective of the social media is to help in creating awareness to the insurance public of the intension they have. Insurance in Nigeria has not taken its giant stand in playing its role in helping to develop the economy sectors of Nigeria. One of the problems of insurance development in Nigeria is as a result of inadequate awareness among Nigeria public. Also, the use of unqualified or untrained personnel in the industry also hinders the marketing of insurance services. The ineffective and unhealthy competitions which are carried out by the management of some companies which has led to the decline and fall of the customers. This has made the world of social media an option worth exploring for 21st century business.

On the social media are many services. A manager can choose to interact with the customers influence their opinion, correct any negative impression and set customers’ input in order to constantly have unique offerings in the marketplace. These social media include facebook, LinkedIn, Youtube, Whatsapp, Twitter Flicko, Blogs, among others.

Insurance plays a vital role in the transfer of risk across all spheres of life. The concept of insurance refers to the contract between two parties (insurer and the Insured) where one party (the insurer) promises to indemnify the other (the insured) for the occurrence of any risk covered under the contract in exchange for a monetary consideration called premium (Ogwo, 2010). The enlargement of the insurance company depends on the strength of the marketing department of the insurance industries and so if the marketing department of the insurance industries and so if the marketing department of the insurance industries has a vast social networking system, then marketing of insurance services will be easy and marketing cost will be low. However, the situation in Nigeria seems different. Despite Nigeria, the performance of the firm still becomes low because of the low patronage in the country at large. From the foregoing therefore, the study seeks to examine the relationship between social media and the performance of insurance firms in Nigeria from 2000 to 2017. 

1.2 Statement of the Problems

          The performance of insurance firms in Nigeria and the contribution of social media is very expedient because million of people can be reached through Facebook, Twitter, Youtube, LinkedIn, Blogs etc. however, the publics, which are the customers and prospects of insurance companies in Nigeria, have little or no knowledge of the activities, policies about the organizations and their products, hence the customers perceive them as being dubious when it comes to claim compensation. This perception may make the reputation of the organization if spread as alludes that in the new age of social media, a customer there is increasing guest by corporate organizations to carve out a winning image and personality for themselves in a highly competitive business environment. However the public of these organizations appear to have negative perception about them. They also do not understand the activities and policies of these organizations in the era of 21st century business, not many organizations, especially insurance company in Nigeria, appear to explore the great potentials that social media hold to succeed in making the desired impression on customers with their brands’ names, drive performance and increase profitability. Internationally, there have been many studies conducted to understand the importance and the need for a business to be associated with social media (Statistic brain, 2014). However in Nigeria not much study has been conducted in this era, therefore this study will understand social media as essential tool for any business organization, to understand the impact of social media and its effects on the performance of insurance firms in Nigeria.

1.3 Objectives of the Study

The main objective of the study is to examine the relationship between social media and the performance of insurance firms in Nigeria from 2000 to 2017. The specific objectives are;

1.       To examine the extent to which Facebook enhances the performance of insurance firms.

2.       To examine the relationship between Twitter and the performance of insurance firms.

3.       To examine the extent to which LinkedIn associate with the performance of insurance firms.

4.       To examine the relationship between Youtube and with the performance of insurance firms.

1.4 Research Question

1.       To what extent does Facebook enhances the performance of insurance firms?

2.       What is the relationship between Twitter and the performance of insurance firms?

3.       To what extent does LinkedIn associate with the performance of insurance firms?

4.       Is there any relationship between Youtube and with the performance of insurance firms?

1.5 Research Hypotheses

HO1: There is no significant relationship between Facebook and the performance of insurance firms.

HO2: There is no significant relationship between Twitter and the performance of insurance firms.

HO3: There is no significant relationship between LinkedIn and the performance of insurance firms.

HO4: There is no significant relationship between Youtube and the performance of insurance firms.

1.6 Significance of the Study

Internet connects the world and makes communication very fast and simple. The same with applied for business, makes customers, invertors, suppliers and everyone who is associated with the company connected. This study helps understand Social media as a medium to connect business with world and its positive outcomes on performance.

Fundamentally, it is essential we understand current usage and behaviour and identify potential problems so they can bead dressed. This can be seen in the amount of academic studies on social media within the last years.

However, Danah Boyd has gathered a collection of research about social networking sites that list approximately one hundred and fifty research papers, three books and seven research reports published in the year 2003-2010 (Boyd, 2010) none of these papers cover Africa. This shows a lack of research that concerns the African region and especially Nigeria where this form of media is greatly used.

Therefore the overall motivation for conducting this study is to contribute to research about social media in Nigeria.

This research should also create a platform for further research should provide useful data for market researchers, marketing and product development professional as well as educations as to how they can maximize social media for optimum benefit in their various fields.

1.7 Scope of the Study

The study is delimited under the following heading: content scope, geographical scope and unit of analysis.

Content Scope: The content scope of this study involves an investigation to ascertain relationship between social media and the performance of insurance firms in Nigeria from 2000 to 2017. The dependent variable is performance, measured by profitability, market share and sales volume. While independent variable is social media proxies by Facebook, Twitter, LinkedIn and Youtube.

Geographical Scope: This study is delimited in Port Harcourt Rivers State with references to some selected insurance firms including Ark Insurance Brokers Ltd, Mutual Benefits Insurance Plc and Cornerstone Insurance Plc.

Unit of Analysis: The unit of analysis in this research is the financial statement of insurance firms. The study covers from 2000 to 2017.

1.8 Limitation of the Study

Although this study has accomplished the purpose which it sets out to achieve, one of the very limitations is that the validity of the result or finding is defending on the honesty of the respondents in providing the needed information.

Due to constraint of time and money, it is difficult to carry out the research extensively. This led to the limiting of the scope cognizance was also taken to the fact that the academic calendar was too short and academic workload was enormous, as a result of this, no time to run around for the work.

1.9 Definition of Terms

Social media:

A group of internet based applications that builds on the ideological and technological foundations of web 210 and that allows the creation and exchange of user generated content.

Social skills:

Any skills facilitating interaction and communication with others. Social rules and relations are ways through a process called socialization.

Cyberspace:        

This is the elections medium of computer network in which online communication takes place.

Blogs:

A blog (a contraction of the term web long) is a type of website, usually maintained by an individual with regular entries of commentary, descriptions of events or other material such as graphics or video. Entries are commonly displayed in reverse-chronological order.

Vlogs:

Video blogging sometimes shortened to vlogging of via blogging is a form of blogging for which the medium is video and is a form of internet television. Entries often combine embedded video or a video link with supporting text, images, and other metadata.

Instant messaging:

Instant messaging (IM) is a form of real-time direct text based communication between two or more peoples, using shared clients, the text is conveyed via devices connected over a network such as the internet.

Twitter:

This is one of the social networking service and micro blogging services that enables users to send and read text based messages of up to 140 characters known as tweets.