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CONSUMER PREPARATION OF INSURANCE SERVICES IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

Insurance companies exist all over the world, and like other private enterprises, is to make profit. They do this though the judicious use of previews, and that have been paid through their numerous customers. A man takes up an insurance policy (life or non-life), presumably because is confident that at the occurrence of the event so insured, the insurer would not hesitate to indemnity him.

Besides, insurances is supposed to provide men and women with an institution through which they can systematically create financial security for themselves. It is to serve as an important channel through which capital can be made available to business and industry in an economy. In essence, insurance is a major risk management and a back bone of business as it is designed to take care of foreseeable business risks.

However, of all the industries whose operations constitute the life wire of all financial economics, the insurance advisory has succeeded most in attracting public distinct and widespread cynicism in Nigeria. Consumer perception of insurance companies, their services and even their practitioners is one of suspicion very often manifested in out right distinct of what insurers do.

But, for the fact that some classes of insurance are made compulsory by law, certain individuals would have had nothing to do with the insurance industry. Though, insurance industry is certainly the most unfamiliar to the Nigerian. Populace as a whole, out of all the financial institution in Nigeria economic system; being the unit within the financial sector that most intervals do not want to interact with as a result of misconception and inadequate knowledge of the services provided by industry.

According to (Yakabu, 1988:20) even though the existence of insurance companies within the financial system is noteworthy; the level of consumers perception and patronage of services rendered by them are steel considered not encouraging as such. More often then not, insurance companies operations had at one time or the other attracted eremitism from both the press and individuals.

Even to some people insurance industry is a cheating and deceiving institution which cannot keep to the contract made with the insured, while some people chain that insurance is for persons who can afford the time and money to hire lawyers to contest claims in courts which may in some cases result to endless adjournment.

Infact, we have almost reached a situation where finances is synonymous with the word dishonesty. This point can be buttressed with that one of the greatest causes that has related against insurance images is the criticism emanating from the myth that insurers are only to make money (premium), from the public without wishing to reciprocate by effective settlement on the events of claims.

As a result there has been universal outcry even among the supposed educated literate and enlightened Nigerians; indulging the hurt judges that sit over insurance oriented cases, that insurers are rogues and swindlers. Infact, thee seem to be the perception of Nigerians, either speaking from their own experience, or the experience of people they know regarding payment of claims, one may then ask, what the insurance industry in Nigeria is doing to correct all these negative perceptions, which is surprising, so reaching even among the Nigerian diets.

I believe the industry is old enough for people to appreciate what it stand for having commend business in Nigeria since 1921. At 84, however, it is pathetic to know the industry is still struggling to carve a positive image for itself in the eyes of the Nigeria consumers. Though, this elusive search has been a source of concern to the insurers.

To them, it is obvious that ht future of their industry depends on speedy improvement in it is image in the perception of the consuming consumers, it is supposed to serve. Well, if all these aforementioned misconception and allegation level against insurance industry were truly. So, the industry world not find favour in the yes of the insuring consumers.

Definitely, it is the realization of this that motivated the researcher to choose this topic with he hope that ht outcome of the study will be of great help to insurance companies and will also encourage insurance firm to undertake (further) instant research to identify more areas of dissatisfaction and take appropriate action.

1.2            STATEMENT OF THE PROBLEMS

The roles of insurance companies are to provide such services as tire, accident, marine and aviation insurance. They provide these services to ensure that financial losses of individuals are fairly and equitably distributed over the insured community. They also encourage and promote commercial enterprises by offering financial security to business men.

However, despite all the essential services rendered by the insurance companies hey still lack public interest. How can these problems be solved? Also why are they seen as dubious and dishonest organization?

1.3            THE OBJECTIVE OF THE STUDY

The main objective of this research work include:-

1.                 To find out it there is any relationship between consumers perception of insurance services and the level of their patronage.

2.                 To find out, if there is any relationship between consumers perception of insurance services and the level of their awareness.

3.                 To determine whether there is inverse relationship between consumers perceptions of insurance and their settlement.

4.                 To determine whether there is any relationship between consumers perceptions of insurance policy and their feeling of apathy towards insurance companies.

5.                 To make recommendation.

1.4            STATEMENT OF HYPOTHESIS

Hypothesis is a tentative statement about the universe which may or may not be true, for the purpose of thus research work, the following hypothesis will be tested.

Ho     There is a negative relationship between consumer perception of insurance services and the level of their patronage

Ho     There is a positive relationship between consumer perception of insurance services and the level of their patronage

Ho     There is a negative relationship between coinsurance perception of insurance services and the level of their awareness.

Ho     There is a positive relationship between coinsurance perception of insurance services and the level of their awareness.

1.5            SIGNIFICANCE OF THE STUDY

This topic crocuses interest in the researcher, since it deals with services, rather than phys8ically product. Because, up till this level of economic development of Nigeria, most people still have the notion that marketing is synonymous with just selling a physical or tangible products. It is the intention of the researcher to demonstrate, that marketing as a discipline lives all aspects of business operations, most especially in services like insurance industry which make extensive use of selling.

This will enable the insurance industry to expand their share of the financial market through effective and efficient implementation of appropriate strategy that will change the present unfavourable perception to favourble one. It will also be of immense use to insured consumers in maintaining good relationship with their insurance and consequently deriving mutual benefit and understanding.

1.6            DEFINITION OF TERMS

This study does not exempt to investigate the technicalities of insurance as a discipline. But, since there is crucial for proper understanding, it will be wise for us to examine than. They marketing aspects are the major concerns of thus study as its relate to consumes perception of insurance services. The following definitions shall be crucial to the study.

1)                Perception: The purpose by which an individual select, organize and interprets intimations, input to create a meaningful picture of the world (Kotler 1988:188)

2)                Insurance Consumer: Anybody in a position to enjoy or benefit from the services provided by the insurance industry today is IPSO-FACTO and Insurance Consumer ie, anybody whose interest is protected by the insurance of a policy of insurance. (ODELE, 1991:6).

3)                Insurance: It is a contract in which one party called the INSURERE – agrees of consideration of an unmediated payment of a smaller sum of certain equivalent periodical payment called – PREMIUM paid to him by the other party called the INSURED, to CNDEMNITY the insured against losses or damages resulting from the happening of contingent events (ONIMINDE, 1988:7).

4)                Contract: Is an agreement made between two or more persons to indemnity the persons at loss. (ANSON, QUOTED IN ONIWINDE 1988:7)

5)                Insurer: This refers to an insurance company or an individual providing insurance cover. (ODELE 1991:90).

6)                Insurer: This is the policy holder, that is the person or company who will receive the benefit of the insurance coverage (ODELE 1991:90).

7)                Premium: Regular amount paid in consideration of insurance (ODELE, 1991:90).

8)                Insurance policy: This is the written contract of insurance which is issued to the policy holders by the insurer. (Oktler 988:91)

9)                Insurance patronage: Support by insuring with an insurance firm. (OTler, 1988:91).

10)           Insurance company: This is firm that is engaged in providing services ie. A firm that has agreed to indemnity the insuring pu8blic against any loss inner future. (Kotler 1988:91).

11)           Peril A peril Represents the primary course of loss e.g fire, theft, accident. (Onitnicise 1988:8).

12)           Risk – Is the uncertainty which exist is to the occurrence of an event which causes economic loss. (Oniwinde 1988:8).

13)           Indemnity: This principle applies to all classes of insurance except life and personal accident. It means placing the insured in exactly the same position he was occupying just immediately before the loss. (Odele 1991:90).

14)           Insurable Interest A person who want to purchase an insurance services must stand to benefit from the existence of the life, or property to be insured and stand to suffer some losses. (Kotler 1988:91).

15)           Uberime Fides: This imposes mutual duty (Utmost God Paith) on both parties to disclose all material facts. (Oniwinde 1988:7).

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