MARKETING OF LIFE ASSURANCE POLICIES IN NIGERIA
ABSTRACT
In Nigeria the issue of taking life assurance policy has been neglected in the sense that at this presence time, it is estimated that not up to two percent (2%) of Nigerians own life assurance policies due to poor education and inappropriate marketing strategies for this fact, the benefits and role life assurance plays in this country is being viewed from a very crooked point thereby making it slightly visible.This study therefore focuses on marketing of life assurance policies in Nigeria. The population of the study comprises both staff and customers of Leadway Assurance Plc Enugu. A sample size of fifty (50) was selected made up of 20 staff and 30 customers. Both primary and secondary data were collected. Questionnaire coupled with personal interviews were the main research instrument. The data was analyzed by the use of chi-square statistical method.The study came out that insurance companies in Enugu state (Leadway Assurance) exercise their marketing functions and strategy mainly through advertising and sales promotions as a guide to customer profit motive and competitive tool. It was recommended that insurance companies should endeavor to establish a monthly publication. Such publication will serve as strong public relations machineries in promoting the image of insurance industry.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
In Nigeria, the issue of taking life assurance policy has been neglected, in the sense that at this presence time, it is estimated that not up to two percent (2%) of Nigerians own life assurance policies. For this fact, the benefits and roles life assurance plays in this country is being viewed from a very crooked point thereby making it slightly visible.
Moreover, the life assurance industry has entered on era of accelerated change as a result of increased competition in the products and pricing within all the insurance sectors. Hence professional marketing management is now a prerequisite, if a company is to return or advance its position in the competitive hierarchy they must follow suit.
However, before choosing the kind of cover to take, the intending assured should first of all sit down and analyzed his need. Life assurance has been said to be for those who live too long and those who die too soon. The needs of people in both these categories can be met. Most salary earners and wage earners have other people depending on them, it could be parents, a wife, children or even brothers and sister. In life assurance programs, funds are accumulated through payments made by the assured person called premium so that, should death occur, prior to a specified date or upon survival at an agreed period funds would be made available from the scheme to pay whatever benefits that are due.
The idea of assistance and association is not new to the Nigerian society. Various town and clan unions and social dubs, have various ways of showing benevolence to their bereaved members as discussed earlier. It is customary for people to pay condolence visit and present a sympathy purse. These practices are similar to mutual life assurance.
However, life assurance as practiced today is part of the nation’s colonial heritage. Obviously, the British introduced life assurance into Nigeria, hence the practice closely follows, the British pattern. The earliest colonial insurance interest in Nigeria was directed to the general insurance of goods and cargo.
Few life businesses which tricked in were referred to British Home Officers in London for processing. Only the affluent could afford it then because it was considered as enormous risk to insure person living in the tropics and the cost of providing such life cover was very expensive and uneconomical.
With independent in 1960, life assurance started to change. Lead way Assurance Company was incorporated between Nigerians and expatriates. It therefore became the life specialist’s underwriter. Within the same period, the Nigerian life and pension consultants together with the Nigeria universities management consultant indicated the development of group life and pensions scheme in Nigeria. Before 1960, many Nigerians shunned the idea of effecting life assurance cover. They felt generally that the insurance agents were wishing them bad-luck, premature death and therefore would never have anything to do with the insurance and their agents.
1.2 Statement of the Problem
a) Lack of statistics which result to problem in payment of benefits.
b) Inability by insurance marketer to design policies which will meet the current change in the society.
c) The effect of insurance image in Nigeria due to tribalism, religions strife etc.
d) The low demand for life assurance policy which could be attributed to lack or poor education and inappropriate marketing strategies.
All have contributed to the problem which tends to impede development of life assurance in the Nigeria society.
1.3 Objective of the Study
Having been exposed to the problems, we have to look into what the researcher intend to achieve which is as follows;
a) To provide a new statistical method that will enhance payment of benefit
b) To identify those policies that suits the current demand in the society
c) To promote insurance image and enhance inhabitance co-existence in the society
d) To provide a strategic method in marketing life assurance polices and promotes public awareness.
1.4 Research Questions
1. Are there any method used in valuing payment of benefit?
2. Does the organization carry out marketing research to know the current trends of an event in the society?
3. Does socio-cultural beliefs of the society affect the operation of life assurance policy?
4. Does lack of public awareness hinder the activities of life assurance?
1.5 Research Hypothesis
Ho: Insurance companies have no strategic method in
marketing life assurance policy.
H1: insurance companies have strategic method in
marketing life assurance policy.
1.6 Significance of Study
The study of the problems facing marketing of life assurance companies is significant in many ways, especially to the insurers, the life assurance intermediary and the insuring public.
Hence at the end of this study, the insurers and the life assurance intermediaries will be able to identify the problem militating against the effective marketing of life policy in the society. The study is also meant to highlight the need for adequate sales promotion methods, advertising principles and understanding of the life assurance policy.
Finally, it points out the need for marketers in the life assurance industry to appreciate the concepts, strategies and application of marketing as a spring board for growth and also the need for them to work with the actuaries of the life policies to specific target markets.
