study investigates the determinants of the effect of consumer behaviour on
insurance business in Nigeria. It analyze the interpretation of data
collection from respondents.
research questionnaire were draw to get
data from banking, civil service, self employed, married/single and
divorced. The result of the
questionnaire were used for positive correlation co-efficient which means that
consumer perception about risk influences the desire to buy insurance.
study recommends the price of insurance significantly affect the proportion of income spent on
TABLE OF CONTENTS
of contents vi
1.0 Introduction 1-4
1.1 Statement of the problem 4-6
1.2 purpose of study 6-7
1.3 Research question 7-8
1.4 Research hypothesis 8-9
1.5 Significance of the study 9-10
1.6 Scope of Study 10-11
1.7 Limitation of the Study 11-12
1.8 Definition of Terms 13
CHAPTER TWO: LITERATURE REVIEW
2.0 Introduction 14-15
2.1 Historical Background of Insurance in Nigeria 15-16
2.2 Characteristics in Insurance Science 16-19
2.3 Role of Insurance in an Economic
2.4 The Concept of Consumer Behaviour 22-23
Consumer Buying Decision Process 23-28
2.4.2 Determinants of consumer Behaviour 28-25
2.4.3 Factors Affecting Consumer Behaviour 35-36
2.5 The Buying
Decision Making Unit 36-40
2.6 Bases for Market Segmentation 41-42
2.7 Factors Contributing to Buying Behavior of
Insurance in Nigeria 42
CHAPTER THREE: Research
3.0 Introduction 47-48
3.1 Research 48
3.2 Restatement of Research Question 48-49
3.3 Restatement of Research Hypothesis 49-50
3.4 Research Design 50-51
3.5 Research of the Study 51
3.6 Research Instrument 51-52
3.7 Data Analysis 52
CHAPTER FOUR: Data Analysis and Interpretation
4.0 Introduction 54
4.1 Analysis 1 Demographic Information 55-59
4.2 Analysis 11 59-66
4.3 Testing of Hypothesis 66-73
CHAPTER FIVE: Summary
of Findings, Recommendations and Conclusion
5.0 Summary of Findings 75-76
5.1 Recommendations 76
5.1.1 Aggressive Awareness 76-77
5.1.2 Improved Economic Situation 77
5.1.3 Improved Claims Management 77
5.1.4 Introduction of Micro-Insurance
5.1.5 Aggressive Marketing Strategies 77-78
5.1.6 Improved Technological
5.2 Conclusion 78
5.3 Suggestions for Further Studies 78
aim of marketing is to meet and satisfy target consumers’ needs and wants. The
field of consumer behaviour according to Kotler (2003) studies “how individuals,
groups and organization select, buy, use and dispose of goods, services, ideas
or experiences to satisfy their needs and desires”.
theories and practices according to Osuagwu (2002) have much to learn from the
behavioural sciences but preoccupation with techniques may tempt marketers to
ignore the real world situations. Halbert (1965) states that “behaviuoral
sciences’ contribution lies in the fact that they require learning to take
explicit account of the human social aspects of individual and groups engaged
in the marketing behaviour rather than specific tools, techniques or ideas”.
Through the behaviuoral science contributions, marketers have come to know that
people tend to obey the pleasure pain – principle, using the former and
avoiding the latter. A person’s value is as conditioned by his behaviuor as
much as that of people around him.
any organization unable to provide goods and services that fulfill the needs and
wants of consumer has lost its basic reason of distance. This is the crux of
marketing concept, which encouraged organization to be consumer oriented in
order to survive in a competitive environment.
behaviour then ”is the behaviour customers or clients display in searching for,
buying, using, evaluating and disposing of products, services and idea which
they expect will satisfy their needs and wants.
This then makes consumer behaviour a study of how individuals make to
spend their resources on consumption related items and their evaluation of such
the service nature of insurance even makes the study of consumer behaviour very
important. Insurance according to Oyetayo (2001) can be defined “as the
contractual agreement between two parties called insurer and insured whereby
the former promises to indemnify the industry that suppose to the virile aspect
of any economy has been relegated to the background, this is however unconnected to the bad consumer
attitude towards the purchase of insurance.
success of any economy is majorly traced to the performance of its industries
and business, however, for these industries and businesses to attain good
performance, there must necessarily be a good security system to secure lives
and properties. Okwo (2005) describes insurance “as the handmaiden of commerce and industry, suggesting that modern commerce
and industry cannot function efficiently without a well planned and organized
insurance system. Moreover, success of
the first world countries cannot but be traced to the their well organized
security system (insurance) and effective and efficient buying behaviour of the
insuring public which has made the business of insurance the forerunner of
However, this research work shall consist the
The study of consumer behaviour of the
insuring public in Nigeria
Approaches of consumer behaviour
Factors affecting consumers’ attitude
Levels of business behaiour in Nigeria.
Consumer decision – making processes
in insurance industry and
Stages of the buying decision process
1.1 STATEMENT OF THE PROBLEM
attitude of insuring public towards the purchase of insurance products/services
has affected the industry in no small measure. Despite the numerical growth and
to some extend, expansion in the insurance industry in Nigeria, the
insurance market requires a through empirical investigation to determine the
cost structure and optimal production levels in which an insurance company can
perception of insurance service in Nigeria is worrisome. Most insuring
public do not believe in insurance. Religious believe that only God insures
have affected the industry. They see no reason in buying insurance products or
level of illiteracy also have a negative effect on the buying behaviuor of
insurance services. Illiterate according to Oxford Advance Dictionary (6th
edition ) “ is somebody or person not knowing how to read and write” But
insurance illiteracy goes beyond this reason, even those who know how to write
and read still find it difficult to understand what insurance entails, its
benefits and importance to individuals and society at large.
conservative attitude of insurance companies leading to lack of awareness is
also worrisome. There is nothing like
aggressive marketing or advertisement to insuring public and also educate them
about the workability benefit of insurance services.
participation by government and its parastatals also contribute to low
consumer’s attitude towards insurance products or services. Government
parastatals like NAICOM (National Insurance Commission) can also support the
insurance companies in the public enlightment of insurance so as to increase
the clients’ base in the industry.
claim experience also has its own negative effect in the industry. The insurance companies were accused of not
paying genuine claims. This had also
contributed to the attitude in the industry.
Whatever name the insurance industry has today was definitely given by
those who had been victims of some dubious insurers who defaulted in paying
genuine claim at one time or the other.
To streamline insurance business activities and stem the upsurge of the
mushroom insurance companies, insurance
capital base was raised from to N2 million, N3, million and N10 million for
life business, general insurance business and reinsurance businesses
respectively, leaving the industry with 58 registered insurance and reinsurance
companies from about 152 insurance and reinsurance companies prior the
1.2 PURPOSE OF THE STUDY
purpose of this study are as follows;
To find out effect of consumer
attitude towards insurance business by the insuring public
To find out if the price of insurance
will significantly affect the proportion of income spent on insurance
products/services by the consumers.
To investigate the attitude of
consumer towards the insurance business.
To find out effect of low patronage of
insurance products by the insuring public
To investigate various perception of
consumers towards buying insurance policies
To identify various objectives of
insurance companies towards consumers.
To find out various needs and wants of
insuring public and proffering solutions on how to meet these needs and wants
To investigate government control on
protecting the consumers/clients
To find out the effect of innovation
on consumer buying behaviour
1.3 RESEARCH QUESTIONS
research questions are as follows.
Does the behaviour of consumers have
any negative impact on the insurance business?
Does price of insurance significantly
affect the proportion of income spent on insurance by the consumers?
What are the attitude of consumers
towards insurance business?
What impact does low patronage of
insurance products has on insurance business in Nigeria?
What are the perception of consumers
towards buying insurance policies?
What are the objectives of insurance
companies towards consumers insuring public?
What are the various needs and wants
of insuring public?
What are the effects of introducing of
What are the effects of product
innovation on consumer buying behaviour.
1.4 RESEARCH HYPOTHESES
text for the primary statement are as follows
perception about risk does not influence the desire to buy insurance.
perception about risk influence the desire to buy insurance.
price of insurance does not significantly affect the proportion of income spent
on insurance by the consumers.
Hi: The price of insurance significantly affects
the proportion of income spent on insurance by the consumers.
innovation does not have significant impact on the buying behaviour on
innovation does have significant impact on the buying behaviour on insuring
1.5 SIGNIFICANCE OF THE STUDY
The significance of the study are stated below
study will help identify various behaviour of insuring public towards the
purchase of insurance product.
study will help to find out the impact of pricing on the purchase of insurance
study will provide explanations and reasons for changing of consumer attitude
towards insurance products.
study will investigate various perception of consumers towards buying of
study will improve the essence of market segmentation
study will establish reasons for adequate service delivery
study will effect a remarkable change of identify consumer needs and providing
study will investigate reasons for low patronage of insurance products.
(i) The study
will provide solutions to insurance companies on ways on identifying or
studying consumer’s attitude towards insurance products.
study will investigate effect product innovation will have on consumer buying
advice the government on various ways the insuring public can be
1.6 SCOPE OF THE STUDY
scope of the study shall the buying behaviour of insuring public towards the
purchase of insurance products in Nigeria. Insuring public like
individuals and corporate organizations shall be targeted. Their attitude
towards insurance products and insurance industry shall be investigated.
LIMITATION OF THE STUDY
to time and financial constraints, the study shall be limited to Lagos State.
The research shall also take into cognizance buying behaviour of insuring
public (individual & corporate organizations) in Lagos mainland of Yaba and
Alimosho Local Government Areas) The choice of Lagos State is due to the fact
that it is the commercial nerve centre of the country and therefore information
gathered shall be relevant for the further study of this research.
1.8. DEFINITION OF TERMS
This is the contract between two parties whereby one party known as the insurer
promises to indemnify the other party known as the insured, consequent upon the
loss of an insured contingency, with an exchange of consideration known as the
The party to the insurance contract who promises to pay losses or benefit to
the other party (insured) in financial loss suffered.
A person with an insurable interest who stands to benefit a policy of insurance
or a person or organization covered by insurance policy including the “named
insured” and any other parties for whom protection is provided.
Individual organizations who need one class of insurance or the other to
protect any financial loss caused by the insured peril.
Is the protection or cover that is given to a person or property through the
purchase of insurance policies.
A request for payment of the sum insured following the event insured against.
Is the behaviour customers or clients display in searching for, buying, using,
evaluating and disposing of products, services and ideas which they expect will
satisfy their needs and wants.
To receive a regular and or continuous purchase of products or to be regular
purchase of a product.
A security against financial loss. It is designed to place the insured in the
same financial position as he was immediate before the happening of event