TABLE OF CONTENTS
CHAPTER ONE
INTRODUCTION
1.1 Background
of the study
1.2 Statement of Problem
1.3 Aim
and Objectives of the Study
1.4 Relevant
Research Questions
1.5 Relevant
Research Hypotheses
1.6 Significant
of the Study
1.7 Scope
of the Study
1.8 Definition
of Terms
CHAPTER TWO
LITERATURE REVIEW
2.0 Introduction
2.1 Overview
of Life Insurance
2.2 Theories
of Life Insurance
2.2.1 Theory of Bonus
2.2.2 Theory of Consumer Behaviour
2.2.3 Socio-Cultural School of Thought
2.3 Conceptual
Framework of the Study
2.3.1 Concepts of Life Insurance
2.3.2 Historical Background of Insurance in Nigeria
2.3.3 Low Level of Insurance Culture
2.3.4 Customers’
Satisfaction
2.4 Empirical
Review of the Study
2.5 Conclusion
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Preamble
3.2 Research Design
3.3 The Population
3.4 Sample
Procedure and Sample
Size
3.5 Instrumentation
3.6 Data Collection and Validity
3.7 Method
of Data Analysis
3.8 Limitations of the Methodology
CHAPTER
FOUR
DATA ANALYSIS AND INTERPRETATION
4.1 Preamble
4.2
Respondents
demographic characteristics and classification
4.3 Presentation
and Analysis of Data According to Research Question
4.4 Test of Hypotheses
CHAPTER FIVE
SUMMARY, CONCLUSIONS AND
RECOMMENDATIONS
5.1 Introduction
5.2 Summary
5.3 Conclusions
5.4 Recommendations
CHAPTER ONE
INTRODUCTION
1.1 Background
of the study
Since
the end of Second World War, The insurance industry the world over has
experienced remarkable growth. Concurrent with this growth has been
significant changes within the industry.
The Nigerian insurance industry is not unaffected by this general growth
malady. The growth of multiple line transition, introduction of package
policies, the universal banking system, grassroots insurance, the variable
annuity, growth life insurance,
universal life policy, changes in regulatory framework, continued expansion of
the social security system and the involvement of government as a provider of
private insurance are all part of the challenges with which the insurance
industry must contend with (Ibok, 2006, Soon, 1996).
Although
the future of insurance industry in Nigeria appears bright, a number of
unresolved problemsstill exist; of particular interest is the attitude of the
public towards life insurance system, which has affected the consumption of
insurance products. In Nigeria, this
problem seems to be even more pronounced because of the level of literacy of
the Nigeria populace.
Insurance
has remained one of the least purchased itemswithin the financial market. Records reveal that about only 10 percent of
the Nigerian population have insurance of any sort (Mordi, 1990; Wilson, 2004;
and Oworen, 1991). In general, this negative marketability of insurance
products has become a problem not only to the insurance industry, but has also
affected economic development.
The
problem has existed for a long time and has increased somewhat with the
sophistication of the Nigerian society which has grown knowledgeable in recent
years (Ibok, 2006).
However,
the increased importance of insurance as a provider of financial services and
of investment funds in the capital market is especially pronounced in developed
economies whereas insurance consumption in many developing countries is still
very low (Ebitu E. T., Ibok N. I.
&Mbum P. A. (2012). Little does one wonder what will be the future
of this all important industry if these problems continue unabated?
The
focus of this proposal is to examine and evaluate attitudes of the public
towards life insurance consumption in Nigeria, using Lagos state as a case
study.
1.2 Statement of Problem
The
large variation in consumer’s attitudes towards life insurance consumption
across different economies of the world raises some important questions about
what are the causes of this variation and thus, what factors have affected life
insurance consumption? By assessing its role as a major financial intermediary,
life insurance has become a key source off long term capital, encouraging the
growth of capital markets (Catalan et al, 2000; Impavido and Musalem, 2000).
Indeed,
several studies have found sufficient evidences to suggest that, the
development of insurance industry is related to economic growth (Ward and
Zurbruegg, 2000; and Soon 1996).
Life
insurance has taken on an increasing importance as a means for individuals and
groups to manage their income risks (Osaka, 1992 and Njogu, 1991).
Moreso,
empirical studies on changing life insurance marketing on the on hand, and
consumption of life insurance products on the other hand in Nigeria appears to
be inadequate.
As
Mordi (1990) has rightly pointed out, figures are yet to be available in many
activity areas of insurance. There are even questions of adequacy of such
empirical data. Lack of available data and information invariably means lack of
awareness and interest on the part of the consuming public. Therefore, despite
its apparent role in risk management and transfer, relatively few people in
Nigeria appear to be appreciating this role. Some who buy insurance (especially
motor vehicle insurance) do so because it is made compulsory by law. So far,
studies on life insurance marketing and consumption in Nigeria have focused on
the entire country. Little effort is made to disaggregate performance across
the different states or geopolitical zones of the country to determine if there
are location specific problems, differences or regional factors that could
influence public’s attitude to life insurance consumption. This explains why
the present study is concerned with identification of the key marketing and
consumption attitude inhibitors in Nigeria with particular reference to Lagos
State. It is within this context that this study attempts an empirical investigation
of those institutional factors that inhibit members of the public attitudes
towards life insurance consumption in Lagos State.
1.3 Aim
and Objectives of the Study
The
general purpose of this study will be to identify and examine those factors
within insurance institutional framework that affect the attitudes of the
public towards life insurance consumption in Lagos State. Thus, the specific
objectives will include:
·
To determine the
socio-economic characteristics of life insurance consumers in Lagos State.
·
To analyse the effect or
relationship between the identified factors and life insurance consumption.To
explore avenues upon which a vibrant life insurance market could be developed
in the state.
1.4 Relevant
Research Questions
The
following would serve as research questions for the purpose of justifying this
work:
·
What are the
socio-economic characteristics of life insurance consumers in Lagos State?
·
Is there any relationship
between the identified factors and life insurance consumption?
·
What are the avenues upon
which a vibrant life insurance market can be developed in the state?
1.5 Relevant
Research Hypotheses
The
following hypothesis would be used in justifying the research study:
Research Hypothesis One
H0: The
attitude of the public towards life insurance consumption in Nigeria is
positive.
H1: The
attitude of the public towards life insurance consumption in Nigeria is
negative.
Research Hypotheses Two
H0: There
are no significant avenues upon which a vibrant life insurance market can be
developed in Lagos State.
H2: There
are significant avenues upon which a vibrant life insurance market can be
developed in Lagos State.
1.6 Significant
of the Study
The
study of the attitudes of the public towards life insurance consumption in
Nigeria shall be of significant pros /advantages to:
i.
Life
Insurance Firms in the Country: The
pros of this study to them includes:
It will reveal to them how they can strategically
market life insurance policies to members of the public in Lagos State,
revealing to them benefits they can get from undertaking different variants of
the policy.
ii.
Academic
Researchers/ Students: The
pros of this study to them includes:
It may provide support to the academic researchers to
understand the public’s behaviour towards life insurance policies in the
insurance industry by filling the gap in the literature and by investigating
the relationship between public’s attitude and their patronage of life
insurance schemes.
It will also serve as a good reference material to
students and academicians that are carried out research studies in a similar or
closely related area.
iii.
Members
of the Public in Lagos State: The pros of this
study to them shall include:
It will explain in detail to the public on the need
for them to undertake life insurance policy covers, judging by the nature of
uncertainties that characterizes the business environment and social life they
leave, so that when such probable or possible events occurs, they wouldn’t have
to experience much traumatic
setbacks.
1.7 Scope
of the Study
The
study is scoped to cover the attitudes of the public towards life insurance
consumption in Nigeria. The study is also delineated to cover the life
insurance activities, policies, products and services of the insurance
companies located in the mainland area of Lagos State. This measure will enable
the research study to be conducted within the manageable limits of the scope
defines by the variables in the topic of the study.
1.8 Definition
of Terms
Agent: Independent
insurance salesperson who represents a particular insurer in sourcing for
insurance business.
Broker: Professional
insurance salesperson that searches the marketplace in the interest of clients,
not insurance companies.
Capital: Equity
of shareholders in the stock of an insurance company. The company’s capital and
surplus are measured by the difference between its assets and liabilities. This
protects the interests of the company’s policyholders in the event of financial
crises.
Claim: A
demand made by t6he insured, or the insured’s beneficiary, for payment of the
benefits as provided by the policy.
Life Insurance: It
is a risk-pooling plan, an economic device through which risk of premature
death is transferred from an individual to a group through the insuring
company.
Mortality Table: It
is a statistical table showing the percentage of death at any given age.
Premium: The
price of insurance protection for a specific risk.
Underwriting: It
is risk assessment, selection and decision making. It is the process of
evaluating a proposal and deciding the basis of accepting or otherwise the risk
proposed. Thus making each to contribute
according to the loss probabilities transferred to the common fund.
Underwriter: The
individuals trained in evaluating risk and determining rates.
Valuation: A
calculation of the policy reserve in life insurance. It is a mathematical analysis of the
financial condition of a life portfolio.
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