CUSTOMERS’ SATISFACTION WITH INSURANCE SERVICES IN NIGERIA

ABSTRACT

This study examined customer satisfaction with insurance services, their level of awareness and factors affecting the patronage of insurance services in Nigeria. Four hundred questionnaires were administered, from which three hundred usable questionnaires were retrieved from our respondents. Tables, simple percentage and mean, regression, chi-square, AnovaTable and t-statistics were used for data analysis. The result of the study indicated that lack of trust and confidence among others affect the patronage of insurance services in Nigeria and that there is no relationship between respondents’ demographics and their level of satisfaction with insurance services. It was recommended that, for insurance companies to excel and for them to increase customer satisfaction, every effort must be made to boost the trust of the public and to fulfil all promises made to them and also must compensate customers when they are faced with misfortunes.

CHAPTER ONE

INTRODUCTION

1.1       Background to the study

            Insurance is often defined as the act of pooling funds from many insured entities (known as exposures) in order to pay for relatively uncommon but severely devastating losses which can occur to these entities. The insured entities are therefore protected from risk for a fee, with the fee being dependent upon the frequency and severity of the event occurring (Encarta dictionary, 2009). Thus, it is a commercial enterprise and a major part of the financial service industry.

            According to (Agbadudu & Unugbro, 2004), insurance is a cooperative device by which the loss likely to be caused by an uncertain event is spread over a number of persons who are exposed to it and who propose to insure themselves against such an event. Insurance helps in replacing risk with known cost, that is, the cost of buying and maintaining insurance policies. This insurance is not only an important aid to business, industry and commerce but also provides great benefits to the society as a whole.The aim of insurance contract is to provide indemnity, that is, compensation for injury or loss sustained.  Insurance has two broad classes which include life and non-life insurance. Life insurance comprise of whole life assurance, term assurance, endowment assurance and annuity while non-life insurance consist of fire insurance, marine insurance, motor vehicle insurance. Moreover, for these insurance product and service which are available to consumers to reach target market (that is desired people), adequate sensitization and awareness should be created in order to reach out to all the consumers. One of these is the adoption of selling concept. An organization produces a product and then uses various method of selling to persuade a customer to buy their product. Their aim is to sell what they produce and not to satisfy what the customer wants or need. Selling concept which include product, place, price, and marketing which include product, place price and promotion have a long way in satisfying potential consumers and encourage others toward insurance products. The focus of marketing mix remain how to make people embrace insurance product, use the products and enjoy the varieties of services offered by the insurance company and in turn make profit.

1.2       Research Problems

            In spite of the growing number of insurance companies in Nigeria, its growth is still being hindered because the insurance sector still witness a low level confidence in the insuring public, the general patronage is still atits lowest. Internal problem among the executives in an organization hinder the smooth implementation of marketing concept to insurance activities this is due to inability of the management of various insurance companies to engage the services of qualified marketers. Finally, these and other numerous problems; both internal and external environment still hinder the operations of the insurance sectors of the economy. In view of these problems stated that necessitate this research work. The researcher wants to identify the problems and then put forward a solution to the problems.

1.3       Research Question

1. What is the level of awareness of insurance services among the public?
2. What is the level of customer satisfaction with insurance serviceprovidersin Benin City?
3. What are the barriers to effective marketing of insurance service in Benin City?
4. What are the strategies for overcoming the limitation of effective insurance service marketing?
5. Are respondents’ demographics related to their level of satisfaction with insurance services?

1.4       Objective of the Study

1. To determine the level of awareness of insurance service among the public.
2. To evaluate level of customer satisfaction with insurance service providers in Benin City.
3. To identify barriers to effective marketing of insurance service in Benin City.
4. To uncover strategies for overcoming to identified imitations of effective insurance service marketing.
5. To investigate, if respondents’ demographics are related to their level of satisfaction with insurance services.

1.5       Significance of the Study

            This study will be of immense benefit to insurance serviceas it will help them to adopt marketing concept to their business activities.The study is equally important as it will help to unearth the problems encountered by insurance company in adopting marketing concept in the operation. This will serve as vital information to new entrants into the insurance business as they will strive to avoid those problems.

            Moreover, the loss of public confidence on the insurance industry operation will be removed, as information on the application of marketing are examined. This will enable managers and departmental executives to shift emphasis from sales concept to marketing concept. It will equally help the intermediaries who are independent business organization and directly and in the flow of products and its markets.

            Finally, this research work will be useful to potential users of information, lecturers, student’s marketers, suppliers, financial institution, non-business organizations, insurance and the public as it will serve as a reference point for further research.

1.6       Scope of the Study

            The study intends to examine the level of awareness of the public towards insurance services and also to establish the purpose and the need of insurance services to the public.

            This study will be conducted in Benin City among consumers

1.7       Limitation of the Study   

            So far, this research work is a success however there are some problems encountered, but as a management student we are able to manage this limitations in a way that the aims of our research was still achieved. The limitations encountered are;

-Delayed responses from samples

Some respondents did not fill their questionnaires in time so we had to move on with the available ones.

-Financial constraint

Also, financial constraint was a limitation to this research work.

1.8       Statement of the Hypotheses

1.8.1    Hypothesis 1

H₀:    Age and Education of respondents are not related to their level of satisfaction with insurance services.

H₁:    Age and Education of respondents are related to their level of satisfaction with insurance services.

1.8.2    Hypothesis 2

H₀:       There is no relationship between respondents’ occupation and their level of satisfaction with insurance services.

H₁:       There is a relationship between respondents’ occupation and their level of satisfaction with insurance services.

1.8.3    Hypothesis 3

H₀:     There is no relationship between respondents’ gender and their level of satisfaction with insurance services.

H₁:       There is a relationship between respondents’ gender and their level of satisfaction with insurance services.

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