An Evaluation Of Marketing Of Term Assurance In Nigeria
A close look at the Nigeria insurance market indicate that the sale and purchase of term, assurance policy is declining. And this decline was assumed an unpro-portinate dimension since the Nigerian’s independence in 1969, hence it calls for urgent attention.
This research therefore is intended to provide empirically both the conceptual and operational views of what term assurance means to the insurers, insurance intermediaries and the insuring public. It lay’s particular emphasis on the various elements that determine and affect the successful marketing of a term assurance policy from the view point of an insurance intermediary.
The analytical model used is integrated into theory, logic practical and worked out in percentage. It was discovered that lack of education awareness, motivation and adequate training and government imposed constraints inhibits the successful marketing of term assurance policies in Nigeria.
The researchers therefore gave some advance suggestion, recommendations based on the findings which hopefully will alleviate the problems in successful marketing of term assurance policies in Nigeria.
1.1 Background Of The Study
Term assurance is one of the types of life assurance.
It is defined as a contract that furnishes life assurance protection for a limited number of years. The face value of the policy being payable only if death occurs within the stipulated term and nothing being paid in case of survival.
Customarily, term assonance policy was issued in 1983 A.D, Richard marine premium of sixteen pounds (16) percent for a term of 1113 months with sum assured of 64.66 the effective date of the policy was from 18th June 1583 to 17th June 1854.
During the course of the policy, the assured died on the 9th of May 1584 and the sixteen underwriters who subscribed to policy had to redeem their obligation after courts judgment in favour of the assureds beneficiaries in a suit instituted by the assures challenging the validity of eh developed a large number of term assurance products each suited or designed to meet the requirements of different types of customers.
These products include:
Renewable term Assurance:
This option permits the insured at the expiration of the first term period or at the end of any subsequent term period to renew the policy without a medical examination and irrespective of eth insured health at the time of renewal
Convertible term Assurance:
This insured has the option to converted the policy to a permanent types of contract upon a proper adjustment in the premium charge without medical examination.
Decreasing Term Assurance:
This types decrease in face value, it is widely used as a rider for permanent contract and as a separate policy to provide portage protection. There is a year by your decline in face value be coming zero at the contract term
Increasing term Assurance:
This is virtually never sold as a contract alone. Connection with combination to provide a benefit that increases with time and is payable on death.
1.2 Statement Of Problems
The following problems emirates from the topic:
Lack of public Awareness:
Due to the low level pf advertising insurance products i.e. ( term assurance) most of the public are not aware of the insurance products and this has resulted to low level of patronizing insurance products (term assurance)
Low level of Promotional Strategy:
Promotional strategies used here are not attractive to the customers and this has resulted to low level of patronizing term assurance products.
Low of Level of Pricing Strategies:
Insurance to a layman is regarded as fraud business. And this is causing low demand in insurance products.
Poor Management Strategies:
Management are regarded as the pillar of insurances, but where there is poor management it could result to low demand of term assurance products.
The quick commission syndrome and marketing myopia are said to contribute immensely to the falling market at term assurance in Nigeria
1.3 Objective Of The Study
The general objective of the study is to evaluate the problems of marketing of term assurance in Nigeria.
Specifically, the study is intended to:
- Evaluate the promotional strategy
- Evaluate the pricing strategies of term assurance products in Nigeria.
- Make recommendations as to how to increase the product of term assurance there by reducing the problems of marketing of term assurance.
- To evaluate the poor management strategies.
- Finally the researcher wants to find out the impact of lack of awareness in marketing of term assurance.
The researcher wants to find out the impact of inflation in the marketing of term assurance.
1.4 Significance Of Study
The study of the problems facing term assurance marketing in Nigerian is significant in may respects, especially to the insurer, eh insurance intermediaries and the insuring public.
This, at the end of the study the insurers and the insurance intermediaries will be able to identify the problems militating against effective marketing of term assurance policies in Nigerian, the study will also provide the insurer and insurance intermediaries with means of improving term assurance market in the Nigerian insurance market.
The research work will contribute enormously to the plans of the various life assurance. Association toward a better understanding of the problems facing life assurance in particular.
Moreover, the study will expose the insurance intermediaries to the various factors affecting a prospective insured’s decision to demand a particular term assurance policy.
However the findings and suggestion resulting from this study could awaken the interest of insurance intermediaries and the public to sale and demand different kinds of term assurance polices.
1.5 Scope Of Study And Limitations
This research work is set out to cover the entire insurance industries in Nigeria.
The high degree of privacy with which documents and information are kept by the insurance companies hampers the collection of first level information from some of our respondents and company management and agent/broken to conceal certain documents and information, such as monthly sales volume and register, policy registers and the policy type in most demand, greatly inhibited the conduct of the work.
Summary, Conclusions And Recommendations
This chapter presents the summary, conclusions and recommendations of the study based on the objectives of the study. The main objective of this study was to establish challenges affecting marketing of insurance services in insurance agencies in Nigeria.
5.2 Summary Of The Findings
The study revealed that the insurance agencies market various insurances services such as general insurances services, education insurance services, saving and investment services and medical insurances services. The established that ineffective advertisement of insurance services, high competition in the market , incompetence and lack of experiences of staff , rigorous regulations and lack of customer awareness on insurance services greatly hindered marketing of insurance services by insurance agencies to a great extent.
The study revealed that negative consumer perception, nature of insurance services and products affected marketing of insurance services. The study also revealed that lack of availability of marketing channels hindered marketing of insurance service through insurance agencies.
The study revealed that marketing strategies adopted by insurance agencies were no hence affected marketing of insurance services to a very great extent. The study revealed that poor customer relation management customer relation management had not been effective in marketing of insurance services from insurance agencies as it led to customer feeling unsatisfied and always sought insurance service from the insurance companies rather than through the agencies.
From the findings, it was revealed that promotion challenges faced by insurance agencies in marketing insurance services such as lack of sale promotion and ineffective personal selling affecting marketing of insurance services to a very great . Poor public relation, ineffective choice of promotion strategies and ineffective advertisement affected marketing of insurance services to a very great extent.
The study further established that high cost of promotion affected marketing of insurance service to a great extent clearly exhibiting that lack of sale promotion, ineffective personal selling affecting marketing of insurance services, poor public relation, ineffective choice of promotion strategies and ineffective advertisement affected marketing of insurance services to a very great extent.
The ineffective choice of media channel was also found to affects marketing of insurance services such as radio, newspapers, televisions affected marketing of insurance company while 6% indicated that use of billboard affected marketing of insurance services. The study revealed that ineffective choice of media in marketing and advertising insurance services to the market greatly affected the marketing of insurance services through the insurance agencies.
From the findings, the study revealed that complex procedures in claims management, failure to adopt information technology strategy affected the marketing of the insurance service and mistrust in insurance relationships between insurance and the customers to a very great extent. The results further found that lack of innovativeness in insurance product development affected the marketing of insurance services, cost of insurance services and pricing of the insurance policies, low trained and inexperience marketing staff affected that marketing of insurance services from the insurances agencies.
It was also revealed that choice of communication channel, lack of reliability, fraudulent claims and high premium insurance brand hinders insurance agencies from effectively marketing insurance services. The results also indicated that an unattractive building, poor landscaping and poor interior furnishing of insurance agency offices, inaccessibility of the insurance policies and lack of brochures, unclear policy documents greatly affects marketing of insurance services through insurance agencies.
The study concluded that complex procedures in claims management, failure to adopt information technology strategy, mistrust, lack of innovativeness in insurance product development affected the marketing of insurance services, cost of insurance services and pricing of the insurance policies poised a challenge to marketing of insurance services by insurance agencies.
The choice of communication channel, lack of reliability, fraudulent claims and high premium insurance brand affected by marketing of insurance services by the insurance agencies an unattractive building, poor landscaping and poor interior furnishing of insurance agency offices, inaccessibility of the insurance policies greatly affected marketing of insurance services.
The marketing strategies adopted by insurance agencies had not been effective in attracting to increase number of customers hence the need to devised new marketing strategies by insurance agencies to effectively market insurance services
The study concluded that poor customer relation management customer relation management had not been effective in marketing of insurance services in insurance agencies. The poor customer relation management had been affecting insurance service quality where customer feeling unsatisfied and always sought insurance service from the insurance companies rather than through the agencies.
5.4 Recommendation For Policy And Theory
The study recommends that management in insurance agencies need to employ skillful, knowledgeable and qualified marketing workforces who could effectively market the agency insurance services.
The insurance agencies need to adopt effective marketing strategies, select efficiency channel of advertisement and improve on delivery of quality of insurance services as well as advertise aggressively to attract more customers.
The study recommends that management of insurance agencies need to make effective choice of communication channel, enhance reliability in delivery of insurance, reduce fraudulent claims and manage premium insurance and develop insurance brand to enhance marketing of insurance services by the insurance agencies.
The insurance agency premises should be located in an attractive building, attractive landscaping and good interior furnishing of insurance agency offices, accessibility of the insurance policies to enhance marketing of insurance services.
The insurance agencies should consider the nature of products, cost, consumer awareness and availability of marketing strategy to ensure that the selected marketing strategies achieve its effectiveness and improve marketing of insurance services.
5.5 Limitations Of The Study
The researcher encountered various challenges that tended to hinder access to information sought by the study. The respondents approached were reluctant in giving information fearing that the information sought would be used to intimidate them or print a negative image about the insurance agencies. The researcher handled the problem by carrying with her an introduction letter from the University and assured them that the information they would offer would be treated confidentially and it was to be used purely for academic purposes.
5.6 Recommendation For Further Study
The study investigated the challenges affecting marketing of insurance services by insurance agencies in Nigeria, Kenya. A study should be carried out to establish the factors hindering promotion of insurance services .A further study should be carried out to establish the challenges facing advertising of insurance services in in insurance industry.
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