ABSTRACT
This research work,
the researcher examined the growth and contribution of life assurance business
in Nigeria. The information for
the study was collected using primary and secondary methods of data collection.
For the primary data collection, questionnaire was used while existing
literature relevant to the topic was consulted for the secondary data. The
sample size was determined using Taro Yamani formula the percentage method was
used for data analysis while Chi-square statistical mode was used to test the
formulated hypothesis. The researcher found out that Life
assurance companies in Enugu specializes in life assurance business but they
are experiencing inadequate patronage. Life assurance companies use brokers,
agents and partially employed salesmen in marketing of life assurance policy to
the insuring public. Based on the findings the researcher recommended that
Government should establish insurance educational centers which should organize
lectures, seminars, educational conferences and study programmes for the good
of the public.
TABLE
OF CONTENTS
Title
page i
Approval
Page ii
Dedication
iii
Acknowledgement
iv
Abstract v
Table
of content vi
CHAPTER ONE
INTRODUCTION
1.1
Background of the Study 1
1.2
Statement of the Problem 4
1.3
Objective of the Study 5
1.4
Research Questions 6
1.5
Research Hypothesis 6
1.6
Significance of the Study 8
1.7
Scope and Limitations of the Study 8
1.8
Definition of Operational Terms 9
CHAPTER TWO
REVIEW OF RELATED LITERATURES
2.1 Concept of life assurance 11
2.2 types of life assurance policy 12
2.3 Importance/contribution
of life assurance Business
in Nigeria economy 26
2.4 Factors
affecting the growth and Contributions of
life
assurance business in 31
2.5 Prospects of
effective marketing of life Assurance
business
in Nigeria 36
2.6
Various techniques of marketing life assurance
products in Nigeria 39
2.7 Strategies for
marketing life assurance products in
Nigeria
41
2.8 The
future of life assurance growth in Nigeria 43
Reference 46
CHAPTER THREE
RESEARCH METHODOLOGY AND DESIGN
3.1
An Overview 48
3.2
Source of Data 48
3.2.1
Primary data 48
3.2.2
Secondary data 49
3.3
Population of the Study 50
3.4
Sample size and Sampling Techniques 51
3.5
Validity and Reliability of the
Instrument 53
3.6
Method of data Presentation and
Analysis 54
CHAPTER FOUR
DATA PRESENTATION ANALYSIS,
DISCUSSION OF FINDING
4.1
An overview 56
4.2
Data presentation 56
4.3
Data Analysis 59
4.4
Testing of Hypothesis 69
4.5
Discussion of Findings 74
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION
AND RECOMMENDATIONS.
5.1
Summary of Findings 75
5.2
Conclusions 77
5.3
Recommendations 78
5.4
Suggestions for Further Studies 82
Bibliography
83
Appendix
I 85
Appendix
II 86
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The
development of life assurance can be traced back to as far back as 1983. It was
in this year that we have the first evidence of life assurance known today. A
policy was taken on 18th June 1985 on the life of William Gibbons
for a sum of 382. The contract was for twelve months and the money was to be
paid if Gibbons died within twelve months. He did infact died on 8th
may 1984. After a slight dispute over whether twelve months meant twelve
calendar months, the money was paid (Nwite, 2007).
Olufawo
(2005) states that, “today, we have thousand of life assurance policies issues
in Nigeria in form of whole life assurance, endowment assurance, term
assurance, joint life assurance etc. interestingly, in advanced countries, life
assurance business has become the greatest area of investment because it even
encourage savings.
Lerhari and Wesis (1974) state that, the
advantage for policy owner is “peace of mindâ€, in knowing that the death of the
insured will not result to financial hrardship for loved ones and lenders. It
is possible for life assurance policy payouts to be made in order to help
supplement retirement benefits.
In
Nigeria, pension business was handled for many years by insurers until a group
sold the idea of a contributory pension scheme to the government, which former
scheme (old state scheme) where pensioners could not get their pension
(benefit) after queuing for days led to the collapse of the old pension scheme.
The
repeal of the old pension act of 1979 and consequential amendment of the
Nigeria social insurance trust fund Act of 1993 brought in the new pension
Reform Act 2004. Today, the pension fund has grown tremendously and is in
excess of N1. 6 trillion, about 10times the premium of N164.5 billion recorded
in the Nigerian insurance sector in 2008 (Fola, 2012).
In
the present dispensation, the sector stands the chance to get boots from some
of the statutory policies set for enforcement. The workmen’s compensation
Decree of 1987 provided cover for permanent or partial disability, accident,
sickness and death of worker arising in the course of their employment. Section
9(3) f the Act state that “employers shall maintain life assurance policy in
favor of their employees for a minimum of three times annual total enrolment of
the employee, under the group life scheme.
According
to Aneke (2007) the pension Reform Act for 2004 delegate to the life in
insurers, but their share of the fund depends on their ability to win the
confidence of its huge population. Nigeria is the biggest life insurance market
on the continent. He opined that, it the country’s life assurance business is
well positioned it can attain a leadership position on the continent.
Therefore,
it is against this background that this research study will investigates the
growth and contributions of life assurance business in Nigeria.
1.2 STATEMENT OF PROBLEM
The
following problems led to the formation of this research work;
a.
Sub-standard policies designed by the
underwriter’s could not meet the current change in the society towards
satisfying individuals needs.
b. High
rate of poverty that result to on interest or concern by the individuals has
affected the development of life assurance policies Nigeria.
c.
The low demand for life assurance
policies has to greater extent affected the marketing of life assurance
business.
d. Studies
has shown that high rate of illiteracy is one of the major problems which
affects the growth of life assurance business in Nigeria.
1.3 OBJECTIVE OF THE STUDY
In
this study, the main objective is to examine the growth and contributions of
life assurance business in Nigeria. The specific objectives of this research
work include the following;
a.
To examine the effects of sub-standard
policies on the development of Life assurance business in Nigeria.
b. To
find out the extent at which high level of poverty in the country affects the
patronage of life assurance business.
c.
To examine the effect of low demand
for life assurance policies marketing of life assurance business
d. To
examine the effect of illiteracy on the growth and development of Life
assurance business in Nigeria.
1.4 RESEARCH QUESTIONS
a.
What are the effects of sub-standard
policies on the development of Life assurance business in Nigeria?
b. To
what extent does high level of poverty in the country affects the patronage of
life assurance business?
c.
What are the effects of low demand for
life assurance policies marketing of life assurance business?
d. What
are the effects of illiteracy on the growth and development of Life assurance
business in Nigeria.
1.5 RESEARCH HYPOTHESIS
H0: sub-standard
policies does not have any effect on the development of Life assurance business
in Nigeria.
H1: Ho: sub-standard policies has
significant effect on the development of Life assurance business in Nigeria
H0: High
level of poverty in the country does not negatively affected or the patronage
of Life assurance business in Nigeria.
H1: High
level of poverty in the country negatively affected on the patronage of Life
assurance business in Nigeria.
H0: Low
demand for life assurance policies does not have any significant effect on
marketing of life assurance business.
H1: Low
demand for life assurance policies has significant effect on marketing of life
assurance business.
H0: Illiteracy
does not have any effect significant on the growth and development of Life
assurance business in Nigeria.
H1: Illiteracy
does not have any effect significant on the growth and development of Life
assurance business in Nigeria.
1.6 SIGNIFICANCE OF THE STUDY
This
study on the growth and contributions of life assurance business in Nigeria 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
insured and the life assurance intermediaries will be able to identify the
problem militating against the effective marketing of life policy in the
society.
Finally,
it pointed out the need for marketers in 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 market.
1.7 SCOPE AND LIMITATIONS OF THE STUDY
This
study is on the growth and contributions of life assurance business in Nigeria using
African Alliance Insurance Plc, First life Assurance and Nicom Insurance Plc as
cases study.
In
the course of carrying out this work the researcher encountered some challenges
which are stated below:
Time:
In respect to the theoretical and practical work the time allowed for project
was very limited besides they were carried out with other academic assessment.
Finance: Due
to high rate of academic fees hampered the successful execution of this
research work.
1.8 DEFINITION OF OPERATIONAL TERMS
i.
Life
assurance: This is contract of insurance on party called
assurer and assured, the assured who agreed subject to some term and condition
ns that he would pay some money on the death of life assured on the precious
maturity of the policy.
ii.
Premium:
This
is the monetary consideration paid by the assured for insurance cover that is
the price of the insurance service rendered.
iii.
Policy
holder: A person who owns an insurance policy. It also
the owner of an insurance policy usually but not always the insured.
iv.
Endowment:
This is the combination of term assurance and pure endowment which stipulated
that if the life assured survives to the future agreed date the assured will
receive his benefit personally while alive.
v.
Policy:
A document showing an agreement you have made with an insurance company.
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