The Effect of Consumer Behavior on Insurance Business in Nigeria
Chapter One
Purpose Of The Study
The purpose of this study are as follows;
- To determine customers behavior on risk rehabilitation towards risk influence the buying behavior of life insurance
- To determine how perception of customers determine buying decisions of insurance
- To determine if Income significantly affect buying decisions of life insurance
- To determine if prices discount affects consumer behavior towards insurance in Nigeria
- To examine if Culture influence significantly the buying behavior of life insurance
CHAPTER TWO
LITERATURE REVIEW
INTRODUCTION
This chapter is dedicated to different literature reviews and prior empirical study reviews tries to elaborate and support the idea of the study. Thus in order to have a complete understanding about the study has been organized in three bigger topics: theoretical background on basic concepts, empirical review from previous studies and the conceptual framework and their respective definition of terms.
Insurance is a financial arrangement that redistributes the costs of unexpected losses. Insurance involves the transfer of potential losses to an insurance pool (Dorfman, 2009).
According to (Zeleke,2007), citing Pritchett et al defined insurance as a social device in which a group of individuals (called “insured’s”) transfer risk to another party (called the “insurer”) in order to combine loss experiences, which permits statistical prediction of losses and provides for payment of losses from contributed (premiums) by all members who transferred risk.
Article 654(2) of Commercial Code of Ethiopia provides a legal definition of insurance as follows: an insurance policy is a contract where by a person called the insurer undertakes against payment of one or more premiums to pay a person, called the beneficiary, a sum of money where a specified risk materializes. Life is full of uncertainties. Unexpected events an important mechanism that protects against risk is purchasing insurance to guarantee the benefit in the event of certain financial loss due to occur death or accident (Beck and Webb, 2002).Consumer buyer behavior refers to the buying behavior of final consumers, Individuals and household who buy goods and services for personal consumption.” (Armstrong &Kotler, 2003, p. 128).
THE CONCEPT OF CONSUMER BEHAVIOR
Consumer Behavior is the study of individuals, groups, or organizations and the processes they use to select, secure, use and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.Defined Consumer behavior in an advanced way as “the totality of consumers’ decisions with respect to the acquisition, consumption, and disposition of goods, services, time, and ideas by human decision-making units (Hawkins and Mothersbaugh, 2010).
What Affects Consumer Behavior
The many factors that affect acquisition, usage, and disposition decisions can be classified into four broad domains the psychological core, the process of making decisions, the consumer’s culture, and Consumer behavior outcomes.(Hoyer &MacInnis ,2008).
The Psychological Core: Internal Consumer Processes
Before consumers can make decisions, they must have some source of knowledge or information upon which to base their decisions. This source—the psychological core— covers motivation, ability, and opportunity; exposure, attention, and perception; categorization and comprehension of information; and attitudes about an offering. (Hoyer &MacInnis, 2008).
Social factor: Social factor divides the society into a hierarchy of distinct classes. The members of each class have relatively the same status and members of other classes have either more or less status. It includes family, group etc. (Hoyer &MacInnis, 2008).
CHAPTER THREE
METHODOLOGY
Research Design
The study adopted descriptive research design. This is because the aim of this study is to describe the effect of Consumer Behavior on Insurance Business in Nigeria with regarding like attitude, perception, income, price, culture.
Population
Population for this study focused in National Insurance Commission Customers in Lagos as the target population of the study. In Lagos there are higher number of customers, and availability of data for the purpose of this study.
CHAPTER FOUR
DATA ANALYSIS, INTERPRETATION AND PRESENTATION
introduction
Chapter four describes the data analysis and interpretation part. The researcher planned to use multiple regression but shift to descriptive analyses because the model fitness problem. When tested after data are collected and tested, it does not fit, and in the researcher proposal theirs hypotheses to in our plan but unable to test it for the same reason. This section tried to make analysis, interpretation and presentation on the response rate of the research instrument, the descriptive and differential statistics of life insurance consumers response aided by SPSSS version20.
CHAPTER FIVE
SUMIMRY OF FINDING, CONCLUSIONS AND RECOMMENDATIONS
introduction
The basic aim of this chapter is to present the overall overview of the research by summing the main findings of the analysis part and give recommendations. Accordingly, the chapter briefly sums up the overviews of the study and its main findings
Conclusions
The study aims to examine the effect of consumer behavior on insurance business; between different variables and the buying intension of Life insurance buying behavior and its main determinants and their statistical significance. Based on the analysis made in previous chapter on factors that determine life insurance buying behavior is the following conclusions are drawn.
There is significant positive relationship between income and buying behavior of life insurance. In this situation, as income rises, insurance become more affordable. This study find out that the most important factor that influence for life insurance buying behavior. Similar to, the correlation showed positive and strongly statistically significant relationship between life insurance buying behavior intention and level of income.
There is a significant positive relationship between premium and the determinant factor of life insurance buying behavior. Similar to the description and correlation showed positive and statistically significant relationship between life insurance buying behavior and each variable.
There is a significant positive relationship between attitude and the determinant factor of life insurance buying behavior. Similar to the correlation, the descriptive showed positive and statistically significant relationship between determinant factors of buying behavior of life insurance buying behavior. The positive relationship between attitude and life insurance buying behavior implies that higher increases life insurer‘s investment returns and profitability, it ultimately leads to high life insurance demand.
Premium is an important factor that determined of life insurance buying behavior. Perception level has led to greater awareness and understanding of the role of life insurance. Similar to the correlation result showed positive and strongly statistically significant positive relationship between determinant of life insurance buying behavior and level customer perception. If it the customer perception is positive it assume that it has greater awareness and understanding of the benefit of life insurance, therefore another factor that has driven the increasing demand for life insurance buying. Because people who have positively perception the product benefit they are willing to buy the life insurance policy.
Recommendations
The positive relation between customer’s perception and life insurance buying behavior implies that life insurance companies should have to do more in creating awareness to the general public.
Thus, the Central Bank of Nigeria and the managements of insurance companies should further enhance public‘s awareness and financial literacy by using different approaches. For example they should use media, internet and billboard as a medium of promoting the life insurance and made a program such true story regarding the life insurance benefits. This program will give big picture to society about how important the life insurance is to their family as extra saving to the future use a, health, education and financial losses.
Understanding of regulatory authority should be improved on life insurance, especially CBN; since the sector have a great importance for the economy. CBN should have to give much attention for the development of this sectors.
References
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