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MARKETING OF MOTOR INSURANCE POLICIES IN NIGERIA; PROBLEMS AND PROSPECTS
ABSTRACT
This research work focused on the Marketing of Motor Insurance in Nigeria; the problems facing and hampering smooth marketing of the policy in Nigeria, as well as motor insurance has in Nigeria. The motor insurance is one of the compulsory insurance in Nigeria (third party) under section 68 of Insurance Act 2003. The motor insurance marketing has been facing various challenges ranging from the issuance of fake certificate by much room cooperative societies and unfaithful insurance Agents and Brokers. In an attempt to solve the problems identified, the objectives of the research work was outlined which includes to examine the problems facing motor insurance marketing in Nigeria, to ascertain the effect of unethical practice of insurance intermediaries and others. Upon the stated objectives, the research questions were formulated. The researcher pointed out the significance of the research work as well as the scope and limitation of the study. Literatures relating to the topic under discussion were reviewed and the research methodology explained which show that the primary data and secondary data are the two major sources of data, the population and sample size wee obtained. The instrument used for data collection and investigation is the questionnaire. The researcher following the analysis and presentation of data collected were able to find out that motor insurance marketing has been facing various challenges and that governments are no doing well in enforcing compulsory 3rd party insurance. Following the finding, conclusions and recommendations for the way forward were made by the researcher.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Loses and risks are inevitable but human societies have created novel ways of reducing the burden of loss, the most effective being insurance.
Insurance is a means whereby a person pays some of money called premium in order to indemnify self against loss of a belonging with much more than the premium. When the belonging being indemnified is the motor vehicle, such insurance is called motor insurance or vehicle insurance. In Nigeria, there are two types of motor vehicle insurance offered by most insurance companies in Nigeria namely third party and comprehensive cover.
One of the major requirement to drive on Nigerian roads is the possession of a minimum of third party motor insurance certificate. Section 68 of the 2003 insurance Act states “No person shall use or cause or permit any other person to use a motor vehicle on a road unless a liability, which he may thereby never in respect of damage to the property of third parties is insured with an insurer registered under this Act”.
However, most of the vehicles in the country either ignorantly in out of consciousness have continued to carry fake certificates about. The National Insurance Commission has said that over 70 percent of vehicles on Nigeria roads are in possession of fake insurance vehicle certificate and this was attributed to ineffective motor insurance marketing in Nigeria.
The motor insurance marketing in Nigeria has been on the back logged because of various factors which are generally problems facing the insurance industry in Nigeria which are delayed settlement of genuine claims, low level of regularly compliance; absence of new products, delayed remittance of premium by intermediaries, in road of banks into the industry moral hazards and sharp practices, government’s policy inconsistency, weak regularly measures, illegal commission and rebates, etc. This research work is designed to examine the marketing of motor insurance in Nigeria, problems facing it and the prospect.
1.2 STATEMENT OF THE PROBLEM
1. The delay in remittance of premium by intermediaries to the insurance companies.
2. Government’s policy inconsistency; which results in the general public not knowing the suitable cover for a particular vehicle.
3. Delayed settlement of genuine claims by the insurance companies.
4. Absence of new products. The insurance industry has failed to design products that will suit the economic conditions of Nigerians who own vehicles.
1.3 OBJECTIVES OF THE STUDY
1. To examine the problems facing the marketing of motor insurance policy in Nigeria.
2. To find out the effect of delayed/non-remittance of premium by intermediaries on the motor insurance marketing.
3. To ascertain the role of government and NAICOM in regulating and monitoring motor insurance business.
4. To know the implication of improper/inadequate product/new product development by the insurance industry in the development of motor insurance in Nigeria.
1.4 RESEARCH QUESTIONS
1. Does delay in remittance of premium by intermediaries to the insurance companies have impact on the marketing of motor insurance?
2. What effect ahs the inconsistence on the government policy on the motor insurance marketing in Nigeria?
3. Why is the insurance industry not encouraged to innovate products on the motor insurance policy to hence the consumer patronage?
4. What are the roles of National insurance commission in regulating the premium charge on the motor insurance business in Nigeria?
5. Do delay claims settlements of genuine claims by the insurance industry contributes to the general public apathy on the insurance marketing in Nigeria?
1.5 SIGNIFICANCE OF THE STUDY
The significance of the research work is largely based on the identified objectives which the research is aimed at solving. The research work is of specific importance to all stakeholders in motor insurance in Nigeria, which includes; the policyholder, government, insurer, the general public, the intermediaries, the investors and students at large.
The research work is of great important to the general public (3rd party) in that it will enable them know their right, against the insurance company and policyholders when they sustained injury, damage to properties caused by the vehicles.