1.1. Background of the Study.
A study of insurance history reveals that insurance practice arose from the need to protect against certain perils at each stage of human development. A contract of insurance in the widest sense of the term may be defined as a contract whereby one person called the insurer, undertake in return for an agreed consideration called the premium to pay to another person called the insured, a sum of money or its equivalent on the happening of a specified event… where the payment of the money or other benefits is discretionary the contract is not one of insurance (Ivamy 1979).
The practitioners and buyers of insurance agrees to transact the business out of the recognition of the mutual benefits the two parties derives from the practice. Insurance from certain points of view is a peak accomplishment in the long series of organizational mechanism to which men have devoted their creative talents down through centuries of social evolution (Hansel 1974). Insurance is designed to serve the individual in the society where each member is presumed to be economically self reliant. The insuring public and insurers operated with some degree of risk in the absence of statistical data on which to base premiums and lack of past performances from the insurers. Insurers constantly monitor the security needs of the society and seek ways and means by which insurance cover can be arranged and to provide protection for those needs without endangering their own security.
In the process of providing security for the insuring public, some secondary roles develop which eventually enhanced the practice and development of insurance in the world. Some of these functions includes: Risk management or the analysis and control of risk, the encouragement and promotion of business enterprises through the investment of insurance premiums. For example, in Nigeria, insurance funds contributions in the economy is in excess of N500 billion (Meidan, 1984).By offering financial security to individuals and corporate organizations, the insurance industry encourages and promotes development. Majority of large scale projects embarked upon in the country today are made possible because of the availability of insurance cover.
In addition to the above, the assurance of compensation in the event of a loss provides security and peace of mind so that management time can be devoted to productive ventures without which there cannot be any substantial progress. In Nigeria, insurance business in its modern practice started in 1921 with the establishment of a branch of the Royal Exchange Assurance. The British insurers had appointed agents to represent their interest in Nigeria. These agencies later gave way to full branches representing various insurers from United Kingdom. Private Nigerian investor who ventured into insurance business later could not compete effectively with those foreign owner companies due to various reasons of which include inadequate capital base, lack of requisite technical knowledge and non-provision of proper training facilities among others.
The public image of the industry was not very encouraging mainly due to the fraudulent practice of certain insurance practitioners and the inability of the average individual to comprehend the intricacies of insurance practice. Today some people are still skeptical about the willingness and ability of Nigerian insurers to meet its contractual obligations in the event of a loss. The image problem in the Nigerian insurance industry cannot be effectively tackled without adequately understanding the source of the problem. A good diagnosis of the ailment would provide the knowledge required to guide any action aimed at solving the problem. Peter M. Latam, the great philosopher who lived between 1789 and 1875 is of the opinion that the diagnosis of a disease is often difficult and impossible but we should always presume the disease to be curable until its own nature proves it otherwise (Ogunkanmi 1992). Certainly, the image problem of the insurance industry is curable.
1.2. Statement of Research Problem
In Nigeria, as old as the insurance industry is, public attitude to insurance and its practitioners is one of suspicion, very often manifested in outright distrust of what insurers do. But for the fact that some classes of insurance are made compulsory by law, very few Nigerians would have nothing to do with insurance companies. This is a dangerous disposition to the industry by the public such that a hitherto careless industry has of late realized its complications to the health of its members and by extension; the entire industry has begun implementing some counter measures .
Improving the image of the industry has become a marketing imperative considering the significance of the issue of enhancing the public image of insurance with the likely background of an unpredictable economic, social, cultural, political, legal, and marketing setting within which managers may be forced to make certain decisions. Now there is an urgent need to promote insurance awareness through Public Relations strategies and to eliminate some of the common misunderstandings and conceptions about the purpose and functions of insurance which generally contribute to the real and imagined poor public image of the insurance industry. The Nigerian public distrust of insurance companies for being quick to collect premiums and slow in paying claims seems to be an erroneous impression created by the communication gap between the insurer and the insured (Idigo,1991). The lack luster performance of the industry in Nigeria as a whole and in Enugu State in particular confirms the unsuccessfulness of these organizations.
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