This study investigates the determinants of the effect of consumer behaviour on insurance business in Nigeria.  It analyze the interpretation of data collection from respondents.

The research questionnaire was drawn to get data from banking, civil service, self employed, married/single and divorced.  The result of the questionnaire was used for a positive correlation co-efficient which means that consumer perception about risk influences the desire to buy insurance.

The study recommends the price of insurance significantly  affect the proportion of income spent on insurance consumers.

TABLE OF CONTENT                                                                             Pages

Title Page                                                                         i

Certification                                                                     ii     

Dedication                                                                       iii

Acknowledgment                                                              iv

Abstract                                                                           v

Table of contents                                                              vi


1.0   Introduction                                                             1-4

1.1   Statement of the problem                                         4-6

1.2   purpose of study                                                      6-7

1.3   Research question                                                    7-8

1.4   Research hypothesis                                                8-9

1.5   Significance of the study                                           9-10

1.6   Scope of Study                                                         10-11

1.7   Limitation of Study                                             11-12

1.8   Definition of Terms                                                   13



2.0   Introduction                                                             14-15

2.1   Historical Background of Insurance in Nigeria          15-16

2.2   Characteristics in Insurance Science                        16-19

2.3   Role of Insurance in an Economic Redeployment1    19-22

2.4   The Concept of Consumer Behaviour                        22-23

2.4.1 Consumer Buying Decision Process                         23-28

2.4.2 Determinants of consumer Behaviour                     28-25

2.4.3 Factors Affecting Consumer Behaviour                    35-36

2.5   The Buying Decision Making Unit                           36-40

2.6   Bases for Market Segmentation                               41-42

2.7   Factors Contributing to Buying Behavior of

        Insurance in Nigeria                                                 42


CHAPTER THREE: Research methodology

3.0   Introduction                                                             47-48

3.1   Research                                                                  48

3.2   Restatement of Research Question                           48-49

3.3   Restatement of Research Hypothesis                        49-50

3.4   Research Design                                                      50-51

3.5   Research of Study                                              51

3.6   Research Instrument                                                51-52

3.7   Data Analysis                                                           52

        References                                                               53

CHAPTER FOUR:    Data Analysis and Interpretation

4.0   Introduction                                                             54

4.1   Analysis 1 Demographic Information                        55-59

4.2   Analysis 11                                                              59-66

4.3   Testing of Hypothesis                                               66-73

        References                                                               74

CHAPTER FIVE:      Summary of Findings, Recommendations, and Conclusion

5.0           Summary of Findings                                       75-76

5.1           Recommendations                                            76

5.1.1        Aggressive Awareness                                       76-77

5.1.2        Improved Economic Situation                           77

5.1.3        Improved Claims Management                         77

5.1.4        Introduction of Micro-Insurance Products         77

5.1.5        Aggressive Marketing Strategies                       77-78

5.1.6        Improved Technological Innovation                  78

5.2           Conclusion                                                       78

5.3           Suggestions for Further Studies                       78





The aim of marketing is to meet and satisfy target consumers’ needs and wants. The field of consumer behaviour according to Kotler (2003) studies “how individuals, groups and organization select, buy, use and dispose of goods, services, ideas or experiences to satisfy their needs and desires”.

Marketing theories and practices according to Osuagwu (2002) have much to learn from the behavioural sciences but preoccupation with techniques may tempt marketers to ignore the real world situations. Halbert (1965) states that “behaviuoral sciences’ contribution lies in the fact that they require learning to take explicit account of the human social aspects of individual and groups engaged in the marketing behaviour rather than specific tools, techniques or ideas”. Through the behaviuoral science contributions, marketers have come to know that people tend to obey the pleasure pain – principle, using the former and avoiding the latter. A person’s value is as conditioned by his behaviuor as much as that of people around him.

Therefore, any organization unable to provide goods and services that fulfill the needs and wants of consumer has lost its basic reason of distance. This is the crux of marketing concept, which encouraged organization to be consumer oriented in order to survive in a competitive environment.

Consumer behaviour then ”is the behaviour customers or clients display in searching for, buying, using, evaluating and disposing of products, services and idea which they expect will satisfy their needs and wants.  This then makes consumer behaviour a study of how individuals make to spend their resources on consumption related items and their evaluation of such purchase decisions.

However, the service nature of insurance even makes the study of consumer behaviour very important. Insurance according to Oyetayo (2001) can be defined “as the contractual agreement between two parties called insurer and insured whereby the former promises to indemnify the industry that suppose to the virile aspect of any economy has been relegated to the background, this is  however unconnected to the bad consumer attitude towards the purchase of insurance. 

The success of any economy is majorly traced to the performance of its industries and business, however, for these industries and businesses to attain good performance, there must necessarily be a good security system to secure lives and properties. Okwo (2005) describes insurance “as the handmaiden of commerce  and industry, suggesting that modern commerce and industry cannot function efficiently without a well planned and organized insurance system.  Moreover, success of the first world countries cannot but be traced to the their well organized security system (insurance) and effective and efficient buying behaviour of the insuring public which has made the business of insurance the forerunner of other industries. 

However,  this research work shall consist the

(a)    The study of consumer behaviour of the insuring public in Nigeria

(b)    Approaches of consumer behaviour

(c)     Factors affecting consumers’ attitude

(d)    Levels of business behaiour in Nigeria.

(e)     Consumer decision – making processes in insurance industry and

(f)      Stages of the buying decision process in insurance


The attitude of insuring public towards the purchase of insurance products/services has affected the industry in no small measure. Despite the numerical growth and to some extend, expansion in the insurance industry in Nigeria, the insurance market requires a through empirical investigation to determine the cost structure and optimal production levels in which an insurance company can efficiently operate.

Poor perception of insurance service in Nigeria is worrisome. Most insuring public do not believe in insurance. Religious believe that only God insures have affected the industry. They see no reason in buying insurance products or services.      

The level of illiteracy also have a negative effect on the buying behaviuor of insurance services. Illiterate according to Oxford Advance Dictionary (6thedition ) “ is somebody or person not knowing how to read and write” But insurance illiteracy goes beyond this reason, even those who know how to write and read still find it difficult to understand what insurance entails, its benefits and importance to individuals and society at large.

The conservative attitude of insurance companies leading to lack of awareness is also worrisome.  There is nothing like aggressive marketing or advertisement to insuring public and also educate them about the workability benefit of insurance services.

Low participation by government and its parastatals also contribute to low consumer’s attitude towards insurance products or services. Government parastatals like NAICOM (National Insurance Commission) can also support the insurance companies in the public enlightment of insurance so as to increase the clients’ base in the industry.

Bad claim experience also has its own negative effect in the industry.  The insurance companies were accused of not paying genuine claims.  This had also contributed to the attitude in the industry.  Whatever name the insurance industry has today was definitely given by those who had been victims of some dubious insurers who defaulted in paying genuine claim at one time or the other.  To streamline insurance business activities and stem the upsurge of the mushroom insurance  companies, insurance capital base was raised from to N2 million, N3, million and N10 million for life business, general insurance business and reinsurance businesses respectively, leaving the industry with 58 registered insurance and reinsurance companies from about 152 insurance and reinsurance companies prior the consolidation exercise.


The purpose of this study are as follows;

(a)     To find out effect of consumer attitude towards insurance business by the insuring public

(b)     To find out if the price of insurance will significantly affect the proportion of income spent on insurance products/services by the consumers.

(c)     To investigate the attitude of consumer towards the insurance business. 

(d)     To find out effect of low patronage of insurance products by the insuring public

(e)     To investigate various perception of consumers towards buying insurance policies

(f)       To identify various objectives of insurance companies towards consumers.

(g)     To find out various needs and wants of insuring public and proffering solutions on how to meet these needs and wants

(h)    To investigate government control on protecting the consumers/clients

(i)       To find out the effect of innovation on consumer buying behaviour


The research questions are as follows.

(a)    Does the behaviour of consumers have any negative impact on the insurance business?

(b)   Does price of insurance significantly affect the proportion of income spent on insurance by the consumers?

(c)    What are the attitude of consumers towards insurance business?

(d)   What impact does low patronage of insurance products has on insurance business in Nigeria?

(e)    What are the perception of consumers towards buying insurance policies?

(f)     What are the objectives of insurance companies towards consumers insuring public?

(g)    What are the various needs and wants of insuring public?

(h)   What are the effects of introducing of government control?

(i)     What are the effects of product innovation on consumer buying behaviour.


The text for the primary statement are as follows

Ho:   Consumer perception about risk does not influence the desire to buy insurance.

Hi:    Consumer perception about risk influence the desire to buy insurance.

Ho:   The price of insurance does not significantly affect the proportion of income spent on insurance by the consumers.

 Hi:   The price of insurance significantly affects the proportion of income spent on insurance by the consumers.

Ho:   Technology innovation does not have significant impact on the buying behaviour on consumers.

Hi:    Technology innovation does have significant impact on the buying behaviour on insuring public.


The significance of the study are stated below

(a)  The study will help identify various behaviour of insuring public towards the purchase of insurance product.

(b)  The study will help to find out the impact of pricing on the purchase of insurance products.

(c)  The study will provide explanations and reasons for changing of consumer attitude towards insurance products.

(d)  The study will investigate various perception of consumers towards buying of insurance policies.

(e)  The study will improve the essence of market segmentation

(f)  The study will establish reasons for adequate service delivery

(g)  The study will effect a remarkable change of identify consumer needs and providing such needs

(h)  The study will investigate reasons for low patronage of insurance products. 

(i)  The study will provide solutions to insurance companies on ways on identifying or studying consumer’s attitude towards insurance products.

(j)  The study will investigate effect product innovation will have on consumer buying behaviour

(k)  to advice the government on various ways the insuring public can be protected. 


The scope of the study shall the buying behaviour of insuring public towards the purchase of insurance products in Nigeria. Insuring public like individuals and corporate organizations shall be targeted. Their attitude towards insurance products and insurance industry shall be investigated.


Due to time and financial constraints, the study shall be limited to Lagos State. The research shall also take into cognizance buying behaviour of insuring public (individual & corporate organizations) in Lagos mainland of Yaba and Alimosho Local Government Areas) The choice of Lagos State is due to the fact that it is the commercial nerve centre of the country and therefore information gathered shall be relevant for the further study of this research.


INSURANCE:- This is the contract between two parties whereby one party known as the insurer promises to indemnify the other party known as the insured, consequent upon the loss of an insured contingency, with an exchange of consideration known as the premium.    

INSURER:- The party to the insurance contract who promises to pay losses or benefit to the other party (insured) in financial loss suffered.

INSURED:- A person with an insurable interest who stands to benefit a policy of insurance or a person or organization covered by insurance policy including the “named insured” and any other parties for whom protection is provided.

INSURING PUBLIC: Individual organizations who need one class of insurance or the other to protect any financial loss caused by the insured peril.

SECURITY: Is the protection or cover that is given to a person or property through the purchase of insurance policies.

CLAIMS:- A request for payment of the sum insured following the event insured against.

CONSUMER BEHAVIOUR:- Is the behaviour customers or clients display in searching for, buying, using, evaluating and disposing of products, services and ideas which they expect will satisfy their needs and wants.

PATRONAGE:- To receive a regular and or continuous purchase of products or to be regular purchase of a product.    

INDEMINITY:- A security against financial loss. It is designed to place the insured in the same financial position as he was immediate before the happening of event insured against.




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