THE DEVELOPMENT OF NEW PRODUCT IN NIGERIA INSURANCE INDUSTRY: PROBLEMS AND PROSPECTS

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ABSTRACT

This work discusses the development of new products in Nigeria insurance industry. A hundred and twenty questionnaires were distributed among employees from selected Nigeria insurance companies. Interviews and surveys were also conducted. Primary and secondary data will be used in the analysis. Tables and percentages will also be used as the instrument of analysis. It will be observed therefore that the development of new products have a strong and significant impact in Nigeria insurance industry.

 

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Insurance business is comparatively new in Nigeria, even though it has been in existence for a long time in Europe. In this regard, not much have been written about new product development in insurance.

According to medium, new product development in the insurance industry are not subject to copyright they still represent an important method of stimulating growth of the industry. Insurance products determine the competitive behave our of the insurance market. The main focus of marketing activities of most insurance of customer needs.

Insurance policies or product have been categorized into two broad groups.

Those product/policies which provide protection policies and investment.

These two type of major conventional product are found in the life assurance.

In products/policies which provide protection the policyholder is given protection for limited period of 10-15 years. Convertible term is a variation where the policyholder is given option to convert to another type of policy at any time during the policy term even if his death deteriorates.

Policies which provide a mixture of protection and investment include profit participating endowment and whole life policies. To remain competitive insurance companies have developed a large number of products. Product development means modifying the existing products or developing new ones to suit the insuring public.

1.2 STATEMENT OF PROBLEM

The problems which are intended to be solved in this research work include the followings

 Development of new product has taken sometime in the insurance industry without much result.

 To determine the reason for the slowness of the modification of existing product and innovations.

 To know the reason for the aggressive competitiveness in the insurance industry.

1.3 OBJECTIVES OF THE STUDY

Based on the identical problem as the insurance industry increase, new product, insurance increase study to designed to:

 To ascertain whether new product differs from old product.

 To ascertain the efficiency of new insurance product.

 To find out the major problem in the marketing of new products in the insurance industry.

 To find out the effect of new product on the insurance industry.

1.4 RESEARCH QUESTIONS

The research questions which are pertinent to this project include:

 Are there any need for the development of new product in insurance?

 Do the existing product satisfy the buying need of the people?

 Are there product which need modification or outright rejection?

 Does the re-packaging of ne insurance product affect the existing ones?

1.5 SIGNIFICANCE OF THE STUDY

The research work will be of immense benefit to the following persons:

The research work will provide a source of reference for current and future insurance statistician or historians who would wish to use volume of published data in insurance industry.

The insuring public will find this research work useful as it highlights the effect of introducing new insurance products into the insurance market.

Furthermore, the study will widen the knowledge of students who may embark on future research on product development.

Finally, this research work will create awareness to the general public (country) and educate them on the use of new insurance products.

1.6 THE SCOPE AND LIMITATION OF THE STUDY

THE SCOPE

The study focused attention on the new product development in three insurance companies based in Port Harcourt selected randomly.

LIMITATION

In the cause of this study there are many obstacles among which are time, lack of fund and so on. The time allow to write this report was short. Lack of fund in sourcing for materials research materials were other problems.

1.7 DEFINITION OF OPERATION TERMS

Claims: This is the demand made by the insured for payment of benefit following a loss.

Fraud: An unlawful mean of acquiring financial advantage of the expense of others.

Insured: A person or person named writer an existing policy as been covered by an insurance.

Underwriting: This is assessment of a risk to know whether it will be acceptable or not.

Moral hazard: The bad moral behavior of an individual.

Policy: an evidence of insurance contract.

Premium: The consideration which the policyholder pays for being covered under an insurance contract.

Double insurance: Where two or more policies are affected by or on behalf of the insured on some adventure.

Liability: a situation under which a person is made to pay f or certain thing whether voluntarily or by the force of law.

Warranty: a condition in a policy that expressly or impliedly the circumstances under which an insured can be compensated under a policy.

 

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