DEVELOPMENT OF NEW PRODUCT IN NIGERIA INSURANCE INDUSTRY

Thesis Overview

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 has been written about new product development in insurance. According to medium, new product development in the insurance industry are not subject to copy right they still represent an important method of stimulating growth of the industry. Insurance products determine the competitive behaviour of the insurance companies and the structure of insurance market. The main focus of marketing activities of most insurance of customer needs. Insurance policies or products have been categorized into two broad groups. 1.   Those products/policies which provide protection; 2.   Policies which provide protections and investment. These two types of major conventional product are fund in life assurance policy. In products/policies which provide protection the policy holder is given protection for a limited period of 10 – 15 years. Convertible term is a variation where the policy holder is given the option to convert to another type of policy at any time during the policy terms 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 need of the insuring public. 1.2 STATEMENT OF THE PROBLEM The problems which are intended to be solved in this research work include the followings: 1.   Development of new products has taken sometimes in the insurance industry without much results; 2.   To determine the reason fro the slowness of the modification of existing products and innovation; 3.   To know the reason for the aggressive competitiveness the insurance industry. 1.3 OBJECTIVES OF THE STUDY Based on the identical problems as eh insurance industry increase, new products insurance the study to designed to: 1.   To ascertain whether new products differ from old products; 2.   To ascertain the level of efficiency of new insurance products; 3.   To find out the major problems in the marketing of new products in the insurance industry; 4.   To find out the effects of new products on the insurance industry. 1.4 RESEARCH QUESTIONS The research questions which are pertinent to this project research include: ·         Are there any need for the development of new product in insurance? ·         Do the existing products satisfy the buying needs of the people? ·         Are there products which need modification or outright rejection? ·         Who are responsible for the modification or development of new products in the insurance company? ·         Does the re-packing of new insurance products affect the existing ones? 1.5 SIGNIFICANCE OF THE STUDY The research work will of immense benefits 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 insurance public will find this research work useful as it highlights the effect of introducing new insurance products into the insurance market. Furthermore, this 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 Scope The study focused attention on the new product development in three insurance companies based in Enugu selected randomly. Limitation In het course of this study the researcher encountered many obstacles among which are time, lack of fund and so on. The time allows to write this report was too short and it cut in time for other academic activities. Lack of fund prevent the author from traveling to many places to source for materials. Research materials were other problems. Poor response from the respondents is another problem. Many of the staff met feared that if hey give full information their employer might victimize them. 1.7 DEFINITION OF OPERATIONAL TERMS 1.   Claims: This is the demand made by the insured for payment of benefits following a loss. 2.   Fraud: An unlawful means of acquiring financial advantage of the expense of others. 3.   Insured: A person or persons named under an existing policy as being covered by an insurance. 4.   Under Writing: This is assessment of a risk to know whether it will be acceptable or not. 5.   Moral Hazard: The bad moral behaviour of an individual. 6.   Policy: An evidence of insurance contract. 7.   Premium: The consideration which the policy holder pays fro being covered under an insurance contract. 8.   Double Insurance: Where two or more policies are affected by or on behalf of the insured on some adventure. 9.   Liability: A situation under which a person is made to pay for certain thing whether voluntarily or by the force of low. 10. Warranty: A condition in a policy that states expressly or impliedly the circumstances under which an insured can be compensated under a policy.