Effect of consumer buying behaviour on the purchase of insurance products

Project Abstract

Consumer buying behavior plays a crucial role in the insurance industry as it directly impacts the purchase of insurance products. Understanding the factors that influence consumers in this sector is essential for insurance companies to develop effective marketing strategies and tailor their products to meet customer needs. This research aims to explore the various elements of consumer buying behavior that influence the purchase of insurance products. The study utilizes a mixed-methods approach, combining qualitative and quantitative research methods to gather comprehensive data. Through surveys and interviews with insurance customers, the research investigates the key factors influencing their decision-making process when purchasing insurance products. These factors include personal preferences, perceptions of risk, past experiences, and trust in insurance companies. The findings reveal that consumer buying behavior in the insurance sector is influenced by a combination of rational and emotional factors. While rational factors such as price, coverage, and product features play a significant role in decision-making, emotional factors like trust, brand reputation, and psychological motivations also heavily influence consumer choices. Understanding these dual influences is essential for insurance companies to effectively target and attract customers. Moreover, the research highlights the importance of customer service and communication in shaping consumer perceptions and behaviors. Good customer service, clear communication of product benefits, and transparent pricing structures are key factors that can positively impact consumer buying behavior in the insurance industry. Conversely, poor customer service, lack of transparency, and ambiguous policy terms can deter customers from making a purchase. Overall, the study provides valuable insights into the complex nature of consumer buying behavior in the insurance sector. By understanding the factors that influence customer decisions, insurance companies can better tailor their products and marketing strategies to meet consumer needs and preferences. This research contributes to the existing literature on consumer behavior in the insurance industry and offers practical implications for insurance companies seeking to attract and retain customers in a competitive market.

Project Overview

<p> </p><p><strong></strong></p> <p><strong>INTRODUCTION</strong></p><p><strong>1.1 &nbsp;BACKGROUND TO THE STUDY:</strong></p><p>The role of motivation on the productivity of employees in any organization cannot be overemphasized. Now, research on the subject of motivation has advanced greatly in western countries; this cannot be said for developing economies like Nigeria (Ituma et al, 2011).</p><p>The goal of employee motivation is to achieve organizations goals through employee creativity. Since one of the organization’s goals is customer satisfaction, it is important that in this era of globalization, where intense competition is rife, there is need to motivate employees in order to be able to respond quickly to changes in the business environment.</p><p>Motivation is a basic psychological process along with perception, personality, attitudes, and learning (Tella et al, 2007; Aworemi et al, 2011); Motivating is the management process of influencing behaviour based on the knowledge of what make people encouraged to work. Effective motivation is way of stimulating people such that they become satisfied with and committed to their jobs (Inyang, 2011).</p><p>It is however agued that, insurance service being an intangible, heterogeneous, perishable, service product, produced and consumed simultaneously, only motivated employees can seek to differentiate themselves from their rivals by treating customers in the way they would want to be treated, thereby attaining the quality service that enhance organizational performance.</p><p>To many customers and potential insurance consumers in Nigeria, whom insurance service is a technical product, the first contact persons (employees) represent the insurance company. If these employees are able and satisfactorily meet their needs, they are not only satisfied, but would become emotionally attached to the company. Insurance is a variable service product, where customers are involved in the production and consumption of the service. Imagine frontline employees in Nigerian insurance industry, such as sales representatives, underwriters, claim handlers, being motivated to use their initiative in decisions regarding work schedules, terms and conditions of cover, risk exceptions and exclusions, underwriting requirements and claim settlement, there would be increased trust, customer-employee positive relationship, customer satisfaction and increased productivity.</p><p>Motivation is an art targeted to getting people work willingly, and an art of inducing one to behave in a particular manner to achieve a task. Mee-Edoiye and Andawei (2002) viewed motivation as a human engineering approach being triggered by the individual needs. Flippo (1982) defined motivation as a psychological process initiated by the emergence of needs involving a goal directed action and behavior aimed at satisfying a particular desire. It is the inducement given to workers for higher output. Motivated behaviour has three basic characteristics:</p><p>1. It is sustained – it is maintained for a long time until satisfied.</p><p>2. It is goal-directed – it seeks to achieve an objective.</p><p>3. It results from a felt need – an urge directed towards a need.</p><p>Employee productivity according to Akindele (2003) is defined as labour output per day (man-day). This is often reduced by delayed, unclear or inadequate instructions, provision of poor tools and equipment, unbalanced work gangs, use of working method, lack of incentives, and failure to delegate authority from senior to lower level supervisors (Heap 1987). The productivity of individual employee, which in turn affects the productivity of a company, is a very important parameter to watch as it measures an insurance company’s competitive power. It is an indicator of a firm’s profit margin, a measure of the firm’s survival in business, a yardstick for remuneration of employees, and a means of recognition of hard work. It against this backdrop that this research study will examine the “effect of Motivation on the Productivity of Employee of Insurance Companies” with a special reference to AIICO Insurance Company Nigeria Plc.</p><p><strong>1.2 &nbsp; STATEMENT OF THE PROBLEM:</strong></p><p>There are divergent opinions on employee attitude towards motivation and the impact on employee performance. In the past, employers of labour have been complaining that employees perform their work efficiently when they are newly employed but with time, their efficiency and productivity decreases. Based on literature review, employees have attributed decrease in efficiency and productivity to the fact that employers do not provide adequate motivation to enable them put in their best.</p><p>Productivity suffers a lag if motivations are poor or inappropriately used. The use of various incentives to motivate staff should be adequate and appropriate to enable employees put in their best, in order to survive in a profitable way in the highly challenging and competitive Nigerian insurance market.</p><p>Among the factors of production the human resource constitutes the biggest challenge because unlike other inputs employee management calls for accomplished handling of thoughts, feelings and emotions to ensure highest productivity. Sometimes employers in the insurance industry in Nigeria fail to implement a tactical tool built on motivation in accomplishing their mission and vision. Even when they understand the significance of motivation, they lack the skill and knowledge to provide a work environment that fosters employee motivation.</p><p>It is in the view of this, that this research is being carried out to examine the &nbsp;“Effect of Motivation on the Productivity of Employees of Insurance Companies” with a special reference toAIICO Insurance Nig Plc.</p><p><strong>1.3 &nbsp; OBJECTIVES OF THE STUDY:</strong></p><p>The major objective of this study is to examine the effect of Motivation on the Productivity of Employees of Insurance Companies. While other specific objectives include;</p><p><strong>1.</strong>To assess the effect of motivation on the productivity of employees of insurance companies.</p><p><strong>2.</strong>To examine the effect of reward system on employee performance.</p><p><strong>3.</strong>To determine the effect of job incentives on the commitment of workers to their organisations.</p><p><strong>4.</strong>To examine the relationship between motivation and organizational profitability.</p><p><strong>5.</strong>To find out the effect of employees participation in decision making on organizational efficiency.</p><p><strong>6.</strong>To provide plausible recommendations on the effect of motivation on the productivity of employees of insurance companies.</p><p><strong>1.4 &nbsp; RESEARCH QUESTIONS:</strong></p><p>The undertaking of this research project will beam a searchlight on the following research questions;</p><p><strong>1.</strong>Does motivation has effect on the productivity of employees of insurance companies?</p><p><strong>2.</strong>Does reward system have any effect on employee performance?</p><p><strong>3.</strong>What is the relationship between job incentives and the commitment of workers to their organisations?</p><p><strong>4.</strong>Does motivation has effect on organizational profitability?</p><p><strong>5.</strong>What is the effect of employees participation in decision making on organizational efficiency?</p><p><strong>1.5 &nbsp; &nbsp;RESEARCH HYPOTHESES:</strong></p><p>The researcher intends to test the following hypotheses at 0.05 level of significance;</p><p><strong>Hypothesis One:</strong></p><p><strong>Ho: &nbsp; &nbsp;</strong>There is no significant relationship between motivation and productivity of employees in insurance companies.</p><p><strong>Hi: </strong>&nbsp; &nbsp; There is a significant relationship between motivation and productivity &nbsp; &nbsp; of employees in insurance companies.</p><p><strong>Hypothesis Two:</strong></p><p><strong>Ho: &nbsp; &nbsp;</strong>There is no significant relationship between reward system and employee &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;performance in AIICO Insurance Nig Plc.</p><p><strong>Hi: </strong>&nbsp; &nbsp; There is a significant relationship between reward system and employee &nbsp;performance in AIICO Insurance Nig Plc.</p><p><strong>Hypothesis Three:</strong></p><p><strong>Ho: &nbsp; &nbsp;</strong>There is no significant relationship between job incentives and &nbsp; &nbsp; &nbsp; &nbsp;commitment in AIICO Insurance Nig. PLC.</p><p><strong>Hi: </strong>&nbsp; &nbsp; There is a significant relationship between job incentives and &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;commitment in AIICO Insurance Nig. PLC.</p> <br><p></p>