A STUDY ON THE EXAMINATION OF INSURANCE AWARENESS AND INSURANCE PERFORMANCE IN THE NIGERIAN ECONOMY

ABSTRACT: The purpose of this study was to analyse insurance awareness and insurance performance in the Nigerian economy. The case study utilised NICON Insurance Limited, located in Abuja, as a focal point for the research. The purpose of this study is to analyse the relationship between insurance awareness and the performance of insurance companies in the Nigerian economy. It aims to examine the scope and role of insurance companies and how they may impact the country's economic growth and development. Additionally, this study seeks to increase public awareness of the activities of insurance companies in Nigeria. They provide suggestions and recommendations that may be helpful in addressing the identified issues. The study utilised a survey-based descriptive research design. A questionnaire was utilised to collect data, with responses measured on a four-point Likert scale ranging from Strongly Agree (SA) to Agree (A), Strongly Disagree (SD), and Disagree (D). The data was analysed using the Relative Importance Index (RII), and the hypotheses were tested using the Pearson Correlation Statistical Tool in SPSS version 23. The study utilised the Modern Theory of Financial Intermediation, as proposed by Merton and Bodie in 1995. A sample size of 135 respondents, consisting of the staff of NICON Insurance Limited in Abuja, was randomly selected. Out of the 135 respondents, 95 survey responses were validated. Based on the responses obtained and analysed, the findings revealed that the insurance industry has numerous multifarious roles. Based on the scope of this study, several roles have emerged. These roles include helping to reduce financial risk, generating financial resources, promoting economic growth, serving as financial intermediaries, sharing financial burdens, and providing safety and security against uncertainties. Secondly, there are various types of insurance services or policies available, including life insurance, health insurance, property insurance, auto insurance, agricultural insurance, mortgage insurance, and deposit insurance. The study revealed that insurance awareness in Nigeria is influenced by various factors, including environmental and organisational factors. These factors include lack of trust among the population, insufficient publicity, limited options for insurance products, and fear of risk. The business environment of insurance companies in Nigeria has undergone significant and rapid changes. These changes have presented challenges to the performance of insurance companies in the country. Some of the challenges in the insurance industry include underwriting risks, dependence on reinsurance, fluctuations in gross domestic product, interest rate fluctuations, low levels of market penetration, lack of consumer trust, and shortage of skilled and qualified personnel. Furthermore, there exists a noteworthy correlation between insurance awareness and the performance of insurance companies in the Nigerian economy. The Pearson correlation test revealed a statistically significant positive relationship of (.821**). There exists a noteworthy correlation between insurance companies and the economic growth of Nigeria. The Pearson correlation test revealed a statistically significant positive relationship of (.881**). Based on these findings, it is recommended that insurance companies engage in trade fairs, workshops, radio/TV jingles, and other similar activities. These communication strategies will effectively educate the public about their products and services. Additionally, it is crucial for insurance companies to provide adequate training and supervision to their staff and agents. This is necessary to guarantee that they conduct their duties in a manner that is both ethical and professional. Furthermore, implementing corporate Social Responsibility (CSR) projects can greatly improve the reputation of insurance companies in Nigeria. Initiatives such as providing scholarships to indigent students, offering healthcare services, talent scouting and development, and empowering individuals through skills acquisition can contribute to this positive change. It is important to note that the availability of insurance services is crucial for the stability of the economy, as it encourages business participants to accept higher risks. Insurance companies are required to pool premiums and establish reserve funds when they accept claims. Therefore, this study suggests that there should be a greater variety of insurance products, particularly in the non-life sector. Insurers should develop innovative non-life insurance products and make necessary adjustments to existing ones. This will provide customers with a wide range of options to choose from. In addition, it is important for insurance companies to capitalise on the non-life insurance products that are required by law. This will significantly boost their premium income and contribute to the expansion of insurance coverage. It is worth noting that the insurance industry in Nigeria has experienced notable growth since the consolidation exercise in 2007. Under a stable political and macroeconomic environment, it is expected that this phenomenon will continue to increase. This is because the insurance fund can serve as a reliable source to support the desired growth of the Nigerian economy. Therefore, it is recommended that the National Insurance Commission strengthens its regulations to encourage the listing of all insurance firms in the country. This will increase the level of insurance coverage in the country.