RELATIONSHIP MARKETING AND MARKET PENETRATION OF INSURANCE IN LAGOS STATE, NIGERIA

Abstract

The relevance and contribution of insurance in nation building cannot be overemphasized. The insurance industry remains a major constituent and force in the global economy by virtue of the volume of resources it controls as premiums are collected and consequently its investment scale. Notwithstanding, customer patronage of insurance in Africa (except South Africa) is abysmally poor. Similarly, insurance market penetration in Nigeria is dismally low in comparison with other nations in Africa and beyond. While insurance penetration remains low at 0.4%, only 1.7 % of over 190 million people have insurance in place. This has been attributed largely to consumer apathy and subsequent low market penetration of insurance services. In order to help in identifying the areas that call for improvement, this study evaluated customer relationship marketing dimensions and market penetration of insurance in Lagos State, Nigeria. The study adopted a survey research design. The population of the study consisted of 375,000 estimated consumers of insurance services in Lagos State, Nigeria. A sample size of 1,650 consumers was drawn from selected Local Government Areas of Lagos State through the non-probability sampling technique. A questionnaire titled relationship marketing and market penetration of insurance was adapted and validated. The Cronbach’s Alpha coefficient for the constructs ranged between 0.76 and 0.90. A total of 1,650 copies of the questionnaire were administered, with a response rate of 80%. The data were analyzed using descriptive and inferential (multiple linear regression analysis) statistics. The findings revealed that relationship marketing has significant influence on market penetration of insurance (Adj. R2 = 0.124; F (5, 1306) = 38.222, p<0.05). Significant positive relationships were also found between some of the relationship marketing constructs and market penetration of insurance. The study concluded that relationship marketing dimensions of customer awareness, customer trust, customer service quality, product innovation and customization, and customer satisfaction are significant predictors of market penetration of insurance in Lagos State, Nigeria. Thus, to influence the market penetration of insurance, the adoption of relationship marketing is highly recommended. Article visualizations: