CHAPTER ONE

INTRODUCTION
1.1 Background to the Study
Advertising presents the most persuasive selling message to the right prospects for
a product or service at the least possible cost (Dogudje, 2009). According to
Kankarofi (2009) any company that doesn’t advertise will die hence, the need for
corporate/business organizations to sufficiently appreciate the place of
advertisement in the survival of their business. Kaufman (1980) asserts that
“advertising is not chemistry, with rules and laws that, if followed with reasonable
precision, will lead to predictable results every time. In other words, it’s not a
panacea that can restore a poor product or a declining market; it is not a substitute
for sound business judgment nor is advertising merely the words and pictures that
appear in newspapers and magazines, on billboards and on television screens
(Kankarofi, 2009).
According to Robinson (2016), cited in Ashkan, (2016) advertising is a prominent
feature of modern business operations. One can encounter advertising messages,
while watching TV, reading magazines, listening to the radio, surfing the internet,
or even simply while walking down the street, as advertisement a stimulating
influence on purchasing behavior of the customer. This mammoth surge of
advertisements from every possible source is basically to fulfill the urge of
marketers to reach to a large number of people so that their product may receive
optimum exposure. In addition, Ashkan, (2016) asserts that the role of this mass
mode of communication in creating brand loyalty, deterring entry and
consequently increasing sales revenue and profits of the organization and causing
impact on the business cycle has been emphasized at various points of time by
different studies {Ozga, (1999); Sundarsan,(2007)}.
Broadly speaking, according to Greunes, Kamershcen, and Kllin,(2000), the role of
advertising expenses in an economy can be classified under two heads. According
to one school of thought, advertising increases profits and reduces consumer
welfare by creating spurious product differentiation and barriers to entry. While the
other school of thought focuses on the informative character of advertising, which
makes markets more competitive and reduces profits by informing the customers
about prices and quality (Greunes, etal.,2000).
In the pre-historic era, advertisement appeared in the form of Egyptian papyrus
with the information of the upcoming sale of a slave. Advertising in those days was
presented by written or oral announcement touting a particular product or service.
The oral advertising was spread by some sort of barker. Besides papyrus scrolls
and wax boards, the written advertising was embodied in inscriptions on roadside
rocks, as well as on buildings. As nowadays, there was a promotion of almost
everything - olive oil and amphorae to keep the oil, oxen, horses and other
livestock, tools and weapons (Frolova , 2014) . However, advertisement would
probably would not have expanded so much, without the era of mass
communication. The first impetus for this was typography. Another important
development was the invention and subsequent spread around the world of the art
of photography in the mid- 19th century. A photograph has served as an irrefutable
proof of benefits of the advertised product. (Presbrey, 2009).
Meanwhile, the most important developments in the global advertising business
were made in the 20th century. It is no exaggeration to say that the 20th century
was the “century of advertising”- at that time there were profound changes and
innovations in the field of technology and advertising. It was the 20th century
when advertising became this so popular – primarily due to the unprecedented
growth rate of world industrial production, as well as due to the appearance of
more and more sophisticated means of creating and distributing advertisements:
multicolor printing, analog and then digital radio, television, satellite
communications, and finally, computers and the Internet. Advertising is day to day
becoming more professionally organized and more quality performed (Presbrey,
2009).In spite of the import and evolution on advertising, one cannot deny the fact
that ultimate function of advertising expenses is to promote sales revenue. That is
why every organization with the expectation of earning return is investing millions
of naira or dollars on this mode of marketing communication (Ashkan, 2016).
Furthermore, Shahram, Narges and Ensieh (2013) opined that advertisement
has positive impact on insurance industry in term of opinion, image making,
and information but nothing was said evolving advertisement strategy, use of
advertisement agencies that can give advice on process and branding of the
company and its services, since insurance is a service industry. However,
Aduloju et al , (2009) did not specify the need to streamline advertisement to
meet the need of the audience since advertisement is about the company, its
products, it people, tools and culture thus, the need to streamline insurance
products for ease to engender public acceptance which can improve the insurance
industry on the long run.
According to Ashkan, (2016), it is important to adopt the measure of advertising in
order to mitigate major factors contributing to this undesirable performance; low
levels of awareness, general poverty levels and low incomes of the clients plus all
the other extraneous variables like educational background, religious belief and
custom that could act as impediments to the performance of the industry. This
informed Yegon, and Nagib, (2016) assertion that there is need for planning
advertising messages, in a manner that suggests four general purposes is to attract
attention, create interest, and stimulate desire and pushing people to buy.
Financial challenges are constantly being experienced in Nigeria and accessing
insurance or government assistance has also being limited because of the economic
downturn. According to Ackah and Owusu (2012) people have very low access
(about 4.1% ) to insurance which excludes public health insurance. The low
patronage of insurances is attributed to several socio-economic development
factors which usually pose challenges to insurance system, the most obvious being
that a majority of economically active people work in the informal sector (Ackah
and Owusu, 2012). Ibok (2012), also argue that socio economic factors such as
age, sex, income, access to health insurance information, education, age, marital
status, sex, family size, occupation are jointly contributed to the state of health
care insurance system in Nigeria.
Daniels (2015) opined that Insurance industry over the years have not fully employ
the tools of advertisement as a measure of ensuring sale and share patronage but
rather has relied on regulators to ensure their survival, this has led to their
underperforming hence, the need to fully adopt self sustaining strategy to grow
and developed . Daniels (2015) further argue that growth in premiums and assets
under management should be a natural consequence of policy changes and their
implementation by the regulator, coupled with the revitalization of the players by
the influx of fresh ideas and best practices by the foreign players.
Several policies and program have been put in place in the past to address the low
performance of the insurance industry, in spite of this the performance seems not
have improve as many Nigeria still shy away from taking insurance policy except
they being compelled to do so. Besides, the perception among Nigeria about
insurance policy has been negative because of their past experiences with many
insurance companies hence this study intend to explore the impact of advertising
on the performance of insurance industry focusing on five selected insurance firms
including AIICO Insurance plc, Anchor Insurance Limited, Capital Express
Assurance, Cornerstone insurance Plc. and Consolidated Hallmark insurance plc .
1.2 Statement of Research Problem
Although advertising can play an important role in the economic growth, some
economic still ask the question such as, is money spent for advertising an
undesirable allocation of society scarce resources? Or put in another way is
advertising an economic waste?
Some critics of advertising believes so, some said that the millions of naira wasted
on advertising could be used in establishing industries to give employment to the
unemployed, others said that the money used to produce good and portable
drinking water and other social amenities to the rural areas for a better standard of
living for the people, yet other said such millions could be used to build
rehabilitation centers for the disables or the privileges, build hospitals and
providing drugs both in the rural and urban areas.
Some people argued that advertising has no important use to the economy, it
should be noted that advertising expenditure in the United States are currently at
2% to 3% percent of their gross national product (GNP) Winter and Zeigher (1982,
12).
The traditional economic view that advertising is wasteful is based on assumption
that customer already possess perfect information and can make their choice
without advertising.
The assumption is not true in the real world, because there are a lot of people who
spent much in seeking information about product or services daily this is because
people do not have complete information and they seem to go after such
information.
Another problem of advertising is that, the difficulty of its evaluation, it is very
difficult to measure the effectiveness of advertising, the problem is the liability of
identifying the possible result of any given advertisement or even an entire
campaign. Except in the case of mail-order advertising, we cannot attribute a given
unit of sale or services to any specific advertising or campaign.
And as a result of heavy amount been spend on advertising cost of production
increase in effect higher prices is charge for a production of a commodity which is
subsequently passed to consumers, thereby decrease their demand for the product.
The main issue here is or what not clears about advertising to many people is
whether advertising has been doing its job affectively and that is the main concern
of this write up.
Advertising research tries to clear this issue by measuring or attempting to measure
advertising effectiveness and the same time improve its efficiency.
Advertising effectiveness refer to the degree by which an advertising campaign
help to achieve overall marketing objectives. In other words, what we assume is
that advertising has done related to the objectives for which it is carried out.
If the gap between what on advertising campaign has achieved and what was
expected to achieve is narrow then we conclude that advertising campaign has
been run several times, the conclusion will be that the campaign has been
ineffective efficiency on the other hand is defined as the best possible use of the
advertising budgeting and media mix in carryout and advertising campaign.

1.3Objectives of the Study

The general objective of the study is to examine the impact of advertisement on
customer patronage of insurance services in Benue State, the specific objectives
are stated below;
1. To examine the impact of person- to- person insurance policy campaign on
sales volume of insurance services in Benue State
2. To examine the effectiveness of electronic advertising /promotional activities
on sales volume of insurance services in Benue State
3. To understand and measure the impact of advertising on insurance product
awareness in Benue State
1.4 Research Questions
1. What is the impact of person- to- person insurance policy campaign on sales
volume of insurance services in Benue State?
2. To what extent is the effectiveness of electronic advertising /promotional
activities on sales volume of insurance services in Benue State?
3. How has advertising impacted on insurance product awareness in Benue State?
1.5 Research Hypotheses
Hypothesis One
Ho: Person- to- person insurance policy campaign does not have impact on sales
volume of insurance services in Benue State.
H1: Person- to- person insurance policy campaign does not have impact on sales
volume of insurance services in Benue State.
Hypothesis Two
H1: There is no significant effect of electronic advertising /promotional activities
on sales volume of insurance service in Benue State.
Ho: There is significant effect of electronic advertising /promotional activities on
sales volume of insurance firms in Benue
Hypothesis Three
H0: Advertising does not have significant impact on insurance product awareness
in Benue State.
H1: Advertising does have significant impact on insurance product awareness in
Benue State..
1.6 Significance of the Study
First and foremost, the study is significant because of its expected usefulness to
formulators of insurance policy in Benue State. Since the enactment of the first
insurance legislation in 1961, several insurance policies and guidelines have been
formulated, and new insurance regulations enacted to encourage the development
and sustenance of insurance consciousness and awareness and ensure the
penetration of insurance in Benue State. Most of these policies and laws have
failed to achieve the desired objectives. This study will serve as an eye opener to
policy makers by revealing the current level of insurance awareness and factors
influencing or militating against the cultivation of insurance awareness/habit in
Benue State. It will also guide them in the formulation and implementation of
appropriate insurance policies and enactment of insurance laws that will bring
insurance services nearer to the people at the grassroots and inculcate good
insurance consciousness and habit into the Nigeria populace. Thus, this study will
assist policy makers in formulating policies that conforms to the objectives of
enhanced growth and productivity of the Nigerian economy.
1.7 Scope of the Study
The study covered advertising as the independent variable and sales performance
as the dependant variable, it is limited to the Nigeria insurance sector, We are
measuring performance in term of sale of insurance products, attractions of
investor to patronize insurance share. This will ensure increase capacity to
underwrite risk on all part of our economic both oil and non oil risk, development
of the sectors to perform and enhance our fragile infrastructural through the use of
advertisement.
The issue of arriving at actual capital to write insurance business will continues to
be an issue in Nigeria but if adequate measure is taking to advertise the sector in
this regard to general public on opportunities and benefit, there will be mad rush to
invest and the industry will be better for it
The study will depend on both primary sources, questionnaire for gathering data
and secondary data like journal, textbook and online sources. Our primary
limitation is reluctant of insurance companies to response to our questionnaires and
also general public are also reluctant to fill our query.
 There is also the cost consequent of travelling to all the part of the country to
examined broad knowledge of insurance and not being able to ascertain the
number of life assured in the Nigeria insurance industry. Research material are
limited in scope and also you have few sources you can reviews also lack of
accurate statistics is also an impediment. The tool of persuasion was intensively
use to lure respondent to responds to our query and will still implore researcher to
do same.
 CHAPTER TWO
LITERATURE REVIEW
2.1 Conceptual Framework
Companies devote a considerable amount of money to achieve the best
results from their advertisements as the pressure on companies to advertise as
well as the pressure on advertising companies to increase the effectiveness and
reach of advertisement is growing every day.
Advertising is very important in our society. According to Robinson, cited in
Ashkan (2016), advertising is a prominent feature of modern business operations.
It is a viable tool to place a product at the top of the mind of potential customers as
one can encounter advertising messages, while watching TV, reading magazines,
listening to the radio, surfing the internet, or even simply while walking down the
street, as advertisement has a stimulating influence on purchasing behavior of the
customer. This tradition of making advertisements available at every turn is further
fueled by the urge of marketers to reach a large number of people so that their
product may receive optimum exposure in order to create brand loyalty, deter entry
of new companies and consequently increase sales revenue and profits of the
organization (Ashkan,2016)
Idris (2018) adopted the Ajzen’s theory of planned behavior (TPB) to
describe northern Nigerians’ acceptance and patronage of insurance services and
found that religious values, subjective norms and behavioral control factors do not
account for poor acceptability and patronage rather poor marketing strategies plays
an important role in the persistence of such negative occurrence, as such the role of
advertising cannot be overemphasized. Advertising is an informative or persuasive
message carried by a non-personal medium and paid for by an identified sponsor
used to persuade an audience (viewers, readers or listeners) to take some action
with respect to products, ideas, or services. Corporate advertising can tell a story
about a company as a whole, large organizations may need to use corporate ads to
simplify their image in the minds of key constituents and to show what unifies the
company, despite the geographical spread and variety of its businesses, to establish
the brand, build awareness and give the brand a larger-than life image (Adeneye,
2017).
Throughout the range of modern businesses, advertising can play an
essential role in the success or failure of a given enterprise. The ability to reach
audiences, convey messages, and create an overall image for an individual or
business are powerful tools, and some companies may even spend most of their
budgets on advertising efforts in an attempt to use these tools to their fullest
advantage.
Insurance industry advertising accomplishes the task of reaching out to those
prospective clients who would otherwise be left to approach insurance agents and
brokers on their own, unprompted. Able to present solutions to those who may
have no other method of arriving at a sound answer for their insurance questions,
such advertising serves as the broad public face of a company and is the first point
of contact that will be established between a client and the agency from which a
policy or package is purchased. insurance industry advertising has its roots in the
establishment of a relationship between clients and companies. Far from being a
simple gimmick to increase sales, it sets the stage for future interactions and aids
the course of contract development (Shahram et al., 2013). This function is not
only an essential one; it is also able, in many cases, to help catalyze the process of
selling insurance. While agents and firms without extensive advertising, or any
advertising at all, must often rely on performing each step of the trust building
process manually, truly excellent insurance advertising campaigns can make this
process move much more quickly, allowing for a higher volume of more successful
sales. Great insurance industry advertising has a great deal to do with establishing
an image and distributing it to prospective clients, but it is also a way to streamline
insurance sales itself, providing a compounded benefit that makes working in the
modern market without considerable advertising efforts somewhat difficult (Fofie,
2016). Adeneye (2017) posit that there was significant relationship between
advertisement and performance of insurance industry in term of sale and
investment in the industry. Aduloju, Odugbesan and Oke (2009) found that
advertising had effects on sales volume and improved public image. However, the
choice of advertising medium, the message, and the format are critical ingredients
of a successful advertising program in the insurance industry.
2.1.1 Concept of Advertising
Kotler and Keller (2006) defined advertising as any paid form of non – personal
presentation and promotion of ideas, goods, or services by an identified sponsor.
Advertising can be a cost – effective way to disseminate message and to educate
people. The business world is very competitive and each business must seek ways
of getting that extra edge. To succeed, you must put your business and its products
before prospective buyers because they are not going to be working around to find
you. This is where advertising comes in. Advertising is a form of paid
communication using the mass media (Press, radio, television, postage and cinema
etc) to spread the word about your goods and services. (Salami, 2007). Advertising
is part of one of the components of marketing mix. Advertising is a major
marketing communication tool (Anderson and Rubin, 1998). Siegel (1996) defines
advertising as non personal persuasive marketing communication mostly conveyed
in the mass media and paid for by an identified sponsor who controls the message.
Advertising is a paid mass communication, the aim of which is to sell goods
or services or ideas. In all these definitions above, there are two common key
words: Paid and non personal Crane, Kerin, Hartiey, Barkowitz and Rudelius,
(2006) explain that the “paid” aspect of the definition is important because the
space for the advertising message must be bought. They also explained further that
the “non personal” component of advertising is also important because advertising
involves mass media such as television, Radio and Magazines which are non
personal and do not have an immediate feedback.
An advertising objective describes the effect sought on a specified target
market. These effects can be behavioral, attitudinal or informational (Craneet al.,
2006):Behavioural Objective: Relates to causing customers to buy a product,
respond by letter, coupon or telephone and ask for a demonstration. Attitudinal
Objective: Relates to persuading customers that a product has certain attributes,
such as style or quality or is appropriate for use on certain occasions. Informational
Objective: Relates to creating awareness of new products, special prices or offers,
reminders about existing products, explaining what product do. Analysis of the
current marketing situation will determine whether their aim is to inform, persuade,
remind, or reinforce. The product class is mature is different from when the
product is new. The advertising objectives must flow from prior decision on target
market, brand positioning, and the marketing program. Advertising has always
been a very important tool of connecting people who want to sell something with
the ones who have the means to use those products. Advertising objectives can be
classified as follows in hierarchy of effect (Crane et al, 2006). Informative
advertising: This aims to create product awareness and knowledge of new products
or new features of existing products. Persuasive advertising: This aims to create
liking, preference, conviction, and purchase of a product or service. Some
persuasive advertisement use comparative advertising, which makes an explicit
comparison of the attributes of two or more products. Reminder advertising: aims
to stimulate and repeat the purchase of products and services. Reinforcement
advertising: aims to convince current purchasers that they made the right choice.
2.1.2 THE GOAL OF ADVERTISING
Advertising goals are what a company hopes to achieve by conducting an
advertising campaign. Companies usually connect advertising goals to larger
company goals such as increased sales, customers or web traffic. You might
connect your goals to timelines or other metrics to measure your success. Consider
setting flexible goals to ensure you can update them as you respond to customer
feedback and market changes.
A company can usually categorize each goal into one of the three major objectives
for advertising:
Informative: Informative advertising uses proven facts or features to advertise
products or services. A company might provide a logical reason why a customer
might purchase a product.
Persuasive: Persuasive advertising is advertising that strives to convince potential
customers why they may benefit from engaging with a brand. Persuasive
advertising often appeals to the emotions of the target audience. The main goal of
persuasive ads is to influence consumers to make a decision.
Reminder: Reminder advertising, or retentive advertising, is when a company
engages with existing customers to remind them about products, services or
company values. Companies may use this advertising tactic to encourage repeat
customers to continue shopping with them.
2.1.3 THE CONCEPT OF INSURANCE
Philology argue that root of insurance word in Latin is Securus means certainty or
confidence provide. Insurance roots in Persian have been fear. Because the main
reason for insurance contracts is fear and escape from risk.
Definition of Insurance
In terms of commons : The insurance is a company in return received money
commitment that compensate unexpected damage due to events. (Tokmana 2007)
In terms of financial nature : Insurance is an economic issue to its help risk and
uncertainty is transferred from one person to another person or other persons and
consequently will be reduce the risk. (Reichheld & Sasser 1990).
In the article one of insurance legislation approved in 1937 insurance is defined
as : Insurance is a contract whereby one party makes commitment in return for
payment funds on the other hand, in the event of an accident does compensate
Damage inflicted on him, or to pay a specific amount. Committed to is called the
insurer and side of commitment is called insured. The money insured pays to
insurer is called premiums and something will be insurance is called insurance
subject. (Babaei 2007)
2.1.4 INSURANCE SERVICES
1. Long-Term Disability Insurance
The prospect of long-term disability (LTD) is so frightening that some people
choose to ignore it. While we all think that "nothing will happen to me," relying
on hope to protect your future earning power is not a good idea. Instead, choose
a disability policy that provides enough coverage to enable you to enjoy your
current lifestyle even if you can no longer continue working. 
Long-term disability provides a monetary benefit equal to a portion (e.g., 50% or
60%) of the insured's salary for covered disabilities. Long-term disability
typically begins when short-term disability ends. To receive benefits, the
disability must have occurred after the policy's issuance and then, typically after a
waiting period. Medical information, often confirmed by a physician, must be
provided to the insurer for consideration.
Most long-term disability insurance policies categorize disabilities as own
occupation or any occupation.1 Own occupation means the insured, due to
disability, is unable to perform their regular job or a similar job. Any occupation
means the insured, due to disability, is unable to perform any job for which they
are qualified.
Similar to short and long-term disability insurance, workers' compensation, or
workers' comp, it pays a monetary benefit to workers who become injured or
disabled at work or while performing their jobs. Most states require employers to
carry workers' compensation insurance for their employees. In exchange,
employees may not sue their employer for negligence.
While long-term disability insurance and workers' compensation insurance both
pay for disabilities, long-term disability insurance is not limited to disabilities or
injuries occurring at work or while working.
2. Life Insurance
Life insurance protects the people that are financially dependent on you. If your
parents, spouse, children, or other loved ones would face financial hardship if you
died, life insurance should be high on your list of required insurance policies.
Think about how much you earn each year (and the number of years you plan to
remain employed), and purchase a policy to replace that income in the event of
your untimely demise. Factor in the cost of burial too, as the unexpected cost is a
burden for many families.
3. Health Insurance
The soaring cost of medical care is reason enough to make health insurance a
necessity. Even a simple visit to the family doctor can result in a hefty bill. More
serious injuries that result in a hospital stay can generate a bill that tops the price
of a one-week stay at a luxury resort. Injuries that require surgery can quickly
rack up five-figure costs. Although the cost of health insurance is a financial
burden for just about everyone, the potential cost of not having coverage is much
higher. 
4. Homeowner's Insurance
Replacing your home is an expensive proposition. Having the right homeowner's
insurance can make the process less difficult. When shopping for a policy, look
for one that covers the replacement of the structure and the contents, in addition
to the cost of living somewhere else while your home is repaired. 
Keep in mind the cost of rebuilding doesn't need to include the cost of the land
since you already own it. Depending on the age of your home and the amenities it
contains, the cost to replace it could be more or less than the price you paid for it.
To get an accurate estimate, find out what local builders charge per square foot
and multiply that number by the amount of space you will need to replace. Don't
forget to factor in the cost of upgrades and special features. Also, be sure the
policy covers the cost of any liability for injuries that might occur on your
property.
Renters Insurance
Renters also need peace of mind that they will be made whole in the event of a
loss. Fortunately, renters insurance is a type of property insurance available to
people who rent or lease properties. This insurance provides coverage for
personal belongings, liability, and additional living expenses for covered losses.
For one property, there may be two types of property coverage: homeowner's
insurance and renters insurance. However, homeowners insurance does not cover
the personal property of the tenant. Therefore, it is important for lessees to obtain
renters insurance to protect their assets.
2.1.5 ADVERTISEMENT OF INSURANCE
Advertising is communication and the introduction of non-specific products or
services through various carriers in contrast receipt of missionary for profit
institutions or non-profit institutions or people who that somehow marked in the
message. (Elahi & Heidari 2005)
Commercial Advertising: Commercial advertising is a process of communication
with customers so that relying on advantages and benefits and positive features of a
product, service or commercial agencies through art and creativity do intrusion in
thoughts and mental potential customers or probable and also do encourage them
than selection or purchase certain goods or services. (Nili Ahmad Abadi 2004)
Commercial Advertising Purposes: Advertising can will have very different
purposes. Acquiring customers' desires in order to own preferred satisfy,
convincing the audience, organization benefits provision by influence and
infiltration and dominate on audience. Also Some of the main objectives of the
advertising are as follows :
i. Increased of consumption type
ii. Increased of purchase amount
iii. Increased of consumption
iv. Increased of consumption frequency
v. Attract of new generation
vi. The development of institution name or product name
vii. Fight against opinions dissenting
2.1.6 PATRONAGE OF INSURANCE SERVICES IN NIGERIA
Poor attitude and aversion towards risk and ambiguity according to Akay,
Martinsson, Medhin, &Trauman, (2009) and Cabantous, (2007) is the major reason
Ethiopians cannot fully accept to patronise insurance services, the same is found in
Belgiumand other places in Europe (Heselmans, Donceel, Aertgeerts, Van-de-
Velde, &Ramaekers, (2009) and Loh, Nihalani, &Schnusenberg, (2012). The issue
of ambiguity as an impediment to acceptance of insurance is evidenced from
Hogarth &Kunreuther (1985)&Goldmann, (1948). Likewise, Amaefula,
Okezie&Mejeha (2012) show that, despite rural farmers‟ awareness of agricultural
insurance services in southern Nigeria, they have poor attitude towards it due to
consideration of gain or loss associated with or without insurance cover. While
Olugbenga-Bello &Adebimpe, (2010) found that, there is high level of awareness
of health insurance in South-west Nigeria but, there is less knowledge of how to
competently benefit from health insurance scheme, while Ojatta, (2016) found
poor level of awareness and perception on health insurance in Kogi state Nigeria.
Balmalssaka, Wumbei, Buckner &Nartey (2016) found that past experience
to other insurance cover and the extent of damage incurred forms the basis for
deciding to accept insurance service in northern Ghana. While, Stevens-Benefo
(2015) found lack of trust and poor education on insurance‟s benefits as the cause
of negative perception of insurance by small businesses and house-holds in Accra-
Ghana. Ali and Isa-Dandago, (2016) identified product promotion, features,
benefits and service quality are the major determinants of commercial vehicle
owners‟ acceptance of Takaful, not religious reasons in Nigeria. In another study
by Yusuf, Gbadamosi&Hamadu, (2009) where they use the influence of
demographic variables of their respondents to identify readiness to accept
insurance services. Among the eight variables (age, gender, marital status,
educational level, employment, professional inclination, household income and
property mortgage ownership) tested, only gender was found to have no significant
influence on acceptance of insurance services in Nigeria.
2.2 Theoretical framework
There are several theories propounded that actively discuss advertising, its
relevance to consumers and how consumers are affected by advertising. The
following are some of these theories, however, three of these theories; Active
Learning or Information Processing Theories, the Behaviour Learning or Low
Involvement Theories, and of course the Dissonance Reduction or Cognitive
Dissonance Theories are discussed below.
2.2.1 The Active Learning Theories by Nord and Peter (1980)
Also known as the Information Processing Theories, this group of theories operate
upon the premise that any piece of advertising presents a message which the
consumer finds to be meaningful. The active learning theories generally postulate
that learning comes before attitudinal response and finally a change in behaviour.
Therefore, if a piece of advertising was exposed to consumers, the said consumers
first receive the message or stimuli, this is then internalised and thought through.
After the processing and decision-making, the customer then responds through
action which becomes the purchase of the advertised product. Active learning
theories sharply contrast with the behavioural learning theories by insisting that the
consumer to whom the advertising is exposed plays an active role by being
involved in the processing of data acquired and by, subsequently, taking action,
hence the theories are sometimes as the information processing theories.
2.2.2 The Behavioural Learning Theories Pioneered by Edward Thorndike
(1911)
Also known as the Low Involvement Theories, this group of advertising theories
appear to directly counter the postulations of the active learning theories. These
theories have developed from the pioneering works of the Edward Thorndike
(1911) which was essentially hinged upon instrumental conditioning. The principle
of reinforcement was much later introduced into the whole equation by Skinner
(1953). These earlier works were advanced upon by Kassajian (1978), where he
argues that consumer decisions do not spring from any “grand theory of
behaviour”, as such responses were insignificant and uninvolving. As far as he is
concerned, the matter is so simple and easy because if a product satisfies a
consumer, he is most likely to repeat the purchase behaviour.
The issue of positive reinforcement initiated by Skinner was revisited and
elaborated upon by Rothsochild and Gaidis (1981). They noted that initial and
repeat purchase is central to advertising and marketing. Therefore, they continue,
the provision of positive reinforcement should be a most critical objective of
practitioners in the said fields. In their observation, intermittent reinforcement will
create enough room for behavoural change, which might mean a shift in purchase
loyalty to a competing brand whose reinforcement is unbroken. The Low
Involvement Theories seem ultimately to indicate that learning comes before
behaviour change, which predisposes to a change in attitude.
2.3 Review of Empirical Literature
In an attempt to lend their voices on the growing call for the development of the
insurance sector, several researchers, scholars and stakeholders have undertaken
various studies to determine the effect of advertising on insurance industry
performance and the effect of insurance industry performance on economic
growth. in Nigeria and abroad.
Beenstock et al. (1988) applied pooled time series and cross-sectional analysis on
1970 to 1981 data, covering mainly 12 countries. They employed multiple
regression model to analyze the effect of premiums for property liability insurance
(PLI) on gross national product (GNP), income and interest rate development, and
found that premiums are correlated to interest rate and GNP; marginal propensity
to insure (short and long-run) rises with income per capita and is always higher in
the long-run. Outreville (1990) conducted a cross-section analysis on PLI premium
for the year 1983 and 1984 for 55 developing countries onto GDP, insurance price
and macroeconomic figures. The results are similar to Beenstock et al. (1988) and
support the significance of income and financial development (M2/GDP). Brown
and Kim (1993) analyzed life insurance consumption per capita for 45 countries
for the years 1980 to 1987 with the multiple regression model on cross-sectional
data on various country figures, such as income or inflation rate: income
dependency and social security expenses are positively correlated, while inflation
is negatively correlated and significant in both years.
The religious origin, that is, being a Muslim country is always negatively
connected to insurance consumption and so, the findings support the works of
Hofstede (1995, 2004) and Fukuyama (1995) in their reasoning that social backing
influences insurance demand. Zhuo (1998) focused on China and conducted a
cross-regional study for 1995 and a time – series analysis for the period 1986 to
1995. In accordance with other findings, both the cross-regional and the time series
analysis show that GDP per capita and consumer price index (CPI) are
significantly correlated with insurance consumption. Holsboer (1999) concentrated
on the changes in the external environment for insurance companies in Europe in
the period under review. He argued that the change of importance of insurance
services in the economy is dependent on the growing amount of assets and the
increasing competition in the financial sector. He built the following model which
is based on Aaron (1966): interest rate (R), growth of the working population (N),
the economic growth rate (G), superior benefits of the pay-as-you-go pension
system if R< N+G, superior benefits of the funded pension system if R>N+G, and
both pension system providing equal benefits if R=N+G. As population aging and
the move from pay-as-you-go (PAYG) system to privately funded schemes favours
the growth of the insurance industry and facilitated capital market development
with increasing supply of long-term savings, Holsboer (1999) saw the interaction
between the insurance and economic growth as bi-directional. Brown et al. (2000)
applied a pooled cross-sectional panel model to motor vehicle and general liability
insurance in the OECD over the 1986 to 1993 periods.
They analyzed liability insurance consumption on a variety of factors, including
income, wealth and legal system. Income and the legal system are positively
correlated with insurance consumption while loss probability and wealth are
negatively correlated with insurance consumption. They argued that income affects
insurance consumption. Zurbruegg (2000) examines the short and long-run
dynamic relationships between economic growth and growth in the insurance
industry for nine OECD countries. This was achieved by conducting a co-
integration analysis on a unique set of annual data for real GDP and total real
premiums issued in each country from 1961 to 1996. Causality tests were also
conducted, which account for long-run trends within the data. The results from the
tests suggest that in some countries, the insurance industry Granger cause
economic growth and in other countries, the reverse is the case. Moreover, the
result indicates that the relationships are country specific and any discussion of
whether the insurance industry does not promote economic growth will be
dependent on a number of national circumstances.
Ward and Zurbruegg (2000) analyzed Granger causality between total real
insurance premiums and real GDP for nine OECD countries over the period of
1961 to 1996 and found that the insurance market is leading the GDP for Italy;
they also found a bi-directional relationship. The results for other countries shared
no connection. The result of ECM added Australia and France to the group of
countries giving evidence for some kind of connection. Beck and Webb (2002)
applied a cross-country and time series analysis for the relation between life
insurance penetration, density, and percentage in private savings and GDP as the
dependent variables, real interest rate, inflation volatility and others as the
explanatory variables. Strong evidence was found for GDP, oil dependency ratio,
inflation and banking sector development. Inflation, real interest rate, secondary
enrolment and private savings were found to be significant. The cross country
analysis shows a negative coefficient for a country being of Islamic origin and adds
institutional development to the indicators connected positively to insurance
demand.
Webb et al. (2002) used a Solow-Swan model and incorporates both the insurance
and the banking sector, with the insurance divided into property/liability and life
products. Their findings indicate that financial intermediation is significant. When
split into the three categories, banking and life sector remain significant for GDP
growth, while property/liability insurance lose their importance. Furthermore,
results show that a combination of one insurance type and banking has the
strongest impact on growth. Lim and Haberman (2003) concentrated on the
Malaysian life insurance market. While the interest rate for savings deposits and
price enter significantly in the equation, the positive sign for the interest rate
puzzles the authors. This could be in line with findings of Webb et al. (2002) who
found the best results when insurance and banking sector are combined in the
estimates.
Webb et al. (2005) analyzed the effect of banking and insurance on the growth of
capital and output based on cross-country data of 55 countries for the period from
1980 to 1996. The insurance variable is measured by average insurance penetration
(insurance premium relative to GDP) of life and non-life insurance respectively. At
the first stage of ordinary least square (OLS) estimation, assuming exogenous
financial variables indicate positive effect of banking development on economic
growth, while insurance variables do not enter significantly. The results of
simultaneous equations, assuming endogenous relationship between financial
activity and economic growth, show that higher levels of banking and life
insurance penetration predict higher rates of economic growth. Kugler and Ofoghi
(2005) examined the long-run relationship between insurance market size and
economic growth in United Kingdom for the period from 1966 to 2003 for long-
term insurance, and for the period from 1971 to 2003 for general insurance (from
1991 to 1997 for marine-aviation, transport insurance and reinsurance). The study
used disaggregated data for the measure of market size. That is, net written
premium for each market in insurance industry in the UK is used as a measure of
market size for that market. Causality tests show that there is a long-run causality
from growth in insurance market size to economic growth for eight (8) out of nine
(9) insurance markets. Using Johansen’s co-integration test, the result shows a
long-run relationship between development in insurance market size and economic
growth for all components of insurance market. Adams et al. (2005) examined the
dynamics and historical relation between banking, insurance and economic growth
in Sweden in the period from 1830 to 1998. Insurance development is measured by
annual aggregate (non-life and life) insurance premiums. They used time series
data and econometric tests of co-integration and granger causality. The results
show that the development of banking, but not insurance, preceded
economic growth during the nineteenth century, while it was reversed in the
twentieth century. Insurance development appears to be driven more by the pace of
growth in the economy rather than leading economic development over the entire
period of analysis. Peter and Kjell (2006) worked on the relationship of insurance
and economic growth, a theoretical and empirical analysis which was presented as
a paper at the 2006 ECoMOd conference in Hong Kong. They applied a cross
country panel data analysis using annual insurance premium data from 29
European countries over the 1992 to 2004 period. They found a weak evidence for
a growth-supporting role of life insurance and explain this with similarities to
recent bank and stock sector findings Arena (2008) worked on the empirical study
and causal relationship between insurance market activity and economic growth
which include 56 countries (both developed and developing ones) in the period
from 1976 to 2004. Insurance premiums are used as proxies of total life and non-
life insurance activities separately. As an estimation method, the author used the
generalized method of moment for dynamic models of panel data. The result shows
a positive and significant effect of total, life and non-life insurance market activity
on economic growth.
2.4 JUSTIFICATION OF THE STUDY
This study concluded that advertisement has significant impact on consumer
patronage of insurance sector. Result of the study revealed the following as various
advertising options in Nigeria: paid search advertising, social media advertising
and outdoor advertising, broadcast advertising, print advertising, and native
advertising; arranged in the order of frequency of use. Advertising motivates new
clients to spend more by conveying useful information about the product which
helps in service choices; Advertising encourages dormant customers to come back
for a repurchase by re-engaging them. This drives additional sales and site traffic.
Advertising helps generate brand awareness and increase new client engagement.
Advertising accelerates the regular acceptance of new products and lifts the level
of acceptability of established products. New clients also tend to trust the company
more easily when exposed to good advertisement of the company
 CHAPTER THREE
RESEARCH METHODS
3.1 Research Methodology
This chapter deals with the method of research adopted in this project work. A
research method is the specification of procedures for collecting, analyzing data,
necessary to help solve the problem at hand. The areas covered include; Research
design, population of study, sampling and sampling procedure, data collection
procedure as well as administration of research instruments. The aim of this is to
explain in detail the procedures in arriving at the inference of the study.
3.2 Area of the study
This research work was carried out in Benue State is one of the North
Central states in Nigeria with a population of about 4,253,641 in 2006 census. The
state was created in 1976[4] among the seven states created at that time. The state
derives its name from the Benue River which is the second largest river in Nigeria.
3.3 Population of Study and Sample size
This refers to "a collection of measurement about which we wish to make an
inference". The study area and the population is Benue State. Benue State is one of
the North Central states in Nigeria with a population of about 4,253,641 in 2006
census. The state was created in 1976 among the seven states created at that time.
The state derives its name from the Benue River which is the second largest river
in Nigeria.  The study focused on five insurance firms located in Benue State.
These include: AIICO Insurance plc, Anchor Insurance Limited, Capital Express
Assurance, Cornerstone insurance Plc. and Consolidated Hallmark insurance plc
a. Sources of Data
The source of data for this research work was questionnaires.
Sample Size is the number of elements that are included in the sample, Asika
(2004),since it is impractical to reach the entire population, a sample is drawn to
enable the researcher make an inference. To determine the sample size, a simple
Taro Yamen sample size technique would be adopted by the researcher. Using a
confidence level of 95%, a sample of 110 respondents was chosen from an
estimated population of 200 Given a significance level of 0.05%, the sample size
was calculated as:
N
1+ N (e)2
Where;
Total CBN employees (N) is given as 5,844; Confidence level = 95%; and. Margin
of error (Significant Level) (e) = 0.05%.
200
=1+100(0.5)2

= 110

=110(Yamen, 1967)

3.5 Method of data collection

This researcher would adopt the simple percentage statistical method of analyzing
the response on the various elements of bureaucracy tendencies in the study area.
Subsequently, in order to test the hypotheses and establish the degree of
dependence or independence of variables under consideration, the chi-square
statistical technique were used for that purpose using SPSS as statistical package
for the analysis. The study adopted the percentage statistical method of analyzing
the responses on the various elements of communication in the study area. This is
given by the formula: S/n * 100/1
Where: S = Response figure
 n = Sample size
Similarly, in order to test the hypotheses and establish the degree of
dependence or independence, the chi-square statistical tool would be used
2
( fo−fe )
X =∑
2
for this study. Chi-square test is given by the formula: fe
With degree of freedom (N-1)
Where: ∑= the parameter to be estimated
χ2 = chi-square distribution
fo = the actual number
fe = the expected number
N= Number of variables
3.6 Validity and Reliability of the Instrument
The validity of the constructs of the questionnaire would be based on Cronbach
alpha construct validity method which is between 0.7and 0.9 (Nunnally and
Bernstein 1994) .The questionnaires would be constructed with the assistance of
the Researcher’s Supervisor and his suggestions would be incorporated into the
instrument before it is administered.
Reliability Statistics
Scale Scale Cronbach's
Mean if Variance if Alpha if
Item Item Item
Deleted Deleted Deleted
Person- to- person
63.4074 122.917 .965
campaign
Electronic Advertising 67.9537 127.671 .967
Insurance Policy
62.8333 124.981 .968
Awareness
Summary .966 No of Item: 3
Source: Researcher’s Computation.

3.7 Method of analysis

The research was carried out by gathering information from primary source. The
researcher with the help of members of staff of insurance firms in Benue State. 15
questions of self-administered questionnaire tagged advertising and performance of
insurance films in Nigeria (APIFINQ) was administered to the workers of the
organization. The questionnaires would be divided into 2 sections. Section A
contained questions meant to obtain respondents Bio data. While sections B of the
questionnaire comprised the problem questions on the subject matter