NAME: Restructuring Initiative (MDRI), to further enforce certain

AGBADAOLA OLABODE                                 MATRIC
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section will review literatures on the insurance industry in Nigeria, social
media, branding and theories governing the study. Finally, it will look at past
studies on social media and corporate performance.



insurance industry in Nigeria is regulated by the National Insurance Commission,
guided by constituted Acts like, the Insurance Commission Act 1997 and
Insurance Act 2003. As an emerging industry in Nigeria, there are said to be
certain major players within the sector which are: the insurance company and
reinsurance establishments which underwrite policies, the insurance brokers and
agents who play the role of the intermediary that connects the insurance or
reinsurance companies and the customers, and the loss adjusters who, in the
event of a claim, perform a proper survey and estimate is to be done to
determine the exact value of damage and cost implication to indemnify the
insured for the loss.


1.5% of adults in Nigeria have an insurance policy today. This little penetration
is partly due to a lack of faith of the public in insurance companies and the
sector as a whole. Another major factor contributing to this is the lack of
knowledge and understanding of insurance on the part of the people. As a way to
increase sales and penetration, National Insurance Commission (NAICOM) in 2009,
came up with the Market Development and Restructuring Initiative (MDRI), to further
enforce certain insurance policies already made compulsory.

to The Insurance Act 2003 and certain other legislations, six insurance
policies are mandatory. PENCOM Act 2004, mandates Group life insurance, Employers
liability as stated in the Workmen’s Compensation Act 1987, buildings under
construction in section 64 of the Insurance Act 2003, Occupiers liability
insurance in section 65 of the Insurance Act 2003, Motor Third party Insurance
in section 68 of the Insurance Act 2003 and Health care Professional indemnity
insurance under section 45 of the NHIS Act 1999.


actions NAICOM has taken are, to instill the “no premium, no cover” rule,
further increasing premium generation for insurance companies, as well as
issuance of guiding principles released in December 2013 to guide micro
insurance business, as micro insurance is seen as a significant risk management
instrument, aiding protection the helpless population. It has been observed by
NAICOM that sales and distribution of insurance is extremely focused on metropolitan
areas due to target of compulsory insurance policies and corporate accounts,
and that micro insurance cannot efficiently be accessed through conventional
intermediaries, brokers and agents.


other channels like cooperatives, non- governmental organizations, the Nigerian
Postal Service and Third Party Administrators such as post offices, branches of
banks, airtime dealers and agents, fertilizer distributors (and other
distributors such as dairies and bread distributors), and retail outlets that
are patronized and trusted by the local population to act as Micro insurance


is a reasonable level of competition in the insurance industry, in Nigeria and
certain sectors have been highlighted as competitive, from life to general insurance
policies.  Big, reputable financial
establishments are known as the ones with the huge competitive sector. The Nigerian
insurance industry is currently made up of about 57 registered organizations
approved by NAICOM, as against the 140 registered in 1994.



(Kaplan & Haenlein, 2010) define social media
as “a group of Internet-based applications that build on the ideological
and technological foundations of Web 2.0 and that allow the creation and exchange
of user-generated content.” Furthermore, social media depend on mobile and
web-based technologies to create interactive platforms through which
individuals and communities share, create, discuss, and modify user-generated
content. Social media differs from traditional media in many way from the size
of the available audience to the frequency with which it is used to its staying


2.2.1 Social Media Marketing Role

In order to improve organizational performance,
companies should focus more time and resources on social media marketing as it
can boost performance in many ways, some of which are listed below;


Brand awareness

The extent to which a product or brand is known by
existing and potential clients, and to which connections can be made accurately
within the consumer group for the product, is called brand awareness. As
posited by Carol Tice, (2012), brand-building can be effectively done through
social media, as it is one of the essential tools. Via social media, you can
how you want your brand positioned, and also create knowledge of the services
you render. Through consistent post of great content, you can create awareness
about not just your product, but also your company’s values, vision and mission
statements, as it relates to your product and the value it adds.


Brand awareness is vital to how a company stands out
alongside products and services that are similar in any way, Gustafson and
Chabot (2007). Increased awareness of a brand does a lot of good for organizational
goals and objectives, whether these are long or short term. In essence, a brand
that customers and prospective customers are familiar with is more likely to be
patronized than competing brands or products. Social media marketing has a
great impact in creating brand awareness by the exposure it gives to the goods
and services of the company to a wide audience with differing metrics that can
be calculated and optimized to suit the brand’s needs. This level of exposure
is mostly measured or known by the amount of subscribers, fans or followers on
its social media platforms.


Real-time communication

Social media aids effective communication thus the use
of social media by organizations has a rapid effect on customer engagement and
feedback, and reduces the time spent on creating consumer support feedback.  Being quick to respond to clients improves
their level of satisfaction with the brand and will further increase retention rates
as well as improve brand reputation.

A process or means through which people share meaning,
is known as communication. It is necessary, therefore, that participants are
able to interpret the meanings embedded in the message they receive, and then,
as far as the sender is concerned, able to respond coherently. (Baines et al 2011).
Social media and mobile communication platforms can be used for studying and
collecting information on problems and issues faced by customers and consumers
(Shih, 2009). This, when combined with research into the relevant market, will
help create a clear direction for the organization and also help deal with
customer issues before they get out of hand and cause reputational damage.


Repeat Exposure

There is an old marketing adage that says it takes six
to eight exposures to a product before a customer decides to buy. A clear
benefit of social media is repeat exposure as with social networks,
organizations have the opportunity to remind their target audience over and
over again about their offerings which can also lead to shortened sales cycles and
quicker profits. (Tice, 2012).

In order to measure the scope of the social media activities
of an organization, social exposure can be used by measuring the numbers of
followers/fans, impressions and subscribers an organization receives on their
social pages. This exposure is necessary to build a community that can spread
the company ideals and key messages. To maximize reach, companies would need to
have a presence where people are constantly updating themselves on the content
they produce (Halligan & Shah, 2010) as having more exposure will
essentially increase the chances of consumers interacting with your brand.



advantages are company assets, attributes, or abilities that are difficult to
duplicate or exceed and which provide a favorable position over competitors in
the long run (Faulkenberry, 2012). It is the ability of a company
to deliver their products, services or benefits, either at a better rate than
other players in the same industry be it through lower costs or product
availability. Social media gives organizations who incorporate it into their
marketing strategy a competitive edge by providing real-time feedback from
customers. With little or no delay between receiving information and
disseminating it, the company can provide rapid responses to customers and gain
an advantage over competitors who do not respond as quickly or have failed to
invest in social media (Baines et al 2010).

competitive advantage social media offers is brand monitoring. Monitoring and
measuring brand performance and perception via social media enables companies follow
the conversations that customers are having about their product and effect any
changes if necessary. It offers a competitive advantage by showing the comparisons
that customers draw between the company and its competitors, which can help to
make decisions about pricing and customer preferences. By using tracking
programs such as Google Analytics or Row Feeder, the company can identify the
demographic profiles of their followers, customize their products and market
them accordingly (Mangold & Fauld, 2009).


word “brand” is rooted from the Scandinavian
word “bränna”, meaning to burn, fire in Swedish is referred to as “brand”, (Dahlberg, Kulluvaara, & Tornberg, 2004). In essence, to
leave a mark on an item or property produced by someone is branding (Dahlberg, Kulluvaara, & Tornberg, 2004). Czinkota and
Ronkainen (2001) were of the view that a company with a strong brand name
provided freedom to exploit a fresh market or different market category. (Kotler & Armstrong, 1996), were of the view
that a brand can be taken as name, term, sign, symbol, design or a combination
of all, that is associated with a product or service with the intention of
identification in any circumstance by consumers.

brand can, in essence, be defined as the promise of certain anticipated attributes
that someone buys in order to experience satisfaction later on. These
attributes can be rational or emotional, tangible or invisible (Ambler & Styles, 1997). Furthermore, Kalu
(1998) added that a brand is anything that can identify the goods and services
of a seller or group of sellers and which can differentiate them from those of
competitors. Baker, (1992) described a brand as a good or service with a set of
characteristics which clearly and readily differentiates it from all other
products, acting as an identifier to potential customers.

The Four Components of Brand Value



an economic point of view, a brand acts as a container for a company’s
reputation. Customers take on risk when they purchase products, whether they
are marketed as perishable or long-lasting and to varying degrees, customers
can get added value from products that lower risk to them. So when there is
risk inherent in a product, customers are usually willing to pay to reduce
risk. The brand acts as a mechanism to increase customers’ confidence that the
product will provide excellent and expected quality.



also communicate assurance that the firm producing the product can be trusted
to attend to the customers’ needs and concerns as needed. A significant aspect
of product value is the perception that the firm will respond as the customers’
desire, to unforeseen issues.



a psychological perspective, the brand can shape perception about the product,
highlighting certain benefits delivered by the product. This guides consumers
in choosing products and also influences how they make use of the product. Hence,
firms often seek to brand their products as particularly effective in
delivering on a single benefit desired by customers.




also act as symbols, allowing consumers to express their values and personal
identities. Historically, humans have depended upon their material culture
(clothes, homes, craft goods, etc.) as symbols of values and self-expression.
In contemporary market economies, consumer goods now dominate in serving this
function hence the popularity of the term “consumer culture”. In particular,
brands have become powerful markers to express a variety of aspirational social
identities from status to lifestyle.




The theory of critical mass supposes that an
innovation needs to be adopted by a certain number of people within a social structure
so that the rate of adoption reaches a point where it happens automatically and
creates further, self-sustained. Factors influencing critical mass may involve
the size, interrelatedness and level of communication in a society or any of
its relevant subcultures.

In the same light
social media creates critical mass for organizations so that a large number of
people can adopt the brand. With social media, companies can build a critical
mass, that critical mass is what then goes on to get other members of the
population to adopt the brand or innovation. Insurance companies can use social
media to build a critical mass for their product so that the early adopters
will then influence their social network to also buy into insurance.



social network is a structure
made up of individuals or organizations called “nodes”, which are connected
by one or more specific types of interdependency, such as friendship, kinship,
common interest, prestige and so forth.


its simplest form, a social network is a map of specified ties, such as
friendship, between the nodes being studied. Nodes are the individual actors
within the networks, and ties are the relationships between these actors. There
can be many kinds of ties between the nodes. For example, the nodes to which an
individual is thus connected are the social
contacts of that individual. These concepts are often displayed in a
social network diagram, where nodes are the points and ties are the lines.


networks operate on many levels and play a critical role in determining the way
problems are solved, how organizations are run, and the degree to which
individuals succeed in achieving their goals.


in a network share information and communicate. One’s network will include friends,
colleagues, school mates, alumni’s, family, and friends of friends. People who
are in the same clique or network are able to get their network to share the
same information. For example, friends can get each other to buy the same
insurance policies from the same company. So with social media, insurance
companies can get into the networks of established networks and only need one
person in the network to adopt the idea. Members of the same network are likely
going to adopt an idea or pay attention to reference, remarks or testimony shared
by a member of their network than, than testimony or reference shared by a

Graph of a social network




(Chen, 2001) in his research
study assessed the claim that e-commerce will spell the end of brand management
as we know it. The paper dispelled this scenario by identifying certain factors.
First, there are still other variables that have not been affected by
e-commerce which still relies on other factors such as product and type of purchase
for sales to be made. The impact of the Internet will only vary according to
the role that the brand plays in certain cases. Secondly, there is a vast
offering of Internet technologies which will affect brands in different ways.
Thirdly, the Internet is leading to some secondary effects in the market
structures that affect brands. The combination of these factors, far from
leading to the death of brand management, will in many cases lead to an
increased role for brand management.

(Corcoran & Feugere, 2009)  in their study reported that the use of social
media by brands and retailers in the U.S. showed that low to high-profit brands
and retailers are embracing social media and use it to boost sales and brand
awareness. According to New York University professor of marketing Scott
Galloway, luxury brands are now engaging with customers through Facebook,
implementing user reviews into their brand decision making, and selling their
products online. It also notes that companies now build their own social

Dutta, Soumitra (2010) in their study showed that social
media is changing the traditional methods of doing business and perception of
leadership. They further showed that although businesses are creating comprehensive
strategies in the area of social media, it is yet to be adopted as
comprehensively and strategically by corporate leaders. According to their
study, today’s corporate leaders must embrace social media for three reasons.
First, social media provides a low-cost and easily accessible platform on which
a personal brand can be built, which can also communicate company identity.
Second, it allows for rapid engagement with relevant stakeholders from peers to
customers, allowing them the chance to foster better relationships. Third, they
give an opportunity to learn from instant information and unvarnished feedback.

Aula (2010), in his article, focused on the threat and risk of social media to the
reputation of businesses. He cited examples of events showing how negative
publicity on social media led to negative impact on organizational reputation.
He further noted that social media such as Facebook and Twitter are popular for
corporate social media activities but that they expand what the scope of
reputational risk and boost chances of risk to companies.

(Hunt, 2010) stated in their article
the vital role social media plays in staff recruitment in organizations. It
further makes known that the social media platforms are not limited to
socialization, but can be an important tool that aids information about
available jobs and subsequent staff employment. They further showed that
companies that do not embrace social media as a recruitment tool might lose
quality candidates. An example is the LinkedIn social/business platform that
brings the employer and the prospective employee in the same space, allowing them
to interact and foster a potentially lucrative relationship.


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