Financial Literacy and Precautionary Insurance

Abstract

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Financial knowledge, financial confidence and risk attitudes: Evidence from selected motor insurance policyholders in Nigeria

“…This result explains the inadequacy of insurance knowledge among the motor insurance policyholders in Nigeria; their low-level insurance knowledge proves an inverse relationship to their risk-averse nature. The result is divergent from the previous studies of He (2020), Kubitza et al (2019), Lim et al (2020) and Sanjeewa and Hongbing (2019). Kubitza et al (2019) claimed that uncertainty regarding insurance payouts, as an outcome of insurance contract complexity, affects the decision-making of financially illiterate people, which can be driven by people's risk aversion.…”

“…The result is divergent from the previous studies of He (2020), Kubitza et al (2019), Lim et al (2020) and Sanjeewa and Hongbing (2019). Kubitza et al (2019) claimed that uncertainty regarding insurance payouts, as an outcome of insurance contract complexity, affects the decision-making of financially illiterate people, which can be driven by people's risk aversion. Lim et al (2020) stated that a high level of financial knowledge will significantly increase family life insurance participation.…”

Money, Knowledge and Power

“…According to Jane Curtis: "a more financially literate consumer is more likely to buy the right products at the right time for the right job and to avoid being mis-sold to or failing to make sufficient financial provision for his or her future" (Curtis, 2012). Research suggests a positive relationship between financial literacy and insurance demand (Li et al, 2007;Cappalletti et al, 2013;Kubitza et al, 2018). Further research indicates that by every measure and in every sample examined, financial literacy is a key determinant of retirement planning (Lusardi and Mitchell, 2009), a conclusion that is supported by the Organisation for Economic Co-operation and Development (OECD) (Aegon, 2018;OECD, 2019).…”

Financial Insurance for Enterprises – Analysis of Demand and Supply

“…However, research results are available indicating that it is more beneficial for insurers to offer comprehensive insurance covering multiple risks. Such insurance is also bought in a situation of lower risk aversion (Kubitza, Hofmann, Steinorth, 2019). It should be underlined, that in this market, communication between insurers and insurance buyers is very important (Jaska, 2011;Nowotarska-Romaniak, 2014;Gorczyńska, 2017).…”