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

Abstract

Financial losses from the inactions of motorists culminated in financial anxieties, probably due to financial illiteracy in financial decisions. However, financial decisions are usually made in the course of attaining a high level of personal financial satisfaction. Therefore, this study examined the relationships between financial knowledge, financial confidence and risk attitudes, with specific reference to motor insurance policyholders in Lagos, Nigeria. The study adopted a cross-sectional survey research design. The study population consisted of the total number of registered motorists recorded as of 2019 by the Lagos State Motor Vehicle Administration Agency. Thus, quota and convenience sampling methods were adopted in the questionnaire distribution and collection processes. A structured questionnaire was employed for data gathering. A total of 399 copies of the questionnaire were distributed, of which 287 were found usable. The data processing technique employed was simple frequency percentages and the multinomial logistics regression method. The findings further affirmed that financial knowledge and confidence were significant in attracting reasonable risk attitudes from policyholders.

Keywords: Decisions, expected utility theory, finance, financial knowledge, motor insurance, policyholders