Risk Attitude and Demand for Motor Insurance: An Examination of Selected Motorists in Lagos State, Nigeria

Abstract

Aims: This research aimed at drawing the attention of motorists and insurance practitioners in Nigeria to risk occurrences, drivers’ risk attitude, and demand for motor insurance. For this reason, the researchers have evaluated the significant influence of drivers’ risk attitude on risk occurrence and thus, examined the significant relationship between motorists’ risk attitude and motor insurance demandStudy design: The study employed cross-sectional survey designPlace and duration of study: Study was carried out in Lagos Metropolis. Duration of study was from December, 2012 to February, 2014.Methodology: The research commenced with gathering of literature survey. The study employed stratified random sampling technique and also, gathered data through the use of structured questionnaire. The sample population consisted of 270 respondents made up of motorists of private, commercial and company-used drawn from Six Local Government Council Areas of Lagos State. The statistical instruments employed for this study were Kolmogorov-smirnov test and Multiple regression.Results: Two hypotheses were tested in this study. For hypothesis 1, the use of Kolmogorov-smirnov test evidenced that driver’s attitude has significant influence on risk occurrence. For hypothesis 2, the Multiple regression presented that risk attitude of motorists has significant but negative relationship with the demand for motor insurance.Conclusion: The research evidenced a significant interrelationship between the understudied constructs .i.e. drivers’ risk attitude, risk occurrence and motor insurance demand

Keywords: Drivers’ risk attitude, motorist income level, insurance pricing, risk occurrence, Government regulation, Lagos State, Nigeria