Consumer attitudes, financial literacy and consumption of insurance in Kampala, Uganda

Abstract

The study examined consumer attitudes, financial literacy and consumption of insurance. The purpose was to examine the extent to which consumer attitudes and financial literacy can explain insurance consumption in Uganda insurance industry. The study was cross sectional and a structured questionnaire consisting of attitude, financial literacy, consumption intention and consumption was used to obtain data from 118 respondents. The data was analyzed using SPSS and regression and correlation analysis was run because of its capacity to indicate precisely what happens to the conceptual model as different predictor variables are introduced. The findings revealed that consumer attitudes and financial literacy are strong predictors of insurance consumption and they account for 34.2 percent of variance in consumption. However, consumer attitudes explained more of the variance in insurance consumption. The findings show negative attitude towards insurance products as a result of lack of trust and confidence in the insurance firms. Prices of insurance products, Ignoring risks and reliance on family and friends for help in emergencies are the other factors preventing purchase of insurance. The findings further display low financial literacy of consumers. Findings can help marketers of insurance products in formulation and implementation of relevant marketing strategies towards addressing the nonchalant attitudes of consumers and financial illiteracy to stimulate and boost patronage and perception of insurance services.