Assessment of whether insurance knowledge influences the attitudes towards insurance in the informal and formal sector

Abstract

This study sought to assess whether insurance knowledge influences the attitudes towards insurance in the formal and informal sector. The researcher focused on individuals with insurance knowledge and how that knowledge influences their attitude. This research was conducted using questionnaire among 171 respondents and Knowledge of Insurance was measured using multiple choice and true/false questions, whilst attitude was tested using a Likert scale. Index scores were obtained for knowledge and attitude, based on the sum of correct / favorable responses respectively. A main finding from the investigation is that most respondents in mutundwe village, especially those in the informal sector, do not take-up insurance as a way of preparing towards future unforeseen misfortunes. This is because of the perception among some individuals that planning ahead for a possible misfortune is like inviting evil. Other reasons given for the negative attitude towards insurance were the general lack of insurance knowledge amongst the respondents, low income levels and the reliance on God‘s protection to prevent calamities, delays by insurance companies and bureaucracy involved in making claims by the clients.. It is recommended that education on insurance is increased, government‘s supervision of insurance operations is strengthened, and that insurance companies improve their client orientation so as to redeem their public negative image.