Risk Management Techniques and Insurance Buying Behaviour: Evidence From Small and Medium-Sized Enterprises in Lagos, Nigeria

Abstract

Risk management techniques are important metrics in safeguarding the lives and property of mankind. They influence the behavioural attitude of people to perceive the image of insurance as an intangible, inseparable, variable, and transferable product. Therefore, this study aimed at assessing the effects of risk management techniques on insurance buying behaviour, with specific reference to the perceptions of selected SMEs in Lagos, Nigeria. The study adopted a cross- sectional survey research design. The study population consisted of the total number of registered SMEs recorded in Lagos State at 11,666.Thus, a single-stage cluster sampling technique was employed in the questionnaire distribution and data collection processes. Two hundred and forty-three (243) respondents were used in the study. The statistical technique employed was simple regression. This study confirms the importance of risk management techniques in the behavioural evaluation of insurance purchases in Lagos, Nigeria. It is recommended that insurance providers in Nigeria should attempt to tailor insurance products in a lovable and affordable manner to SMEs’ operators/owners in a bid to improve on their behavioural risk attitudes. More so, interest should be placed on impressive risk management communication and ideal risk financing techniques among SMEs’ owners/operators.

RISK FINANCING TECHNIQUES AND SMEs PERFORMANCE: EMPIRICAL EVIDENCE FROM NIGERIA

“…Neneh and Van Zyl (2012) expressed that the survival of business tenet is dependent on the evidence of quality managerial principles and techniques in managing businesses which will steadily grow business performance especially in the applicability of business excellence in core facets of a business. However, business risk as the entirety of all risks a business organisation faces in the course of conducting its business activities (Dafikpaku, 2011 as cited Alaka et al, 2022). Earlier submission by Olsson (2002) as cited in Ajemunigbohun et al (2020) gave it as the risk of failing to attain required business targets as a result of inappropriate plans, limited resources or economic/competing situational dynamics.…”

“…that can assist priorities, operations, and resources, find out legal compliance, gaining performance targets, enhance pecuniary stability and predominantly, avert business losses and destructions to the (Alaka, Ajemunigbohun, & Balogun, 2022). Kleffner, Lee, and McGannon (2003) as cited in Obalola and Ajemunigbohun (2017) stipulated that business risk management is the step-by-step handling of operational and financial risk management in a bid to curtail the cost suitability of handling risks within the limits of business tolerance for risk.…”