DETERMINANTS OF POLICYHOLDERS’ ATTITUDE TOWARDS MOTOR INSURANCE FRAUD IN NIGERIA

Abstract

Policyholders’ attitudes towards motor insurance fraudulent behaviour are shaped by numerous factors. The pervasive nature of fraud continues to pose serious challenge to the insurance industry. This study examines the influence of rising premium, driving experience and income level on policyholders’ fraudulent behaviour in Nigeria. A quantitative survey design was adopted, with the aid of convenience sampling technique to collect data from 395 out of 400 respondents determined through Taro Yamane’s (1967) formula. The result revealed that rising premium, driving experience, and level of income significantly influence policyholders’ attitudes towards motor insurance fraud. Despite the observed low positive correlation coefficients of all three independent variables, the regression analysis suggests a weak negative predictive link between all three predictors and favourable attitude towards fraud. The study recommends that insurance companies and regulators should; ensure clear and transparent premium adjustment, develop and implement appropriate educational initiatives for inexperienced drivers, emphasize prompt settlement of claims, and ensure effective collaboration to reinforce anti-fraud strategies and public awareness. More research is suggested on regional differences in fraudulent activities across Nigeria, effects of digitisation on fraud and a comparative study of motor insurance fraud and other insurance policies to guide proactive and needed interventions.