Financial literacy, attitudes and purchase intention of insurance products in South Africa

Abstract

Although several studies have long recognized the importance of financial literacy in influencing financial behaviour, few investigations have looked into how financial literacy can be influenced by financial education and a company-sponsored finance blog to explain consumer attitudes and insurance purchase intentions. This study investigates the role of financial literacy in influencing attitudes towards insurance products and the purchase intentions for insurance products. The study used a quantitative technique with a convenience sample strategy in the form of online surveys, yielding a total of 217 replies. Descriptive statistics were calculated using SPSS to identify the percentage of respondents based on demographic variables and financial knowledge levels. Also, structural equation modelling (SEM) was used to test the various hypotheses in the conceptual model. Five out of the eight hypotheses were supported by the data, indicating the direct positive relationships between financial education, financial literacy, digital literacy, perceived helpfulness of company finance blog, and insurance product purchase intentions. Thus, these results suggest that financial education has a positive and significant impact on financial literacy. Also, the study found a positive relationship between insurance product attitudes and insurance product purchase intentions. However, the hypothesis that financial literacy will lead to insurance product purchase intentions was not significant. The study further found that digital literacy does not moderate the relationship between financial literacy and insurance product purchase intentions. Importantly, company-sponsored finance blogs had a positive and significant relationship between financial literacy and insurance product purchases. The implication is that company finance blogs can be leveraged to improve insurance product purchases even more. More so, financial education should be encouraged to improve financial literacy among South Africans. Positive attitudes toward insurance products should also be developed to improve favourable evaluation and adoption of insurance products, especially health insurance. The study suggests that financial and insurance education be increased, with a focus on improving the relevance, usefulness, and resourcefulness of their blog information to promote company products. Finally, the study concludes with important recommendations for insurance researchers, practitioners, governments, and policymakers