Impact of Economic Volatility on Policyholders Attitude towards Purchase of Insurance Policies in Plateau State

The assessment of policyholders’ attitude towards the purchase of insurance policies during
economic volatility is one of the major objectives of insurance industry in Nigeria. The fear of
perceived economic downturns shapes consumer preferences regarding different types of
insurance policies which results to decline in insurance policy purchases, loss of trust,
dissatisfaction, policy cancellations or adjustments in coverage and low policy renewal rates
among policyholders. Considering the consumer risk behaviours policyholders display during
inflationary periods or financial inclusion in fragile economic settings, this study examines the
impact of economic volatility on policyholders' attitude towards the purchase of insurance
policies in Plateau State. A descriptive survey design was employed, using both primary and
secondary data sources. Data from 200 respondents were analyzed using descriptive and
inferential statistics, including multiple regression analysis. Findings from the study revealed
that income instability, inflation and unstable exchange rate were found to significantly reduce
policyholders’ willingness to renew or purchase new policies in Plateau State. The study
recommends that insurance firms in Plateau State should adopt inflation-indexed insurance
policies to safeguard policyholders from the challenges pose by economic volatility towards
the purchase of insurance policies.