The Moderating Role of Financial Literacy in the Relationship Between Risk Perception and Insurance Adoption in Southeast Nigeria

This study examines the moderating role of financial literacy in the relationship between risk perception and insurance adoption among adults in Southeast Nigeria, using a sample drawn from Anambra, Enugu, and Imo states. Risk perception is widely established as a theoretical antecedent of insurance demand, but empirical evidence from the Nigerian context suggests that positive risk perceptions do not reliably translate into insurance adoption, implying that other variables moderate this relationship. Financial literacy, encompassing knowledge of financial products, risk concepts, and insurance terminology, is hypothesized to strengthen the risk perception-insurance adoption relationship by enabling individuals to act on perceived risk with appropriate financial instruments. This research employs a quantitative survey design with 480 adults selected through multi-stage cluster sampling across the three states. The survey measures risk perception using validated psychometric scales, financial literacy using knowledge and application subscales, and insurance adoption status across multiple product categories. Hierarchical regression analysis and moderation testing using the PROCESS macro assess the interaction effect of financial literacy on the risk perception-adoption relationship. Preliminary findings are expected to confirm a significant positive moderation effect, suggesting that risk awareness alone is insufficient to drive insurance adoption among financially illiterate individuals. The research contributes to behavioral insurance theory and recommends integrated risk communication and financial literacy programs. Keywords: Financial Literacy, Risk Perception, Insurance Adoption, Moderation Analysis, Southeast Nigeria.