Title: The Effect Of Behavioural Biases On The Performance Of Insurance Sector In Nigeria
Authors: Ajayi, Foluso Isaac, Oluyide, Sopefoluwa Eunice and Akosile, Mary Oluwayemisi
Volume: 10
Issue: 9
Pages: 90-96
Publication Date: 2026/09/28
Abstract:
The impact of biases on the efficiency of Nigeria's insurance market was the focus of this research. In particular, the study looked at how herding behaviour, regret aversion, overconfidence bias, and loss aversion affected insurance industry performance. Primary data was gathered via a standardised questionnaire that was distributed to workers of chosen Nigerian insurance businesses. A quantitative research design was used for this purpose. We used descriptive statistics and multiple regression analysis to sift through 168 usable responses. A combined impact of behavioural biases on insurance sector performance was shown to be statistically significant (F = 150.656, p < 0.05). Overconfidence bias, loss aversion, herding behaviour, and regret aversion accounted for 78.7 percent of the variance in the insurance sector's performance, according to the coefficient of determination (Rē = 0.787). The insurance sector's performance was positively and significantly impacted by overconfidence bias (? = 0.308, p < 0.05), herding behaviour (? = 0.276, p < 0.05), and regret aversion (? = 0.110, p < 0.05). There was no significant influence of loss aversion on organisational performance (? = 0.003, p > 0.05). Overconfidence bias, herding behaviour, and regret aversion significantly improved performance, but loss aversion had no significant impact on performance, according to the study, which found that behavioural biases are important determinants of organisational performance in the Nigerian insurance sector. In order to enhance decision quality and organisational performance, the study suggests that insurance firms should implement behavioural decision-making training, strengthen decision processes based on evidence, incorporate behavioural risk management into corporate governance practices, and promote continuous professional development.