The determinants of choosing insurance as a risk financing option in managing risk : evidence from food and beverage manufacturing companies in Nigeria

Abstract

This study explores the determinants influencing the choice of insurance as a risk financing option in the food and beverage manufacturing industry in Nigeria. The research employs a mixed-method approach, combining quantitative data from insurance uptake records and qualitative interviews with key stakeholders in selected food and beverage manufacturing firms. The primary purpose is to reveal the major determinants in the decision-making of enterprises engaging in insurance solutions rather than other risk management strategies. Preliminary results indicate that regulatory requirements, financial stability, risk exposure levels, and the history of loss incidents are the main factors driving the risk-financing calculation. In addition, this research focuses on the intricate interplay of corporate governance and risk management frameworks as well as the subsequent impact of external economic factors on these practices. Through the analysis of these complex and unique features, this study is added to the already-existing stock of understandings pertaining to risk management paradigms, especially when it comes to the context of recent developments in Nigeria and other comparable economies. It provides industry-related information that not only makes academic theories more understandable but also supplies practical conclusions for corporate executive strategies and policymakers as well. Ultimately, by enhancing the understanding of risk management dynamics within the food and beverage sector, this study endeavors to fortify the resilience and bolster the financial performance of companies operating within this domain amidst an ever-evolving landscape of challenges and opportunities.