Accessing the impact of farmers’ awareness level and risk management perception on agriculture insurance satisfaction: Mediating role of non-financial satisfaction

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Despite the government’s financial support and promotion by the regulator, the agriculture insurance market is still in the nascent stage in Nepal. The paper aims to examine how awareness level and risk management perception affect the farmers’ satisfaction, taking non-financial satisfaction as a mediating factor. The study was conducted in two metropolitan cities, Pokhara and Bharatpur, in Nepal. Cluster and purposive sampling design was applied to select the respondents. Opinions were obtained through the structured questionnaire from 400 farmers with experience in agriculture insurance. The survey instrument had two parts. The first part was related to demographic information, while the second part measured attitude to risk management, clients’ awareness of insurance, financial satisfaction, and non-financial satisfaction. Almost three forth of the respondents (74.75%) were males and more than half (52%) possessed more than 8 ropani of land. Descriptive statistics, inferential statistics, exploratory factor analysis, confirmatory factor analysis and structural equation modelling were used to arrive at conclusions. The results revealed that respondents’ awareness toward agriculture insurance is the most agreed construct (mean = 4.35), followed by financial satisfaction (mean = 3.88), non-financial satisfaction (mean = 3.70), and risk management attitude (mean = 3.5). Although the results did not confirm the mediating effect of non-financial satisfaction on financial contentment and awareness level, a partial mediation effect exists between risk management attitude and financial satisfaction. Financial serenity and non-financial gratification have the strongest association. This study suggests executives and regulators expand risk management capacity and awareness initiatives to increase client satisfaction and loyalty to crop insurance.

Acknowledgment
The University Grants Commission, Nepal, is acknowledged for the financial support to conduct the study under the FRG MGMT 4-2019/20. The support of MBA students Mr. Dhan Bahadur Jagari and Lalit Bahadur Shahi is highly appreciated for their fieldwork as enumerators.

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    • Figure 1. Level of awareness toward insurance risks and satisfaction
    • Figure 2. Measurement model results
    • Figure 3. Schematic presentation of the structural model
    • Table 1. Socio-demographic statistics
    • Table 2. Descriptive statistics
    • Table 3. KMO and Bartlett’s tests
    • Table 4. Exploratory factor analysis
    • Table 5. Items loading
    • Table 6. Discriminant validity
    • Table 7. Structural equation modeling
    • Conceptualization
      Ramkrishna Chapagain, Rabindra Ghimire, Lija Boro
    • Data curation
      Ramkrishna Chapagain, Rabindra Ghimire, Lija Boro
    • Formal Analysis
      Ramkrishna Chapagain, Rabindra Ghimire, Lija Boro
    • Methodology
      Ramkrishna Chapagain, Rabindra Ghimire, Lija Boro
    • Resources
      Ramkrishna Chapagain
    • Software
      Ramkrishna Chapagain, Lija Boro
    • Supervision
      Ramkrishna Chapagain, Lija Boro
    • Validation
      Ramkrishna Chapagain, Rabindra Ghimire
    • Visualization
      Ramkrishna Chapagain
    • Writing – original draft
      Ramkrishna Chapagain, Rabindra Ghimire, Lija Boro
    • Writing – review & editing
      Ramkrishna Chapagain, Rabindra Ghimire, Lija Boro
    • Investigation
      Rabindra Ghimire, Lija Boro
    • Project administration
      Rabindra Ghimire