Economies 2023, 11, 33. https://doi.org/10.3390/economies11020033 www.mdpi.com/journal/economies Article Insurance Literacy: Significance of Its Dimensions for Insurance Inclusion in Uganda Archillies Kiwanuka 1 and Athenia Bongani Sibindi 2, * 1 Department of Accounting and Finance, Makerere University Business School, (MUBS), Kampala P.O. Box 1337, Uganda 2 Department of Finance Risk Management and Banking, University of South Africa (UNISA), P.O. Box 392, Pretoria 0003, South Africa * Correspondence: sibinab@unisa.ac.za; Tel.: +27-(0)-12-429-3757; Fax: +27-(0)-86-569-8848 Abstract: The aim of the study was to establish the significance of the individual components of insurance literacy—knowledge, skills, attitude and behaviour—in explaining insurance inclusion in Uganda. The study was correlational and cross-sectional by design. Hence, 400 responses were ob- tained from individuals who enrolled for insurance. A hierarchical multiple regression analysis was adopted to test the predictive power of the dimensions of insurance literacy on insurance inclusion in Uganda. Before performing correlational and regression analyses, the study variables were tested for parametric assumptions, convergent and discriminant validity, common method variance and exploratory factors. The results of the study revealed that knowledge, skills and attitude signifi- cantly and positively predicted insurance inclusion in Uganda. Contrary to prior studies, behaviour was found to have an insignificant positive influence on insurance inclusion in Uganda. Overall, the individual components of insurance literacy explained 38.5% of the variation in insurance inclusion in Uganda. Notably, the current study contributes to the nascent literature on insurance literacy and insurance inclusion. Earlier studies have ignored the insurance component of financial inclusion. The originality of this study lies in that it is the first to examine the significance of the individual dimensions of insurance literacy towards explaining insurance inclusion. The implication of this study is that policymakers should consider insurance literacy in national financial inclusion strate- gies and financial literacy programmes in order to foster insurance inclusion. Keywords: insurance inclusion; financial inclusion; insurance literacy; financial literacy; insurance knowledge; skills; attitude and behaviour; Uganda 1. Introduction Insurance inclusion has been underscored as a key driver towards economic growth and development in developed and developing economies (Bayar et al. 2021; Zulfiqar et al. 2020). As such, insurance serves as a risk management tool for societies by protecting people’s lives and mitigating untimely loss of income and property (Lin et al. 2019; Cheston et al. 2018). Accordingly, Cheston et al. (2018) connote insurance inclusion as a state of access to and use of appropriate and affordable insurance products for the un- served and underserved. Inclusive insurance seeks to remove market barriers that prevent insurance institutions from reaching the poor, unserved and underserved segments of society (Lal 2019). According to Castellani and Viganò (2017), the inefficiency of financial markets in emerging economies deprives individuals living in rural settlements of the ability to mitigate risk. On that note, insurance aids individuals in accessing credit, guar- anteeing savings and money transfer safety, and protecting middle- and low-income households from transactional financial losses (Dassanou and Sherchan 2018). Whereas significant progress towards insurance access improvement has been made globally, vast segments of the low-income population remain excluded from insurance in Citation: Kiwanuka, Archillies, and Athenia Bongani Sibindi. 2023. Insurance Literacy: Significance of Its Dimensions for Insurance Inclusion in Uganda. Economies 11: 33. https://doi.org/10.3390/ economies11020033 Academic Editor: Hans-Eggert Reimers Received: 30 November 2022 Revised: 9 January 2023 Accepted: 12 January 2023 Published: 17 January 2023 Copyright: © 2023 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses /by/4.0/).