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Trust in insurance: The importance of experiences

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  • Christophe Courbage
  • Christina Nicolas

Abstract

This paper investigates the predictors of trust in insurance and the importance of experiences in a cross‐country setting using a recent insurance industry survey conducted in seven industrialized countries. Preliminary data analysis reveals a very high prevalence of bad experiences with insurance whereby more than 50% of respondents acknowledge having had a bad experience with insurance. Our main findings show that experiences with insurance are one of the most important factors influencing trust in insurance, with the negative effect of a bad experience being more pronounced than the positive effect of a good experience. We also find that trust in insurance is higher among females, younger and less educated individuals, while being lower among individuals with higher insurance literacy. Additionally, access to insurance information through the internet is associated with lower trust in insurance, while higher trust is observed among individuals using newspapers and magazines.

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  • Christophe Courbage & Christina Nicolas, 2021. "Trust in insurance: The importance of experiences," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 88(2), pages 263-291, June.
    • Handle: RePEc:bla:jrinsu:v:88:y:2021:i:2:p:263-291
    DOI: 10.1111/jori.12324
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    References listed on IDEAS

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    3. You-Shyang Chen & Chien-Ku Lin & Yu-Sheng Lin & Su-Fen Chen & Huei-Hua Tsao, 2022. "Identification of Potential Valid Clients for a Sustainable Insurance Policy Using an Advanced Mixed Classification Model," Sustainability, MDPI, vol. 14(7), pages 1-22, March.
    4. Nicolas, Christina & Tarazi, Amine & Ozturk Danisman, Gamze, 2023. "Disentangling the effect of Trust on Bank Lending," Journal of Economic Behavior & Organization, Elsevier, vol. 210(C), pages 360-378.
    5. Martin Eling & Irina Gemmo & Danjela Guxha & Hato Schmeiser, 2024. "Big data, risk classification, and privacy in insurance markets," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 49(1), pages 75-126, March.
    6. Lynn Conell‐Price & Carolyn Kousky & Howard Kunreuther, 2022. "Encouraging resiliency through autoenrollment in supplemental flood insurance coverage," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 89(4), pages 1109-1137, December.

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