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Do sustainability attributes play a role for individuals’ decisions regarding unit-linked life insurance? A survey research on German private investors

Author

Listed:
  • Nadine Gatzert

    (Friedrich-Alexander-Universität Erlangen-Nürnberg (FAU))

  • Anna Kraus

    (Friedrich-Alexander-Universität Erlangen-Nürnberg (FAU))

Abstract

The aim of this paper is to investigate the relevance of sustainable product attributes as compared to ongoing costs and risk–return profiles when individuals choose funds underlying unit-linked life insurances. Regarding sustainability attributes, we focus on the product classification according to the Sustainable Finance Disclosure Regulation as a European regulatory transparency standard, and on sustainable investment strategies. We conduct two choice-based conjoint analyses using a German panel for unit-linked life insurances as well as fund savings plans as a financial product comparison. We estimate the relative importance, part-worth utilities, and the marginal willingness to pay for changes in product attributes. Our results suggest that private investors of unit-linked life insurances value sustainable product attributes and that they result in a slightly higher marginal willingness to pay, but risk–return indicators and especially ongoing costs are currently more relevant. We find further indications that sustainability attributes are less relevant in the setting of a unit-linked life insurance as compared to a fund savings plans setting.

Suggested Citation

  • Nadine Gatzert & Anna Kraus, 2024. "Do sustainability attributes play a role for individuals’ decisions regarding unit-linked life insurance? A survey research on German private investors," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 49(4), pages 719-746, October.
    • Handle: RePEc:pal:gpprii:v:49:y:2024:i:4:d:10.1057_s41288-024-00313-4
    DOI: 10.1057/s41288-024-00313-4
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    More about this item

    Keywords

    Sustainable funds; Unit-linked life insurance; Savings plans; SFDR; Investment behavior; German private investors;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • G52 - Financial Economics - - Household Finance - - - Insurance
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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