How transparency affects investment-linked insurance products

Thomas Poufinas and Dimitrios Zygiotis
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Dimitrios Zygiotis: Organization University of Athens & Athens University of Economics and Business

International Advances in Economic Research, 2017, vol. 23, issue 4, No 4, 405-418

Abstract: Abstract Investment-linked insurance products exhibit a series of advantages versus direct investments, such as accumulation of retirement funds, tax benefits, and waiver of premiums in the case of disability. However, they are perceived as more complex and difficult compared to plain investments. Consequently, there is a need for disclosures, so that retail investors - insured can make well-informed decisions. Such disclosures have so far been uncoordinated. The EU has identified the need for uniform transparency rules in the packaged retail and insurance-based investment products market. The EU made an effort to enhance protection for investors - insured via a regulation effective in 2017. Such an effort is expected to restore retail investor confidence lost in the aftermath of the crisis. In this paper we attempt to quantify the effect of the existing transparency rules in the various member states to have an indication of what to expect as soon as the new uniform rules are implemented. We use customer satisfaction and trust so as to measure the effect of transparency. We find that increased transparency positively affects both measures.

Keywords: customer satisfaction; key information documents; Packaged Retail Insurance-based Investment Products; transparency; trust (search for similar items in EconPapers)
JEL-codes: G10 G15 G20 G30 J10 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/s11294-017-9661-9

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