2014年-FCA英国金融行为监管局_gi_add_ons_experimental_consumer_research_report_131页_4mb

Summary of the Study on Add-on General Insurance Product Sales: Experimental Consumer Research

Core Content

This report presents the findings of an experimental consumer research study commissioned by the Financial Conduct Authority (FCA) to investigate how the presentation of add-on general insurance (GI) products affects consumer behavior and market outcomes. The study was conducted by London Economics and YouGov, involving 1,514 UK residents who participated in an online experiment simulating the process of purchasing primary products and associated insurance.

The experiment tested various treatment conditions to assess the impact of different presentation strategies on:

• Search behavior for primary products and insurance
• Insurance take-up rates
• Prices paid for insurance
• Consumer errors and losses due to suboptimal choices
• Outcomes for sellers, such as profit margins

Main Treatments

The study included the following treatments:

1. Insurance only: Respondents searched for and potentially bought standalone insurance for products they already owned.
2. Up-front add-on: Respondents searched for and bought a primary product and had the option to purchase add-on insurance for it.
3. Add-on at the POS: Insurance offers were only revealed after the primary product was selected.
4. Add-on at the POS + easy alternatives: Respondents could search for alternative standalone insurance offers alongside the add-on insurance.
5. Add-on at the POS + harder alternatives: Searching for alternative insurance was more difficult, making it harder to compare with add-on insurance.

The study also tested different framing conditions for insurance prices:

• Yearly price frame: Insurance prices were presented as lump sums.
• Monthly price frame: Insurance prices were presented as monthly equivalents.
• Unlabelled frame: Respondents searched for abstract products, not real ones, to assess if product type influenced behavior.

Key Findings

1. Search Behavior

• The number of searches for primary products was similar across all treatments.
• When respondents searched for insurance only or in the 'Up-front add-on' treatment, search behavior was comparable.
• However, in treatments where both primary and insurance needed to be searched, the presentation of insurance significantly influenced the search process.

2. Insurance Take-up

• Insurance take-up was higher when respondents had access to alternative insurance offers.
• In the 'Add-on at the POS + easy alternatives' treatment, respondents were more likely to choose standalone insurance than add-on insurance.
• When searching for standalone insurance was harder, take-up of add-on insurance increased.
• There was no difference in insurance take-up between the 'Up-front add-on' and 'Add-on at the POS' treatments.

3. Price Paid for Insurance

• The average price paid for insurance was influenced by the timing and accessibility of the offer.
• In the 'Up-front add-on' treatment, respondents paid more for insurance compared to the 'Insurance only' treatment, due to the combined search for both primary and insurance.
• Delaying the insurance offer to the point of sale resulted in a 15% increase in the price paid for add-on insurance compared to the up-front offer.
• Allowing access to alternative insurance offers reduced the average price paid by over a third.
• The price of standalone insurance was relatively consistent (around 62-63 units of the experimental currency), while the price of add-on insurance increased significantly when searching for alternatives was harder.

4. Errors and Losses

• Error rates were higher when insurance was presented up-front, with a 13 percentage point increase compared to the 'Insurance only' treatment.
• Respondents who viewed the insurance offer only at the point of sale had a 7 percentage point higher error rate (24%) than those who saw the offer up-front (17%).
• Loss measures reflected the actual financial impact of these errors, with the highest losses observed when respondents did not search sufficiently or too much.

5. Socio-Demographic and Cognitive Factors

• The study found that socio-demographic characteristics (such as age, income, education, and risk aversion) had significant effects on decision-making and outcomes.
• Cognitive ability and financial literacy also played a role in influencing the likelihood of errors and the price paid for insurance.

6. Learning and Task Complexity

• Learning effects were observed, with some respondents improving their decision-making over multiple rounds.
• Time spent on tasks varied, with more complex treatments leading to longer search times and higher error rates.

7. External Validity

• The results were statistically significant and robust to socio-demographic controls.
• However, the study acknowledged limitations in external validity, as the experimental setting may not fully reflect real-world purchasing behavior.

Conclusion

The study demonstrates that the presentation of add-on insurance significantly affects consumer behavior, including search patterns, insurance take-up, and the prices consumers are willing to pay. Delaying the insurance offer to the point of sale and limiting access to alternative insurance options led to higher prices and more errors. Conversely, providing alternative insurance options and presenting them in monthly terms reduced the price paid and encouraged more informed decision-making. These findings contribute to the FCA's broader understanding of how add-on insurance products impact consumer welfare and market dynamics.