Contemporary Studies of Insurance Behavior

Abstract

The existing approaches to insurance decision-making and behavior research are analyzed and categorized in the paper. The introduction describes the present state of the Russian insurance market and tendencies therein. The first section presents two fundamental approaches to understanding insurance purchase behavior, the classical ‘rational’ approach (where the consumer is supposed to have analyzed the possible risks and insurance options to make a reasonable and well-grounded purchase decision) and the contemporary ‘irrational approach’ based on the idea that the classical theory fails to explain many of the documented patterns of insurance behavior. The second section describes the principal factors that influence insurance decision-making and behavior at its different stages (decision concerning the necessity of insurance, choice and purchase of insurance policy, interaction with the insurance company in case of insured event occurrence, and decision to continue or discontinue insurance). Particular attention is given to the first two stages that are focused on in most empirical studies. The concluding section of the paper formulates a number of questions for future research, including the issues of applicability of the planned behavior theory to insurance behavior, the associations between the factors that underlie it, as well as the role of subjective psychological and cultural variables in influencing insurance behavior.