Putting Behavioral Economics to Work for Insurance [Video]

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Getting to the heart of what drives consumer behavior can be daunting. Insurance companies are no strangers to trying to predict human behavior – after all, underwriting relies on looking in the rearview mirror of experience to forecast the future of a given risk. However, insurers are finding that…

Getting to the heart of what drives consumer behavior can be daunting. Insurance companies are no strangers to trying to predict human behavior – after all, underwriting relies on looking in the rearview mirror of experience to forecast the future of a given risk. However, insurers are finding that more insights are needed, and while big data is certainly a game changer, there remains the reality of our unpredictable human nature.

“Wouldn't economics make a lot more sense if it were based on how people actually behave, instead of how they should behave?” - Dan Ariely, Predictably Irrational.

That’s where behavioral economics (BE) comes in. Through this field of research, businesses can better understand the why and how of buyer behavior – and thereby find ways to “nudge” customers toward specific outcomes.

Recently, I sat down with behavioral scientist Namika Sagara, PhD, to discuss what behavioral economics is and how it can benefit the insurance industry. See the video below for highlights from our discussion on how BE can help sell insurance, and the top three BE concepts that are important for insurers to know.

For background information on behavioral economics and how it works, read my last blog or recent article.


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