Regulating consumer finance: Do disclosures matter? The case of life insurance
Publication dateNov, 2017
DetailsNIPFP Working Paper No. 212
AuthorsMonika Halan and Renuka Sane
We use a sample survey based experiment to estimate the effect of simplified life insurance disclosures. We randomise survey respondents into one of four product advertisements: 1) a baseline product with no additional disclosure; 2) disclosure of the actual rate of return on the product; 3) disclosure of the rate of return and a benchmark return of a similar product; and 4) the rate of return, benchmark return and product features of a more cost-effective competing product. We test if these incremental disclosures affect customer views of the product, and the intention to purchase. We find that relative to the baseline treatment, only treatment 2 had an effect on product perceptions. Treatments which show additional data did not have a differential effect relative to the baseline treatment. None of the treatments had any impact on the intention to purchase.