The insurance industry continues to get a bad rap, considered by most consumers as a necessary evil. This view was validated last week by a Knowledge @ Wharton blog, which states that insurance is the “most misunderstood industry.” What’s significant about their statement, however, isn’t that it includes regulators among those clueless about how our industry works; it’s that it includes insurance executives.
In a new book titled, "Insurance and Behavioral Economics: Improving Decisions in the Most Misunderstood Industry," Wharton Professors Howard Kunreuther and Mark Pauly join Urban Institute researcher Stacey McMorrow in a study of consumers, insurance leaders and policymakers. Their conclusion? All three groups illustrate an “overall failure to grasp how insurance can fulfill the roles it is designed to play: reducing future losses and financially protecting those at risk.”
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