infonet-economy

Decision delegation to professionals is supposed to lead to better decisions for consumers. But sometimes the delegation of insurance decisions is a choice without awareness for the ones who delegate. This paper analyses consumers` awareness of the individual responsibility that is involved in the delegation of financial decisions to a surrogate. Surrogates often have to deal with conflicts of interests especially related to their remuneration. It is questionable whether consumers who delegate insurance decisions to such surrogates consider themselves as well responsible for these decisions. None of the current policy proposals in the EU or Switzerland consider it necessary to raise consumers` awareness of who is responsible for a delegated insurance decision. Our results indicate that delegating financial decisions impairs consumers` perception of individual responsibility and thus may trigger less learning effects for future decisions. Our finding suggest that minimizing conflicts of interest through disclosure of price differences across distribution channels (online versus insurance advisors) can provoke a shift in channel usage as an unintended policy consequence. This research provides insights for further elaboration of the EU Insurance Distribution Directive proposal and similar regulations in Switzerland.