Insurance literacy is one of the most important components of customers’ financial knowledge and like other industries, the insurance industry needs to measure the relevant factors that affect the performance, efficiency, penetration rate, and customers’ perception, according to Public Relations Office, IRC.
Given the significance of this issue, IRC has prepared and released the research report namely “Customers’ Insurance Literacy: Evidences from Surveyed Data”. The report is written by Dr. Asadollah Naghdi, Director of Social Studies Desk of IRC, with the cooperation of Mohammad Khalilian and Mahboobeh Rueentan. It is a translation of the results of a survey conducted in the U.S. where some experts have attempted to measure the insurance literacy among the customers in order to examine their knowledge, self-esteem, and decision-making capacity.
The results indicated that customers have less knowledge and low level of certainty in decisions related to insurance. It was also found that insurance literacy has the highest correlation with financial education and personal assets. Insurance literacy is also correlated with the customer’s certainty in making insurance-related choices and the relevant information resources. By comparison, those customers that prefer the unofficial information resources such as family or friends showed low level of financial literacy.
The studies in the national level also indicated that the more financial and insurance literacy rate of the people are higher, their inclination to invest in insurance products will be strong. In light of this, understanding customers’ decision-making sources and the quality and quantity of the variables affecting their knowledge and skill deem essential for the insurance market policy-makers and managers.
The extent to which customers have more knowledge and skill, they receive and purchase more suitable and desirable services. Thus, the insurance companies will have upsells and customers more satisfaction. The study of the financial and insurance literacies as the reasons for people’s inclination and preferences in investing in voluntary and commercial insurances is significant per se.
Also, due to the positive effects of promoting customers’ insurance literacy in productivity and institutional trust, it is necessary for the insurance industry to use its entire capacity to train and make customers aware by holding forums, providing educational contents, publication of professional books, introduction of insurance issues in public broadcasting corporations, preparing and disseminating multimedia education, and addressing insurance law in professional journals. All of these will help to increase information, advance knowledge, and create insurance-related dialogs in the society, among the scholars and managers with the aim of promoting citizens’ and customers’ insurance literacy.
If interested to download and read the Persian full text of the aforementioned research report, you can access it by clicking on the following link: http://www.irc.ac.ir/fa-IR/Irc/4946/Articles/view/14643/1479.