Are Maltese consumers risk averse? : a study on how the consumer behaves when purchasing motor insurance particulary when choosing the level of cover

Abstract

Purpose: Primarily, the purpose of this dissertation is to investigate whether the Maltese insurance consumers are risk averse. Such a topic, will need an in depth study of: how consumers behave, what process they go through, decisions made when purchasing insurance decisions made when purchasing insurance. Design Methodology: The research will entail investigating the behaviour of a number of consumers according to the type of cover they select when taking out a motor policy. Particularly the classes that will be taken into consideration will be Third Party only; Third party Fire and Theft and Comprehensive Cover. Through this research the dissertation will establish what different consumers choose from the different levels of cover. Other sources of research will be used particularly company data. The dissertation will take into consideration the 5 local insurance companies namely: Middlesea Insurance, GasanMamo Insurance, Atlas Insurance, Elmo Insurance, Citadel Insurance. The dissertation will thus use the statistics collated by these companies as a base for research. Consequently, through combined primary and secondary data collected by distributing questionnaires one shall be able to come to an answer whether how much the Maltese are risk averse when purchasing their cover of Motor Insurance. Findings: This research shall be valuable to insurance companies since consumers decide on which cover to choose on the criteria of how much risk averse they are. Therefore, by distinguishing on the basis of this characteristic between potential policyholders, one can combine a more suited Motor Policy for each segment. This dissertation will segment the local market by a number of options such as: age, gender, location, income earned, etc. Limitations: Due to the size of this research, this dissertation will only investigate the statistics held by the 5 largest local insurers as these represent the majority of all motor policies. Furthermore a sample of 100 people will be used which should also give a fair analysis of consumer behaviour. Originality / Value: Hence, highlighting the importance to monitor potential policyholders in terms of their risk perception would enable companies to analysis methods by which they could design appropriate products around such perception needs. The end result should be expected to be an increase in sale of Motor Insurance Policies and a greater satisfaction of product.