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Zeitschrift für die gesamte Versicherungswissenschaft
Published in: Zeitschrift für die gesamte Versicherungswissenschaft 5/2019

31-07-2019 | Abhandlung

Price framing and consumers’ purchase intention on pay-how-you-drive tariffs

Authors: Andreas Musiol, Martina Steul-Fischer

Published in: Zeitschrift für die gesamte Versicherungswissenschaft | Issue 5/2019

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Abstract

Pay-how-you-drive (PHYD) is an innovative car insurance tariff offered by insurance companies, whereby prices are based on an individual’s driving style and mileage. In an experimental study, we analyze the effect of price framing on purchase intention for PHYD tariffs. Results demonstrate that consumers’ purchase intention for a PHYD tariff is higher for integrated price framing compared to segregated price framing. Also, we show that the amount of discount (surcharge) on the price moderates the effect of price framing on purchase intention for a PHYD tariff. Finally, we show that the sureness effect (i.e., sureness about having no unexpectedly high billing rates due to variation in driving style and mileage) mediates the effect of price framing and on purchase intention for PHYD tariff.
previous article Der Einfluss der Produktart und des Weiterempfehlungskanals auf den Erfolg von Weiterempfehlungen bei Versicherungen
next article Balancing growth, profitability and safety in the German insurance market

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Appendix
Available only for authorised users
Footnotes
1
The discount of 50 Euros consisted of three different parts. The largest part was a reward of 30 Euros for keeping the speed limit. An amount of 15 Euros was designed for reduced mileage. Finally, a reward of 5 Euros was provided for avoiding driving during weekend and nighttime (Bolderdijk et al. 2011).
 
2
Previous research has proven framing effects in terms of evaluating expenditures on consumer goods and services (Bettman and Sujan 1987), lottery portfolios (Thaler and Johnson 1990), risky investment portfolios (Steul 2006), or price presentations of disability insurance products (Johnson et al. 1993).
 
3
The average annual price for car insurance coverage in Germany, including third-party liability insurance and comprehensive coverage, is about 582 Euros (GDV 2018).
 
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Metadata
Title
Price framing and consumers’ purchase intention on pay-how-you-drive tariffs
Authors
Andreas Musiol
Martina Steul-Fischer
Publication date
31-07-2019
Publisher
Springer Berlin Heidelberg
Published in
Zeitschrift für die gesamte Versicherungswissenschaft / Issue 5/2019
Print ISSN: 0044-2585
Electronic ISSN: 1865-9748
DOI
https://doi.org/10.1007/s12297-019-00440-1

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