Experimental Evidence on the Willingness to Pay for Insurance with Sustainability Components

Monday, 18 November 2024

10:30 AM – 12:00 PM

Venue: Gaia Lecture Theatre 5 (#ABS-02-LT5) 

Chairperson: Asst Prof Jinggong Zhang

Abstract

We conduct an incentive-compatible laboratory experiment to investigate the willingness to pay (WTP) for insurance contracts with different sustainability components and without sustainability components. Participants significantly increase their WTP for contracts with a sustainability component, the sustainability-based

excess WTP ranges from 17% to 28%. We find some evidence for an increase in the excess WTP for greater sustainability components, but the increase in the WTP does not necessarily cover the costs of the higher component. A higher educational degree is associated with a lower excess WTP, while age and gender do not significantly impact the excess WTP for sustainability components.

About the Speaker

Timo Greve is a second-year PhD candidate at the University of Hamburg, holding both a Bachelor’s and Master’s degree in Business Mathematics. Before starting his PhD at the University of Hamburg, Timo Greve worked as an actuarial consultant for Ernst & Young. His research focuses on corporate demand for insurance and sustainability in the insurance industry.