Policymakers in developing and emerging countries are facing higher risk that is related to natural disasters in comparison to developed ones because of persistent problem of supply-side bottleneck for disaster insurance. Additionally, lower insurance consumption, higher disaster risk, and high income elasticity of insurance demand have worsened the loss consequences of natural disaster in these markets. In this context, current study for the first time argues that the supply side bottleneck problem has its origin in peculiar pattern of disaster consumption owing to memory cues. The study finds that relatively higher frequency of natural disasters acts as a negative memory cue and positively impacts insurance consumption. On the other hand, a relatively lower frequency of natural disasters adversely impacts insurance consumption in the background of variation in risk aversion behavior. For this purpose, current study has based its work on Mullainathan (2002), which builds its argument around memory cues.
This article studies the comparative efficiency of information communication technology (ICT)-enabled platforms in the property and casualty (P&C) domain by studying moderating role of risk aversion. This slow rate of ICT-enabled channel in property and casualty insurance (PCI) domain does not gain ample attention in the extant literature. The present article argues that the impact of ICT enabled platforms may have different outcomes on PCI consumption due to moderating role of risk aversion. In insurance literature, risk aversion is a critical factor. Therefore, the current study has empirically tested the direct and interaction (with risk aversion) effects of ICT and mobile platforms on PCI demand in developing countries. The current study has found that secondary education positively impacts adoption of mobile platforms whereas tertiary education positively impacts adoption overall ICT-enabled selling platforms. However, the uncertainty avoidance index adversely impacts both the selling channels in PCI domain.
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