The Making and Breaking of Trust in Pension Providers: An Empirical Study of Pension Participants

Dalen, H.P. van; Henkens, Kène

doi:10.1057/s41288-018-0079-2

Cited by 17 publications

(21 citation statements)

References 27 publications

(12 reference statements)

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“…As for education, a higher level of education tends to deteriorate trust in insurance. This contrasts with previous results by Van Dalen and Henkens (2018) showing that more educated people trust more insurance companies offering pension products in The Netherlands. Yet, it is in accordance with the results of Fungácová et al (2019) regarding trust in banks.…”

Section: Main Regression Resultscontrasting

confidence: 99%

“…The paper also finds significantly lower trust in insurance among male respondents. The second paper by Van Dalen and Henkens (2018) investigates trust in pension institutions, including insurance companies in Netherlands. This paper finds that the perceived integrity, competence, stability and benevolence of insurance companies matter in assessing their trustworthiness.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Who Trusts Insurance? Empirical Evidence from Seven Industrialised Countries

Courbage

Nicolas

2019

SSRN Journal

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While the importance of trust in insurance is widely recognised, surprisingly, existing literature on the determinants of trust in insurance remains scarce. This paper investigates the determinants of trust in insurance in seven industrialised countries in Europe, North America and Asia using data from a recent insurance industry survey. We find that trust in insurance is higher among females, younger individuals, and less educated people. On the contrary, people who are more insurance literate have higher trust in insurance. Our findings also show that experiences with insurance are one of the most important determinants of trust in insurance, with the negative effect of a bad experience being more pronounced than the positive effect of a good experience. Finally, access to information related to insurance through the internet deters trust in insurance, while access to information through newspapers and magazines promotes it.

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Section: Main Regression Resultscontrasting

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Who Trusts Insurance? Empirical Evidence from Seven Industrialised Countries

Courbage

Nicolas

2019

SSRN Journal

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“…van der Cruijsen and Jonker (2019) find that trust in the pension fund's ability to pay pension benefits at all times depends on consumers' perceived pension funds' performance and personal characteristics. van Dalen and Henkens (2018) analyze trust in three types of pension providers: pension funds, banks and insurance companies. Pension funds are trusted most.…”

Section: Previous Studies and Hypothesesmentioning

confidence: 99%

Financial Knowledge and Trust in Financial Institutions

2019

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Using fourteen years of data on Dutch consumers' trust in financial institutions, we find that financially literate consumers are more likely to trust banks, insurance companies and pension funds, and the competence and integrity of the managers of these institutions. This holds both for broad-scope and narrow-scope trust. Although trust in respondents' own financial institutions is significantly higher than general trust in financial institutions, both forms of trust are positively related. Financially knowledgeable people are more likely to trust the prudential supervisor. Finally, our results indicate that trust in the supervisor is positively related to trust in the financial sector.

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“…In this case also, consumer preferences for SRI are relevant since investing in SRI may attract or alienate certain groups of participants. Even if pension fund participants cannot make any individual choices, pension funds are concerned about how they are evaluated and trusted by their participants (Van Dalen and Henkens, 2017), and their investment strategy may be one of the determinants of this. Accordingly, many Dutch pension funds already have of sustainable investment, and the importance sustainability is growing over time (DNB, 2016).…”

Section: Introductionmentioning

confidence: 99%

Household preferences for socially responsible investments

Rossi

Sansone

Soest

et al. 2019

Journal of Banking & Finance

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We analyze revealed and stated household preferences for socially responsible investments (SRI). Using a questionnaire specifically designed for this purpose and administered to a Dutch representative household panel, we investigate the actual and latent demand for SRI products. Respondents reported whether they owned SRI products and why or why not, but also answered stated choice questions on traditional investments and hypothetical socially responsible products with an explicit return penalty and/or an inkind compensation associated with lower return. Our results show that investors attracted by socially responsible financial products are more interested in the social product as such and show little interest in compensation. The magnitude of the penalty for investing in SRI is not diluting their investment intentions.Given the increasing size of Social Responsible Investments, the room for financial products with a specific devolution, i.e. going into a well-specified program, is of special interest for the financial industry.Our analyses aim to answer two main research questions. First, while most studies on the consumers' interest in SRI focus on financial market participant, we aim at analyzing the potential demand for specific SRI products in the complete population, using a representative survey of the Dutch adult population with questions on actual SRI investing and on hypothetical choices between specific SRI and non-SRI products. Using a representative sample is a clear advantage as it does not limit the size of the market and is also informative on the preferences of individuals who indirectly invest in financial assets, e.g. through their mandatory occupational pension.Second, we want to investigate whether potential investors accept a higher cost associated to ethical products (i.e. lower return or higher risk) or are just driven by the possibility of a higher return and see SRI as a good investment "niche" in the market. To this end, in the stated choice questions, two possible products are proposed: the first offers a lower monetary return due to the donation component, the second compensates more for the social choice, albeit with a non-monetary compensation (in kind).Results of our research are important for a large and diversified set of investors. Indeed consumer preferences for SRI are not only relevant for households who directly invest in financial markets. In the Netherlands, and many other countries with fully funded pensions, most individuals and households also save through mandatory participation in an occupational pension fund. In the Netherlands, most of these pensions are of a defined benefit nature, where the pension fund decides how participants' retirement savings are invested. Recent reform plans, however, tend towards increasing choice opportunities for participants, and one of the issues that has come up in this context is to give participants a say in the extent to which their pension savings will be invested in socially responsible products (de Beer et al, 2014). This raises...

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The Making and Breaking of Trust in Pension Providers: An Empirical Study of Pension Participants

Cited by 17 publications

References 27 publications

Who Trusts Insurance? Empirical Evidence from Seven Industrialised Countries

Who Trusts Insurance? Empirical Evidence from Seven Industrialised Countries

Financial Knowledge and Trust in Financial Institutions

Household preferences for socially responsible investments

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