The Psychology of Insurance

Given the fact that we’re in the business of the mechanics of insurance (processing software), it had never occurred to us to wonder about its psychology … until it did. When we started to indulge our curiosity, one of the first things we found was an article from the December 2019/January 2020 edition of The Actuary called, aptly enough, “Insurance Psychology 101”. The article says this, in part:

It is unlikely the psychologists Dr. Edward Deci and Dr. Richard Ryan were thinking of digital technologies when they introduced their Self-Determination Theory in 1985, prescribing the human need for autonomy, competence and connectedness to sustain a sense of well-being and to flourish … Media psychology is essential to appeasing and understanding the insurance needs of future consumers whose native language is digital and a medium for human connectedness technology.

Well, there’s a mouthful, as well as a mind-full. But what, we wondered, is media psychology?

A Closer Look

Like so many things in actuarial science and psychology, some things are less complex than they appear. According to Dr. Pamela Rutledge, media psychology:

studies the interaction among individuals, groups, society, and technology to help consumers, developers, communicators, and society at large make good decisions … the advent of the Internet and social media has brought it to the fore … The advent of social media has made the landscape more interrelated and complex.

Granting we’re neither actuaries nor psychologists, what we derive from that definition is the apparent fact that consumers, developers, communicators, and society at large expect the Internet and social media to make things easier. What a coincidence. So, do we. That’s why we built the Finys Suite to be flexibly configurable and capable of adapting to emerging insurtech developments.

As for the psychology of insurance, a cynic might say people buy insurance because they’re paranoid. We tend to take more magnanimous view and believe people buy insurance to protect themselves from financial risk. That, too, seems sensibly simple.

Flip a Coin

In the end, it doesn’t really matter why people buy insurance or what media psychology is. What matters is that people do buy insurance, and we support the companies that sell it to them.