Research Note: Discounts, Cashbacks, and Soft Toys: The Impact of Promotions on Consumer Decisions in the General Insurance Markets

We conducted an online experiment simulating the experience of purchasing insurance, to understand how promotions could impact price comprehension and decision making in the general insurance market.

Read the Research Note (PDF)

Evidence from the experiment demonstrates that the presence of promotions can undermine consumers’ ability to select the best insurance deal and correctly assess policy premiums. These effects are particularly pronounced when promotions closely resemble cash discounts (such as retail vouchers, loyalty points and cashbacks) or are incorporated into underlying insurance prices.

This research informed the General Insurance Pricing Practices Final Rules (PS21/5) which make it clear that both cash and cash-equivalent promotions will need to be reflected in the renewal and equivalent new business prices.


Flo Farghly, Max Spohn, Cherryl Ng 


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