Research On The Psychological Mechanism Of Auto Insurance Loss And The Innovation Of Risk Management Methods Based On Sensation Seeking

Recently,many insurance companies,both domestically and internationally,have used “non-traditional” categorical and underwriting variables,such as credit scores and computer-monitored driving behavior,to help insurers predict losses.In this context,there is an urgent need to demonstrate why these “non-traditional” variables are relevant to losses and to find their psychosocial or behavioral basis.By doing so,we can help insurance companies,regulators,and customers understand why new underwriting variables are used and promote social/regulatory acceptance of these risk assessment variables.In addition,there is an urgent need to innovate insurance companies’ risk management approaches to meet the needs of the insurance industry to perform social management functions in the new era.Therefore,from the perspective of psychology,this paper collates,analyzes,and summarizes the literature related to insurance,psychology,and safety science at home and abroad.This study considers some psychological factors that may have an impact on auto insurance losses and risk management,such as sensation seeking,risk perception,personal responsibility,and psychological effects,and explores these factors from both theoretical and empirical analyses.Then,the psychological mechanism of auto insurance loss based on sensation seeking is discussed,and on this basis,risk management innovation is realized.Specifically,the main research content and findings of this paper are divided into the following three parts.First,this study explores the psychological mechanisms of sensation seeking and other psychological factors on insurance losses from the theoretical and empirical levels and constructs a psychological mechanism model.Based on the inductive analysis of the previous literature,this study explores the influence mechanism of each variable and proposes corresponding hypotheses for the relationship between each variable.Then,I construct the influence mechanism of sensation seeking on auto insurance loss through risk perception,personal responsibility,insurance purchasing decisions,and driving behavior.When the theoretical model is constructed,this study compares the scales used for data collection in the past for each variable and selects the widely applicable scales with reasonable reliability and validity,and designs matching questionnaires for the questionnaire survey.After the data were collected and organized,I analyzed the demographic characteristics of the sample data and the reliability of the scales.Then,I used Smart PLS software to construct structural equation models to verify the research hypotheses proposed in this paper.This study concludes that the psychological variable of sensation seeking increases the probability of risky driving behavior and thus the number of insurance accidents through two paths.The first path is that when people have a high level of sensation seeking,their perception of risk decreases,resulting in more risky driving behaviors;the second path is that when people have a low level of sensation seeking,drivers who choose to take out high insurance coverage will suffer from the morale risk effect,then reducing their sense of responsibility in driving and engaging in more risky driving behaviors.Second,I explore the morale risk effect of auto insurance based on sensation seeking and personal responsibility.To analyze the morale risk effects proposed in previous literature and found in the previous part of this paper,a set of controlled psychological experiments was designed to measure the subject’s sense of responsibility in two situations: in the first group,subjects were prompted to have purchased insurance and,in the second group,subjects were prompted to have purchased insurance.The morale risk was investigated by comparing the differences in the two groups of subjects’ sense of responsibility using the Mann-Whitney U nonparametric test,independent samples t-test,and simple effects analysis.This study concludes that both sensation seeking and insurance purchasing decision-making interact to cause a decrease in personal responsibility and thus morale risk.Specifically,for low sensation seekers,reminding subjects of the purchasing of auto insurance significantly reduced their sense of responsibility while driving,resulting in morale risk;for high sensation seekers,whether or not they were reminded of the purchasing of auto insurance did not significantly affect their sense of responsibility while driving.Finally,I explore auto insurance risk management methods based on the interaction between sensation seeking and advertising type.To intervene in people ’ s risky driving behavior and propose innovative risk management methods,I design a two-factor,two-level psychological experiment based on the fact that people with different levels of sensation seeking respond differently to different types of advertisements(humor-appeal ads vs.fear-appeal ads).The two-factor two-level psychological experiment was designed to target humor-appeal ads or fear-appeal ads according to the insured’s sensation seeking level,and then to compare the risk perception levels of different subgroups of subjects using independent sample t-test and simple effects analysis.This paper concludes that there is a significant dichotomous interaction between personal sensation seeking and advertising type,indicating that the two can synergistically maximize people’s risk perceptions during driving.Specifically,low sensation seekers had higher risk perceptions after viewing fear-appeal ads,while high sensation seekers had higher risk perceptions after viewing humor-appeal ads.As a result,insurance companies or government authorities can design intervention methods for risky driving behaviors by targeting different types of safe driving advertisements to drivers with different levels of sensation seeking to achieve risk management.Overall,the findings of this study suggest that drivers ’ sensation seeking,risk perception,personal responsibility,and insurance purchasing decision will influence their driving behavior,which in turn is directly related to insurance losses.Risky driving behavior will lead to an increase in risky losses,which in turn will cause an increase in insurance payouts or insurance losses.Therefore,insurance companies can refer to the above variables to develop more precise risk management methods as a way to reduce the frequency of traffic accidents and lower insurance payout losses to a greater extent.For example,accurately releasing safe driving advertisements based on sensation seeking;classifying insurance rate classes based on sensation seeking;improving the bonus-malus system based on driving behavior;and increasing awareness of cautious driving based on morale risk.