The application of consumer behaviour analysis in regulating disclosure requirements for insurance-based investment products in the European Union

Abstract

The purpose of this thesis is to examine and criticise the extent to which legislators and financial regulators utilise consumer behaviour analysis in the application of disclosures for insurance-based investment products across the European Union. This research outlines the key disclosures found in the legislative framework related to the distribution of insurance-based investment products. It further explores how financial decision making can be made through mental heuristics along with the tools that can be used to capture such subconscious information. By then analysing case studies, this study concludes that the application of consumer behaviour in the creation of disclosures for insurance-based investment products is sorely limited. The benefits of consumer behaviour analysis are drawn from similar sectors and on this basis a proposal is made to ensure that human heuristics are considered by legislators and regulators to build more effective disclosure regimes. The study discusses that since the subconscious, natural reactions that consumers have to information dissemination are being largely ignored, despite a wider acknowledgement of the importance of considering mental heuristics, disclosures are not fulfilling their goals. This study provides legislators and regulators with a substantiated recommendation to establish disclosure requirements on unbiased, information gathered through neurophysiological tools.