Insurance and Bird ‘flu
Morgan Warms to His Theme

Revealed Preferences?

Philip Macalister found the results of Sean Carroll's review of drivers of adviser behaviour surprising - because commission was rated relatively low on the list. This may be a result of what economists call 'revealed preferences'. In survey's advisers tend to rate commission low as a driver - and other factors higher. Yet when behaviour is considered, the preference revealed tends to be higher.

Another interpretation is worth noting. Asteron's commissions are pretty good. So it would not be altogether surprising that this rates lower. Interestingly, few people have picked up on the economic impact of underwriting performance. Higher acceptance rates and speeds can today have a much bigger effect on realised commission than rates of commission. No wonder, then, that this was rated highly as a driver.


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