PROBLEM BRIEF
INCREASING TAKE UP OF HOME AND CONTENTS INSURANCE FOR NATURAL DISASTER COVERAGE
Your task:
Your goal is to develop a behavioural change intervention to encourage an increase in the take up rate of home and contents insurance to improve coverage of insurance for natural disasters. Your solution needs to be innovative, creative, feasible, realistic and grounded in behavioural science.
Your idea will be evaluated on three dimensions- potential impact, feasibility of implementation, and the plausible use of behavioural insights.
The problem:
Areas prone to fires, cyclones and floods are facing escalating insurance costs, as the frequency and severity of extreme weather events increase. Premiums have risen sharply over the past decade as insurers recover costs of the increasing number of insurance claims and factor in future risks. In a recent report, the Australian Competition and Consumer Commission found that the average cost of home and contents insurance has increased dramatically, with northern Australia particularly affected.
Those not insured or underinsured will be financially devastated. Insurance premiums will rise, and as a result, more and more people will opt out of insurance, exacerbating the financial and social impacts of natural disasters.
Who are you targeting?
Home owners (home and contents insurance) and/or renters (contents insurance). It is possible to focus on a particular demographic group.
How can you assess effectiveness?
Are you able to test your intervention? What method(s) would be optimal? How would you collect data if you could? What would be your measure of success? Chances are if an intervention would change your behaviour, it would change other people’s too.
Your 2,000 word submission should include:
Title
Give your idea a catchy and descriptive name.
2. Intervention Summary
What are the most important aspects of your idea? How would you summarise it?
3. Target Group and Behavioural Insights
Who is your target group? What behaviour(s) are you going to change? Why these behaviours? How have you used behavioural insights in your intervention? Why will this use of behavioural insights make your solution effective?
4. Feasibility
How feasible is your solution? What would it cost? What other resources are required? What is needed – technically, organizationally, legally, financially or otherwise – for this proposition to be implemented? What ethical issues does the solution raise? How do you propose to address them?
5. Impact
How likely is the solution to influence increasing insurance take up? Why? What is the potential it could achieve? Can it be applied to larger populations? Will it continue to work for as long as needed?
Resources for applying behavioural insights
- Read the EAST Principles, developed by the Behavioural Insights Team, which identifies four principles for building effective behavioural change interventions.
- Another great resource from the Behavioural Insights Team is the MINDSPACE framework
- Browse the web and look for other great sources on applied behavioural science. For example, OECD’s Behavioural Insights and Public Policy report can be read online for free.
- Cialdini, R. B. (2001). Influence: Science and practice (4th ed.). Boston: Allyn & Bacon. This book is essential for anyone interested in changing attitudes or behaviour. It comes in many editions, all pretty much the same.
- Halpern, D. (2015). Inside the Nudge Unit. Penguin. Behavioural insights used to influence a wide range of behaviours in the real world.
- Thaler, R. & Sunstein, C. (2008). Nudge: Improving decisions about health, wealth and happiness. Penguin. A hugely influential book synthesising a wide range of ideas and introducing the concept of “choice architecture.”
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