THE INSTITUTIONALIZATION OF DECEPTIVE SALES IN LIFE INSURANCE: Five Sources of Moral Risk

Interview and ethnographic data are used to show how deceptive sales practices are rife and institutionalized in the life insurance industry. The data are analysed using the concept of 'moral risk': the paradoxical tendency of the structure and culture of the insurance institution to facil...

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Bibliographic Details
Published in:British journal of criminology 2006-11, Vol.46 (6), p.993-1010
Main Authors: Ericson, Richard V., Doyle, Aaron
Format: Article
Language:English
Subjects:
Consumer goods industries
Consumers
Cultural studies
Data analysis
Deception
Deceptive advertising
Ethnographic research
Homeowners insurance
Individualism
Industry
Institutional aspects
Institutionalization (Social)
Insurance
Insurance agents
Insurance industry
Insurance premiums
Insurance providers
Insurance regulation
Labour force
Life insurance
Life insurance companies
Misrepresentation
Morality
Risk
Risk and Crime: Shifting Moral Boundaries
Risk aversion
Sales
Sales management
Sales Workers
Salespersons
Solidarity
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Summary:Interview and ethnographic data are used to show how deceptive sales practices are rife and institutionalized in the life insurance industry. The data are analysed using the concept of 'moral risk': the paradoxical tendency of the structure and culture of the insurance institution to facilitate and encourage risky behaviour on behalf of the various players in the insurance relationship, in this case behaviour by insurance companies and their agents that puts consumers at risk through deceptive selling. We give empirical evidence of five key sources of moral risk that are part of the enduring structure and culture of life insurance sales. Although moral risk has been pervasive in life insurance sales since the birth of the industry, it articulates with key contemporary social tendencies: the responsibilization of the individual consumer, the erosion of the social safety net, fragmentation, individualism and the attenuation of family ties, the growth of a 'flexible' labour force, and the downloading of regulatory responsibility from the state. Deceptive sales practices corrode trust and promote yet more individualism, erasing the potential of insurance as a mechanism of social solidarity.
ISSN:0007-0955
1464-3529
DOI:10.1093/bjc/azl066