Shedding Light on Non-Financial Risks – a European Survey

Shedding Light on Non-Financial Risks – a European Survey — January 2012

4. The (Fair?) Cost of Protection

Statistics are as follows: •  Regarding transparency, information and governance, 37% of respondents are not willing to pay anything, 49% are ready to pay something and 14% to pay a lot. •  Regarding the financial responsibility of the industry, 44% of respondents are not willing to pay anything, 48% are ready to pay something and 9% to pay a lot. •  Regulation on distribution seems more of a tough sell. Some 66% of respondents are not willing to pay anything, 29% are ready to pay something and 5% to pay a lot. •  Finally, regarding stricter obligations of restitution, 49% of respondents are not willing to pay anything, 39% are ready to pay something and 13% to pay a lot.

Looking at the country-by-country figures, differences are rarely significant. It appears, though, that Luxembourg and Ireland are significantly less willing to pay for the regulation on the financial responsibility of the industry.

Figure 4.2.2: Country group average of willingness to pay for protection How much are you willing to pay for greater protection?

“Fr” is France, “UK” is the United Kingdom, “Ge+Au+Nl” is Germany, Austria and the Netherlands, “Lux+Irl” is Luxembourg and Ireland, and “RoE” is the rest of Europe. Answers are coded in the following manner: 0 for 0, 1 for +, 2 for ++.

Figure 4.2.3: Willingness to pay for protection by type of respondent firm How much are you willing to pay for greater protection?

Answers are coded in the following manner: 0 for 0, 1 for +, 2 for ++.

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An EDHEC-Risk Institute Publication