Insurance Company Employees' Financial Expertise and Practices: Implications on Benefit Participation and Satisfaction

15 Pages Posted: 9 Apr 2012

See all articles by Mark L. Power

Mark L. Power

Iowa State University - Department of Accounting and Finance

Tahira K. Hira

Iowa State University - Department of Human Development and Family Studies

Date Written: Spring 2010

Abstract

Employers continue to shift financial decision‐making responsibility for employee benefits to employees. This article examines employees' financial practices, financial expertise, and levels of benefit participation and overall satisfaction. We show that there are significant differences in employees' financial practices and financial expertise based on socio‐demographic characteristics. While levels of benefit satisfaction and employer ranking are high, significant differences in how employees feel toward their employer exist. Employees more highly value traditional benefits than nontraditional benefits, but satisfaction with benefits was high regardless of take‐up rate. We also find that respondents are more knowledgeable over experiential financial concepts than more specific financial concepts like qualifying conditions for a traditional individual retirement account. Employer‐sponsored financial education programs, which increase employee understanding of employer‐provided benefits and their importance to employees' financial well‐being, should improve overall employee satisfaction, loyalty, and productivity.

Suggested Citation

Power, Mark L. and Hira, Tahira K., Insurance Company Employees' Financial Expertise and Practices: Implications on Benefit Participation and Satisfaction (Spring 2010). Risk Management and Insurance Review, Vol. 13, Issue 1, pp. 111-125, 2010. Available at SSRN: https://ssrn.com/abstract=2036890 or http://dx.doi.org/10.1111/j.1540-6296.2009.01171.x

Mark L. Power (Contact Author)

Iowa State University - Department of Accounting and Finance ( email )

Carver Hall
Ames, IA 50011-2063
United States

Tahira K. Hira

Iowa State University - Department of Human Development and Family Studies ( email )

Ames, IA 50011-2035
United States
(515) 294-2042 (Phone)
(515) 294-0565 (Fax)

HOME PAGE: http://www.eng.iastate.edu/tkhira/

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