What Drives High-Quality Insurance Advice? An Analysis of Factors in Insurance Advisory Services

Abstract

Poor-quality financial advice can have severe consequences for individuals’ financial security and public trust in the insurance sector—yet the drivers of advisory quality remain poorly understood. This paper investigates the factors that influence the quality of insurance advice in Europe, using a survey data on 4,827 insurance intermediaries across 13 countries. We apply the vignette-based methodology to measure the service quality. By evaluating both the accuracy of product recommendations and their alignment with normative utility-based rankings, we examine how intermediary characteristics, firm environment, and performance indicators shape advisory outcomes. The results reveal that while professional training improves advice quality in simple scenarios, it fails to translate into better decisions for complex products. Moreover, usage of digital tools only enhances advice quality when paired with higher education, and self-confidence and signalling may even mask deficiencies in competence. Our findings suggest that improving the quality of insurance advice requires targeted training, smarter technological integration, and a shift from surface-level professionalism toward client-centred advisory practices.