Dr Beata Nowotarska-Romaniak
Akademia Ekonomiczna w Katowicach
Katedra Marketingu
Loyalty within Market of Insurance Service.
Customer’s behaviours constitute part of human being’s behaviour in general. In widest meaning, it is defined as each respond (or aggregated responds) of organism on incentives from environment with assumed attitude toward this environment. Customer’s behaviours form base for loyal activity of firm. Awareness of process of shaping loyalty plays significant role in company’s activeness.
Loyalty is complex category. Interdisciplinary, ipso facto difficult to defined seemingly. It is associated with attachment, reliability, faithfulness and commitment. Briefly explained means faithfulness and devotion to particular firm or person. (2) Loyal customer is a person, who regularly and repeatedly shops and uses products or services offered by particular firm; spreads positive information about this firm and is resistant for promotional practices of competition.(3) Loyal customer is a customer who is “tided” to firm and isn’t surrendering himself on actions of rivalry (so called customer difficult to obtain) as well as represents within market, accordingly to agreements, interests of “his” company. (4) The matter of customer’s loyalty has considerable meaning for firms, which have direct contact with final buyers of products or services. But real success makes firms, which customers repeatedly shop with.
Starting point of all customer’s undertakings, including those from consumption sphere, which shape loyalty attitudes, are needs. Functioning and whole human activity alike are inseparably linked to the formation of needs and pursuing to satisfy them. By needs it should be understood state (or process in which this state appears) of lacking something and at the same time factor, which motivates particular person to action in order to change this state. Through feeling of need the process of thinking about making purchase starts.
Characteristic feature associated with need of completing purchase of service of insurance is its economical character. For that reason economical determinant, which significantly shapes and conditionates behaviours of customers on market of insurance service is income investigated from both, the global perspective (distribution of national income) and perspective of household or individual.
Furthermore, it should be included to those factors, level and relation of insurance premiums and also offer of insurance service.
Insurance premium constitutes one of the most important elements which affect decision about purchase insurance service. It is worth to emphasize that changes in low linked to the organization of insurance sector introduced in 1990 created opportunities to developing and broadening market offer of insurance companies. Reach offer of insurance service and good localization of branches make it easier to buy, but more difficult to chose.
Besides income, level of insurance premium and offer of insurance service, significant factors affecting customers behaviours are age, education and place of residency. In order to draw causes of customers behaviours within insurance market above factors should be taken into account, analyzing influence of them. It should be done collectively, not each factor separately. Factors conditioning customers’ behaviours in the sphere of loyalty often modify each other ipso facto create new conditions which shapes those behaviours.
The most important element of customer’s behaviour is undertaking choices. Customer undertakes choices continually in different situations and sets. Some of those choices are undertaken rapidly, often without a second thought while some of them are results of long consideration. To most important decisions undertaken be a person should be included market decisions. Those are constructed with choices undertaken by customer (individual or household) related to satisfying needs, degree and range as well as methods of satisfying them.
Customers have free hand in choosing insurance company, service of which they will be using. Furthermore, they can choose offer provided by not only one company (real loyalty) but by several of them at the same time (shared loyalty)
In order to define loyalty among customers of insurance market, survey research was conducted between November 11th 2008 and February 20th 2009. Survey included customers (selection randomly – purposeful) who during mentioned time were visiting insurance companies (Allianz Polska, Allianz Życie, Amplico Life, Commercial Union, Compensa, Comenta Życie, Ergo Hestia, Ergo Hestia Życie, Generali, Filar, ING Nationale Nederlanden, PZU S.A., PZU Życie, Tryg Polska, PTU, Warta, Warta Vita) in big cities situated in province of Silesia (Katowice, Gliwice, Bielsko-Biała, Sosnowiec, Tychy, Bytom). It was received 982 correctly filled questionnaires. Results were analyzed in sections sex (57% males, 43% females), education (29% higher, 59% secondary, 12% professional) age (53% 18-30 years, 36% 31-50 years, 11% above 50 years) place of residence (82% city, 18% rural areas).
The research shows, that:
a) 52% of questioned have been using sole insurance company, 32% two, 9% three , 1% four or more and 6% none of insurance company. (graph 1 and 2 presents percentage share particular insurance companies with recognition between life and assets insurances)
b) Among customers which use sole insurance company, 53% didn’t see reason for using another one, because their usage was narrow.
c) Respondents who are using several insurance companies as cause gave a different level of insurance premium as well as coverage.
Tab. 1 Share of companies of assets insurance in sell of insurance service.
|
|
Name |
% |
|
1 |
PZU S.A. |
43,6 |
|
2 |
WARTA S.A. |
10,1 |
|
3 |
ERGO HESTIA S.A. |
8,1 |
|
4 |
Allianz Polska S.A. |
7,5 |
|
5 |
HDI Asekuracji S.A. |
4,7 |
|
6 |
COMPENSA S.A. |
2,7 |
|
7 |
Generali S.A. |
2,2 |
|
8 |
UNIQA S.A. |
2,2 |
|
9 |
Rest of 37 firms |
18,9 |
Source: PIU (The Polish Chamber of Insurance) : legislation in force on December 31st 2008
Tab. 2 The share of life insurance companies in sell of insurance service.
|
|
Name |
% |
|
1 |
PZU
Życie S.A. |
28,5 |
|
2 |
Commercial
Union – Życie S.A. |
12,3 |
|
3 |
Aegon
S.A. |
10,9 |
|
4 |
Amplico
Life S.A. |
7,4 |
|
5 |
Alianz
Życie Polska S.A. |
6,4 |
|
6 |
ING
S.A. |
5,4 |
|
7 |
Europa
Życie S.A. |
4,7 |
|
8 |
Skandia
Życie S.A. |
3,6 |
|
9 |
Nordea
TUnŻ S.A. |
3,5 |
|
10 |
Rest
32 firms. |
17,3 |
Source:
PIU (The Polish Chamber of Insurance): legislation in force on December 31st 2008
Analysis
of questions also referred to nature of insurance service with recognition of
insurance of assets (Table 3) and life (Table 4).
Tab.3 The most popular insurance of assets.
|
|
Type of
insurance |
% of answers* |
|
1 |
Liability insurance of drivers |
88 |
|
2 |
Auto-Casco (or
package of car insurance) |
60 |
|
3 |
Property
insurance |
57 |
|
4 |
Compulsory insurance
of profession. |
49 |
|
5 |
Firm insurance |
16 |
|
6 |
Other |
12 |
|
7 |
None |
4 |
*Total
percentage isn’t equal to 100 due to fact of multiple choices.
Source:
Own study
Tab. 4 The most popular life insurance
|
|
Type of life
insurance |
% odp.* |
|
1 |
Insurance in
case of death |
76 |
|
2 |
Extra insurance
(NNW, LS) |
51 |
|
3 |
Insurance with
investment |
47 |
|
4 |
None |
10 |
*Total
percentage isn’t equal to 100 due to fact of multiple choices.
Source:
Own study
After analyzing results it can be stated, that customers use only basic products and do not fully exploit wide offer of insurance. It is caused by poor knowledge of customers or level of insurance premium.
Respondents also answered on question regarding to factors which determine their choice of service. They had opportunity to cross several answers.
Tab. 5 Factors determining choice of insurance service according to business clients.
|
|
Factors determining choice of insurance service |
% of answers* |
|
1 |
Level of
premium |
89 |
|
2 |
Competence of
staff |
49 |
|
3 |
Financial
results of insurance company |
53 |
|
4 |
Rapidity of
service |
42 |
|
5 |
Brand of
insurance company |
57 |
|
6 |
Quality of
service |
39 |
|
7 |
Procedures |
17 |
*Total
percentage isn’t equal to 100 due to fact of multiple choices.
Source:
Own study
The results of research showed in table 4 unequivocally indicate, that the most important determinant for client who is making choice about insurance service is level of premium, therefore price (89% of respondents), than brand of insurance firm (57%); subsequently financial results (53%) and competence of staff (49%). Customer, who previously used insurance service, also follows quality of service (39%) and rapidity of service (42%). This distribution of answers is promising for insurance companies, in case of possibilities of shaping loyal attitudes.
It is also assumed that important role belongs to frequency of using of service. It was researched, that frequency of using of insurance service increase with rise of income (the higher income, the higher interests in insurance service), whereas among non-economical factors, frequency of using insurance service is affected by education, as first thing.
Summarizing, customer while making decision about purchase of insurance service is choosing service, which possess characteristics what he is looking for. However, while making decision, client very rarely is fully acknowledged with all companies existing on the market as well as with types of service offered by them. For that reason, decisions about purchase are determined mostly by level of premium, ergo price, and familiarity with brand or brands. Recognition discussed above, may be considered as significant base for directions and tools of shaping loyalty of customers of insurance companies.