The Study of the Effect of Inability to Provide Services on Customers’ Switching Behavior in Insurance Industry (Case Study: Dana Insurance)

Author Name(s): Neda Zamani, *Mohammad Hosein Hasani Sadraabadi
Author Email: dmhsadr@yahoo.com

Abstract

Today, gaining customer satisfaction regarding a product or service is one of the fundamental necessities of quality management systems and excellence models. It is because providing appropriate services and products which secures customer satisfaction with regards to the provided services and prevents customers’ switching behavior orientation. We should always pay attention that retaining the existing customers is much cheaper than attracting new customers, which indicates to the importance of companies’ efforts toward reducing customers’ switching behavior which in turn, indicates to the necessity of identifying the effective factors on customers’ switching behavior more than ever. To this end, the aim of the present study is to examine the effect of inability to provide services on customers’ switching behavior in insurance industry (case study: Dana Insurance) and for this purpose 385 of the customers of Dana Insurance Company were selected by using simple random sampling method for a population with unknown numbers and completed the research questionnaire. Content validity of this questionnaire was confirmed by experts in this field and its reliability was also confirmed by Cronbach’s alpha test which is equal of 0.84. In the end, data collected from research questionnaire was analyzed by using structural equations modeling test in LISREL 8.8 and results indicated that the model used in this study has a desirable goodness of fit. Model’s results also indicated that there is a significant relationship between inability to provide services and customers’ switching behavior in Dana Insurance Company. It was also indicated that emotional intelligence has a moderating role on the effect of inability to provide services on customers’ switching behavior in Dana Insurance Company. On the other hand, emotional commitment has a moderating role in the effect of inability to provide services on customers’ switching

Behavior in Dana Insurance Company. Results also indicated that personality characteristics don’t have any moderating role on the effect of inability to provide services on customers’ switching behavior in Dana Insurance Company.

Keywords

Inability to provide services, customers’ switching behavior, Dana Insurance

Introduction

Today, understanding and reacting to customers’ switching behavior is an inevitable aspect in efforts for survival in a competitive market (Jamali, 2007).

Simultaneously with the rise of customer-oriented movement and emergence of new angles in management studies, concept of customer behavior and change in customer behavior received so much of attention in studies related to organization; indicating that customers’ attitudes and behaviorsare changes considering the quality of services and the way they are provided in organizations and that they manifest in different positive and negative forms and eventually might lead to customers’ loyalty or customers might change their behavior and direction. In recent studies the relationship between perceived service quality and customer loyalty has been emphasized. Due to the positive and direct effect customer loyalty can have on organization’s profitability, paying attention to these types of behaviors can be one of the ways of increasing effectiveness of organizations which is of great importance (Zairi, 2000).

Insurance companies like so many other service centers are aware of the fact that increasing the rate of customer retention can haveaconsiderable effect on their obtained profit. Customers’ switching behavior in insurance companies has a sensitive role as one of the issues and challenges in insurance industry. Dana Insurance Company as one of the insurance companies active in the field of insurance in our country, yearly makes some investments toward absorbing and retaining its customers and any sort of positive expectations out of these investments and costs requires the identification of the effective factorson customer behavior more than ever. Considering this, it seems that identifying the effect of inability to provide services on customers’ switching behavior can provide us with useful information for determining organizational goals and behaviors. The reason that researcher in this study has choose this topic as research problem is first of all his personal interest in this topic as well as sensing the research society’s need to studying the effect of inability to provide services on customers’ switching behavior due to the fact that so far no study has been conducted on the topic of the effect of inability to provide services on customers’ switching behavior which reveals the necessity of conducting a study in this field. Therefore, with considering the above arguments and also the importance of succession in providing services and lack of change in customers’ behavior in Dana Insurance Company, for gaining higher levels of performance and providing better services and preventing customers’ switching behavior and following that attracting more customers, we can claim that the concern of the researcher of this study is also to study the effect of inability in providing services on customers’ switching behavior in Dana Insurance company. Therefore, main research problem is as following:

How does inability to provide services affect customers’ switching behavior in Dana Insurance Company

Conclusion 

Based on the results of research hypothesis analysis, it is concluded that in Dana Insurance Company in Tehran, inability to provide services in effective on insurance customers’ switching behavior. Considering research hypothesis 1, “inability to provide services is effective on customers’ switching behavior in Dana Insurance Company.” Hence, it can be concluded that inability to provide services has a positive and significant effect on customers’ switching behavior in Dana Insurance Company and therefore, research hypothesis 1 is confirmed. Considering research hypothesis 2, “emotional intelligence has a moderating role in the effect of inability to provide services on customers’ switching behavior in Dana Insurance Company”. Hence, it can be concluded that emotional intelligence as a moderating variable in the effect of inability to provide services on customers’ switching behavior in Dana Insurance Company has a positive and significanteffect; therefore, research hypothesis 2 is confirmed. Considering research hypothesis 3, “personality characteristics don’t have a moderating role in the effect of inability to provide services on customers’ switching behavior in Dana Insurance Company.” Hence, it can be concluded that personality characteristics as a moderating role in the effect of inability to provide services on customers’ switching behavior in Dana Insurance Company has a negative effect. Therefore, research hypothesis 3 is rejected. Considering research hypothesis 4, “emotional commitment has a moderating effect in the effect of inability to provide services on customers’ switching behavior in Dana Insurance Company.” Hence, it can be concluded that emotional commitment as a moderating role in the effect of inability to provide services on customers’ switching behavior in Dana Insurance Company hasa positive and significant effect. Therefore, research hypothesis 4 is confirmed.

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