VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY VIETNAM JAPAN UNIVERSITY -------------------- PHAN MINH HAI PHAN MINH HAI EVALUATE THE FACTORS THAT IMPACT VIETNAMESE EVALUATE CUSTOMER’S THE FACTORS THAT IMPACT BUYINGVIETNAMESE CUSTOMER’S DECISION FOR NON-LIFE BUYINGINSURANCE DECISION PRODUCT FOR NON-LIFE INSURANCE PRODUCT MASTER’S THESIS MASTER OF BUSINESS ADMINSITRATION MASTER THESIS BUSINESS ADMINISTRATION Hanoi, 2019 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY -------------------- PHAN MINH HAI EVALUATE THE FACTORS THAT IMPACT VIETNAMESE CUSTOMER’S BUYING DECISION FOR NON-LIFE INSURANCE PRODUCT MAJOR: BUSINESS ADMINSITRATION CODE: 60340102 RESEARCH SUPERVISORS: ASSOC. PHAM THI LIEN PROF. HIROSHI MORITA Hanoi, 2019 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ACKNOWLEDGEMENT This is all my respectful gratitude that I place on express sincere thanks to all the precious guidance, support and encouragement that I receive during researching and completing Master of Business administration program at Vietnam Japan University. Thanks to the guidance of Associate Professor Pham Thi Lien – Vietnam Japan University and Professor Hiroshi Morita – Yokohama National University, who always support and give me many in-times valuable instructions during my research, this thesis has been completed.
I own my heartfelt gratitude to my supervisors for the advice given, orientations and instructions. Through many discussions during the research process, with their insightful suggestions and extensively science knowledge, I can improve research and completing for my Master thesis. I also wish to express my sincere gratitude to Ms. Huong, Master of Business administration program assistance for her in-times support and providing information required any point of time during study time at Vietnam Japan University.
I also want to express my heartfelt and grateful gratitude for my family support as they constant encourage and support me. Phan Minh Hai LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ABTRACT In this research, the author aims examine the factors that affect the customers’ inclination and purchase decision on non-life insurance products and measure the different impacts weights of these factors, based on the results to propose some recommendation for insurers to improve service quality in the future. To archive the reliable answer to the research’s question, this study adopts qualitative research method, online survey via social media platform and face-to-face interview was applied to collect the data from 319 respondents. The results suggest that there are two factors indirectly impact on consumer’s purchase decision through consumer’s inclination, which are personal income and risk recognition, and four factors directly impact on the consumer’s final decision, including consumer’s inclination, sale promotion, insurer’s reputation and insurer’ online communication quality.
The author suggests some recommendations for insurance companies to enhance business activities, including diversifying products, building a professional consultant teams, and improve companies imagine. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CONTENTS CHAPTER 1: INTRODUCTION. Purpose of the study. Objectives of the study.
Subjects and scope of the research. Structure of the research.5 CHAPTER 2: LITERATURE REVIEW. Overview about insurance. The differences between types of insurance.
Vietnam’s insurance market overview. Customer behavior concept. Customer buying decision. Factors impact on consumers’ buying decision.
Consumer risk recognition. Insurer’s online communication quality. Theoretical model and research hypothesis .22 CHAPTER 3: RESEARCH METHODOLOGY. Data collection process .28 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 4: DATA ANALYSIS AND DISCUSSTION.
Multiple regression method. Finding and discussion .46 CHAPTER 5: LIMITATION AND FUTURE RESEARCH .50 CHAPTER 6: CONCLUSTION AND IMPLICATION .53 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF TABLES Table 3. Describe of measured items. Personal profile of the respondents (Source: author).
Reliability analysis – Cronbach’s alpha index (Source: author). Exploratory factor analysis (Source: author). Statistical measures of the first stage of the multiple regression analysis (Source: author). Statistical measures of the first stage of the multiple regression analysis (Source: author) .46 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF FIGURES Figure 2.
Non-life insurance revenue growth rate in particular business sectors (billion VND) (Source: Bao Viet Securities). Consumer Decision-making process (Source: Charles W. Factors Influencing Consumer Behavior (Philip Kotler & Gary Armstrong, 2016). Model of rationale for insurance service purchase decision making (source Aurelija Ulbinaitė and Marija Kučinskienė (2013)).
Hypothetical research model about consumer purchase decision toward insurance service (Source: author). Data collection process (Source: Yin (2003), Eisenhadt (1989)) .27 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 1: INTRODUCTION 1. Introduction After the Renovation (or “Doi Moi” in Vietnamese) campaign was implemented since 1986, Vietnam has been becoming an emerging country in not only in Southeast Asia area, but also in the whole world, which achieving significant growth and improvements. Vietnam’s gross domestic product (GDP) has growth sharply since Renovation, from only 6,5 billion in 1990 to 223,8 billion in 2017 1.
The rising in living standard lead to the creation of new consumer habit. Some service industries are experiencing sharply growth rate, like health care, tourism and especially financial service. The non-life insurance market plays an increasingly important role in the development of a country in general and the whole world in particular. The role of non-life insurance reflects through economic stabilization, mitigation of losses and risk prevention for organizations and individuals participating who bought insurance in society when unfortunately encountering risks; contributing to creating jobs and ensuring social security, etc.
In daily life as well as in production, although people may pay attention to prevent possible risks, anything could be happened. For example, due to natural disasters such as storms, floods, earthquakes, etc. cannot be forecasted accurately, it would result in property damages, life losses and production and business stagnations. Social environment is also a cause of risk, like traffic accidents, occupational accident, etc.
People have taken many measures to minimize losses caused by natural and social environmental risks. One of the measures is transferring the costs of risks to the insurance companies. In Vietnam, in financial service field, insurance market has grown sharply in recent years and continues to be regarded as a prospective market. In particular, the Vietnam’s demographic and economic development conditions are expected to create further demand for insurance services both in non-life and life sectors.
In the 1 https://data.org/indicator/NY.CD?locations=VN 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com last decade, Vietnam’s insurance sector changed the legal system to transform insurance market from a State-owned monopolist field to an intensive competitive industry for both domestic and foreign insurers as new entrants. Despite the economic downturn rooted from the financial crisis since 2008 in United State, with an average annual GDP growth rate around 6% last 10 years2, not only domestic companies but also foreigner enterprises are interesting in entrant Vietnam’s insurance market. It is obviously that there is an intensive competition in Vietnam’s insurance market. Gain marketing share from other competitors is a difficult mission for each company.
While Vietnam’s customer still not acknowledge about the core and additional benefit of insurance products, most of exiting companies have to use the price strategy to attract consumer. With the booming of e-commerce, customers are now shifting from traditional consumer to digital natives. It is raising an emergency issue for insurance: What are the main factors which impact Vietnamese customers’ purchase decisions for non-life insurance products? 1. Problem statement Non-life insurance is a guarantee and reciprocity products, is the type of risk transfer through which the insurance company commits to pay compensation when an insurance event occurs in relation to material loss, human accident and responsibility of the insured, so non-life insurance is very social.
In Vietnam, regarding to the rapidly increase of income, people are becoming more aware of the issue of ensuring their safety, especially in saving, consumption and investment behavior for safety. However, in general, the level of interest, understanding and implementation of insurance activities of people is still limited. Therefore, non-life companies in Vietnam are being struggled to engage with potential customers. Because customers are misunderstanding or underestimate the values of non-life insurance products, they seem tend to be driven by price or promotion over the purchasing decisions.net/longform/mot-nam-kinh-te-nhieu-ky-luc-3861228.html 2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com However, in recent years, because of the booming of social media and e- commercial trend, information could be accessed much easier, cheaper, faster and more detail than ever before, they could research for the price comparison as well as insurance condition, insurers’ reputation and claims’ experience.
Moreover, nowadays customers demand insurance films provide them intelligibility, accessibility products that they could be experienced in other fields. Customers, through the platform they choose, demands prices and benefit policies which they want, supports and consultations when they need and only want to have contact from insurers when they have claims or renewals. Base on insurers reputation and regular basis, customer will happily to choose other companies and have little inclination to build last long relationships. When the customers are considering the benefits and values rather than the price, they offer policies and conditions which tailored their requirements.
However, not many insurers in Vietnam, both domestics and foreigners could recognize current situation. Understanding about the customers is lagging behind the new trend of business when their techniques are changing dramatically by the signification improved of internet and telecommunications’ businesses while they still concentrate on products, risks management and ratings. Comparing with other financial or service sectors that focus on customer experience like bank or tourism, insurers need to change the way they approach to their customers. Purpose of the study Through the theoretical research on the factors affecting the buying decision toward non-life insurance products of insurers participating in Vietnam’s market, I hope that could help them to have further understanding about their customers and improve their business activities.
In this research, I also attempt to establish a model which reflects the interplay between the several factors and their impact weights on different stages of the non- life insurance purchase decision making. 3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Objectives of the study In this study, I focus on the following specific objectives: - To examine the factors that affect the customers’ inclination and purchase decision on non-life insurance products; - To examine the different impacts weights of these factors; - To examine the relationships between customers’ inclination and purchase decision. Research question To solve the above problems and purpose, I attempt to figure answers for the following specific questions: Main question: - What are the main factors which impact Vietnamese customers’ purchase decisions for non-life insurance products? Sub questions: - Is there significant different in the impact weights among factors that influent Vietnam’s customer purchase decision toward non-life insurance products? - What factor has the most powerful effect on Vietnam customer purchase decision? 1.
Subjects and scope of the research Research subject: Issues related to the buying decision on non-life insurance product and the factors affecting customers’ buying inclination and decision. Scope of research: this research focus on Vietnamese who are possible customers or purchase non-life insurance products before of companies participating in Vietnam’s insurance market. 4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Structure of the research This research including 6 chapter.
Chapter 1 is the overview of this this research, introduction about the research’s problem and research’s questions. Chapter 2 is an overview about the Vietnam’s insurance market, previous paper on consumer’s behavior and insurance sector, and proposal research model. Chapter 3 is about the research methodology and survey design. In chapter 4, the author discusses about the data analysis process and results.
In the chapter 5, this study mentions about the research limitations and future study. And finally, in chapter 6, the author discusses about this paper’s implications. 5 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 2: LITERATURE REVIEW 2. Overview about insurance 2.
Insurance concept Currently there are many different concepts of insurance, because the concept of insurance is built on each aspect of research fields (such as society, legal, economic, technical, etc.