Selection of Insurance Company Among Variable Unit Life Policy Holders: An Exploratory Factor Analysis
Keywords:
variable unit life (VUL) insurance policy, exploratory factor analysis, Philippines, business management, insurance studiesAbstract
This study delves into the factors influencing the choice of insurance companies by variable unit life (VUL) policyholders, a topic of widespread interest among all policyholders. The research aims to shed light on the buying preferences of VUL policyholders and explore the practical implications that emerge from the study's findings. A total of 277 participants, pre-qualified by enumerators from various bancassurance firms in Davao Region with active VUL policies, were selected through a combination of stratified and purposive sampling techniques. Employing exploratory factor analysis, the study identified critical variables considered by policyholders in their selection of insurance companies. Out of 46 items evaluated by participants, 12 were highlighted, leaving 34 items that revealed eleven dimensions significantly influencing the decision-making process for choosing a life insurance company offering VUL products. The key factors identified include customer service relations, employee expertise, the service culture of the company, product portfolio, marketing activities, product features, the brand name of the company, employee professionalism, company ownership, company tenure, and additional services offered. These elements represent the criteria policyholders prioritize when selecting an insurance company for their VUL policies.
References
Ahn, Y. B., & Park, H. C. (2023). Sustainability Management through Corporate Social Responsibility Activities in the Life Insurance Industry: Lessons from the Success Story of Kyobo Life Insurance in Korea. Sustainability, 15(15), 11632.
Akotey, O. J., Osei, K. A., & Gemegah, A. (2011). The demand for micro insurance in Ghana. The Journal of Risk Finance, 12(3), 182-194.
Araullo, K. (2024). Philippines' Insurance Commission resolved 100% of all complaints in 2023. Insurance Business Magazine. Retrieved from https://www.insurancebusinessmag.com/asia/news/breaking-news/philippines-insurance-commission-resolved-100-of-all-complaints-in-2023-475068.aspx.
Bandalos, D. L., & Finney, S. J. (2018). Factor analysis: Exploratory and confirmatory. In The reviewer’s guide to quantitative methods in the social sciences (pp. 98-122). Routledge.
Bartholomew, D. J., Knott, M., & Moustaki, I. (2011). Latent variable models and factor analysis: A unified approach (Vol. 904). John Wiley & Sons.
Beavers, A. S., Lounsbury, J. W., Richards, J. K., Huck, S. W., Skolits, G. J., & Esquivel, S. L. (2019). Practical considerations for using exploratory factor analysis in educational research. Practical Assessment, Research, and Evaluation, 18(1), 6.
Boateng, D., & Awunyor-Vitor, D. (2013). Health insurance in Ghana: evaluation of policy holders’ perceptions and factors influencing policy renewal in the Volta region. International Journal for Equity in Health, 12(1), 1-10.
Bond, C. (2023). Variable Universal Life (VUL) Insurance: Explained. Forbes Advisor. Retrieved from https://www.forbes.com/advisor/life-insurance/variable-universal-life-insurance/.
Chen, R., & Wong, K. A. (2004). The determinants of financial health of Asian insurance companies. Journal of Risk and Insurance, 71(3), 469-499.
Cudiamat, A., & Siy, J. S. (2017). Determinants of profitability in life insurance companies: Evidence from the Philippines. Essays in Economics and Business Studies, 42(5), 165-175.
Cummins, J. D., & Venard, B. (2008). Insurance market dynamics: between global developments and local contingencies. Risk Management and Insurance Review, 11(2), 295-326.
Doiron, D., Jones, G., & Savage, E. (2008). Healthy, wealthy and insured? The role of self‐assessed health in the demand for private health insurance. Health Economics, 17(3), 317-334.
Fekadu, G. W. (2015). Corporate governance on financial performance of insurance industry. Corporate Ownership & Control, 13(1), 1201-1209.
Field, A. (2000). Discovering Statistics Using SPSS for Windows. Sage: London.
Gidhagen, M., & Gebert Persson, S. (2011). Determinants of digitally instigated insurance relationships. International Journal of Bank Marketing, 29(7), 517-534.
Gutierrez, A. (2022). Assessment of the Asset Management Industry in the Philippines: The Case of the Variable Unit-Linked Insurance Sector. AIM – Gov. Jose B. Fernandez, Jr. Center for Sustainable Finance. Retrieved from https://serp-p.pids.gov.ph/publication/public/view?slug=assessment-of-the-asset-management-industry-in-the-philippines-the-case-of-the-variable-unit-linked.
Haron, H., Ismail, I., & Razak, S. H. A. (2011). Factors influencing unethical behavior of insurance agents. International Journal of Business and Social Science, 2(1).
Howard, M. C. (2016). A review of exploratory factor analysis decisions and overview of current practices: What we are doing and how can we improve?. International Journal of Human-Computer Interaction, 32(1), 51-62.
Hufeld, F., Koijen, R. S., & Thimann, C. (Eds.). (2017). The economics, regulation, and systemic risk of insurance markets. Oxford University Press.
Ibañez, J. (2022). Insurance industry’s share in PHL economy likely at record in 2021. BusinessWorld Online. Retrieved from https://www.bworldonline.com/banking-finance/2022/02/10/428913/insurance-industrys-share-in-phl-economy-likely-at-record-in-2021/.
Jöreskog, K. G. (2007). Factor analysis and its extensions. Factor Analysis, 100, 47-77.
Khan, S. (2013). Attaining customer satisfaction! The role of customer value and relation base marketing a study of policy holders of Peshawar Pakistan. International Journal of Managing Value and Supply Chains (IJMVSC), 4(1), 11-24.
Kibicho, P. M. (2015). Determinants of strategy implementation success in the insurance industry: A survey of insurance companies in Kenya. International Journal of Business and Social Science, 6(4), 74-91.
Klumpes, P. J., & Schuermann, S. (2011). Corporate, product and distribution strategies in the European life insurance industry. The Geneva Papers on Risk and Insurance-Issues and Practice, 36, 50-75.
Masud, M. M., Ahsan, M. R., Ismail, N. A., & Rana, M. S. (2021). The underlying drivers of household purchase behaviour of life insurance. Society and Business Review, 16(3), 442-458.
McCoach, D. B., Gable, R. K., Madura, J. P., McCoach, D. B., Gable, R. K., & Madura, J. P. (2013). Evidence based on the internal structure of the instrument: Factor analysis. Instrument Development in the Affective Domain: School and Corporate Applications, 109-161.
McDonald, R. P. (2014). Factor analysis and related methods. Psychology Press.
Meyers, L. S., Gamst, G., & Guarino, A. J. (2016). Applied multivariate research: Design and interpretation. Sage publications.
Miranda, A., & Miranda, J. L. F. (2022). Financial Stability, Liquidity and Profitability as Indicators Toward the Viability of Non-Life Insurance Companies in the Philippines. PACHA. Revista de Estudios Contemporáneos del Sur Global, 3(8), e210116.
Ngoima, R. W. (2013). The effect of insurance agents in insurance penetration in Kenya (Doctoral dissertation, University of Nairobi,).
Obalola, M. (2008). Beyond philanthropy: corporate social responsibility in the Nigerian insurance industry. Social Responsibility Journal, 4(4), 538-548.
O'Brien, K. (2007). Factor analysis: An overview in the field of measurement. Physiotherapy Canada, 59(2), 142-155.
Okhrimenko, O., & Manaienko, I. (2019). Forming the life insurance companies’ reputation in Ukrainian realities. Insurance Markets and Companies, 10(1), 49.
Pett, M. A., Lackey, N. R., & Sullivan, J. J. (2003). Making sense of factor analysis: The use of factor analysis for instrument development in health care research. Sage.
Przybytniowski, W. P. (2017). The level of insurance knowledge of young people entering professional life–results of questionnaire surveys conducted among students of the Podkarpackie Voivodship. Jagiellonian Journal of Management, 3(2), 107-121.
Rashidi, A. (2012). Customer Relationship Management and its use in Insurance Industry. International Journal of Insurance, 1-18.
Richman, M. B. (1986). Rotation of principal components. Journal of Climatology, 6(3), 293-335.
Santis, P., Albuquerque, A., & Lizarelli, F. (2016). Do sustainable companies have a better financial performance? A study on Brazilian public companies. Journal of Cleaner Production, 133, 735-745.
Sass, D. A., & Schmitt, T. A. (2010). A comparative investigation of rotation criteria within exploratory factor analysis. Multivariate Behavioral Research, 45(1), 73-103.
Schmitt, T. A., & Sass, D. A. (2011). Rotation criteria and hypothesis testing for exploratory factor analysis: Implications for factor pattern loadings and interfactor correlations. Educational and Psychological Measurement, 71(1), 95-113.
Schoen, C., & DesRoches, C. (2000). Uninsured and unstably insured: the importance of continuous insurance coverage. Health Services Research, 35(1 Pt 2), 187.
Schreiber, J. B. (2021). Issues and recommendations for exploratory factor analysis and principal component analysis. Research in Social and Administrative Pharmacy, 17(5), 1004-1011.
Sherrick, B. J., Schnitkey, G. D., Ellinger, P. N., Barry, P. J., & Wansink, B. (2003). Farmers' preferences for crop insurance attributes. Applied Economic Perspectives and Policy, 25(2), 415-429.
Shrestha, N. (2021). Factor analysis as a tool for survey analysis. American Journal of Applied Mathematics and Statistics, 9(1), 4-11.
Siddiqui, M. H., & Sharma, T. G. (2010). Measuring the customer perceived service quality for life insurance services: An empirical investigation. International Business Research, 3(3), 171.
Stempel, J. W. (1993). Reassessing the Sophisticated Policyholder Defense in Insurance Coverage Litigation. Drake L. Rev., 42, 807.
Williams, B., Onsman, A., & Brown, T. (2010). Exploratory factor analysis: A five-step guide for novices. Australasian Journal of Paramedicine, 8, 1-13.
Yang, B. (2005). Factor analysis methods. Research in Organizations: Foundations and Methods of Inquiry, 181-199.
Yong, A. G., & Pearce, S. (2013). A beginner’s guide to factor analysis: Focusing on exploratory factor analysis. Tutorials in Quantitative Methods for Psychology, 9(2), 79-94.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Christian Paul Moyon, Marvin Cruz
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
