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Abstract
Along with the development of economy, insurance industry is regarded as an important
service industry of the tertiary industry, which plays an increasingly important role in social life.
Insurance industry is an important part of China's financial industry. Since the reform and
opening up, insurance industry has been developing rapidly in China, and its business scale has
been expanding. Insurance industry is playing an important role in the national economy. The
analysis of insurance consumption psychology can provide a more reliable basis for the
research and development and marketing of insurance products, as well as enable consumers to
locate more reasonable consumption. As a special commodity, commercial insurance has
corresponding consumption demand and psychology. It is of great significance to grasp
insurance consumption psychology and explore the influencing factors of commercial insurance
consumption psychology for effective insurance marketing. This paper analyzes the types and
influencing factors of consumer psychology of personal insurance products and puts forward
the innovative way of insurance marketing modes aiming at different types of consumer
psychology, so as to provide certain reference for effective insurance marketing.
2
6.3.1 Design a Variety of Insurance Plans to Meet the Needs of Different Consumers.............................47
6.3.2. Strengthen Publicity of the Insurance System...................................................................................48
REFERENCES................................................................................................................................................53
CHAPTER 1 INTRODUCTION
With the development of economy, insurance industry, as an important service
industry of the tertiary industry, is playing a more and more important role in social life.
As a special commodity, commercial insurance has its own consumers and corresponding
consumer demand. Grasping factors affecting consumers' purchase of life insurance in
China can make people actively develop the marketing activities of insurance products,
which is a difficult task facing the new and old insurance companies. This paper intends
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to analyze factors influencing consumer’s decision in insurance market, so as to provide
some references for effective insurance marketing. Internet is redefining the shopping
behavior of people across the globe. It has become a hotbed of advertising, shopping and
commercial activity (Rowley, 1998). People’s daily life is influenced by internet more so
as compared to past (Hsieh et al., 2013). Consumers are getting used to virtual experience
from physical experience, adapting to online purchases. According to Lee and Zhang
(2002) after e-mail usage, instant messaging and web browsing, online shopping is the
third most popular internet activity. The process a customer takes to purchase a service or
product over the internet is referred as online shopping (Jusoh & Ling, 2012) where a
consumer buys from an online store from home at his/her convenience. Online shopping
is growing in China.
Insurance premiums are growing fast. From a horizontal perspective, from 1982 to 1996, the
annual growth rate of insurance premium income was 97 percent. Over the same period,
family property insurance premium income grew at an average annual rate of 82 percent.
The average annual growth rate of agricultural insurance premium income was from 74
percent to 85 percent, and the average annual growth rate of premium income of cargo
transportation insurance was 68 percent. The annual growth rate of insurance premium
income from shipping tools and liability insurance was 63. 5 percent to 65 percent. The
enterprises' property insurance premium income grew at an average annual rate of 21
percent. The growth rate of commercial insurance premium income ranks the first among all
kinds of insurance, which is 58 percent higher than the average annual growth rate of total
commercial insurance premium income in China. From a vertical perspective, the premium
income of national life insurance was 4. 5 percent in 1980 and shows 600 million yuan
increased to 1452.8 billion yuan in 2010, with an increase of 3,158 times and an average
annual growth rate of 32 percent, which is much higher than the growth rate of GDP in the
same period and one of the fastest growing industries in China. From the perspective of
insurance depth, the proportion of national life insurance premium income in GDP increased
rapidly, which was only 0.1 percent in 1980. That's up to 2.2 percent in 2010 (Chen
Xiangyun, 2001: 58-61). These data fully show that as an important field of modern service
4
industry, the insurance industry is developing rapidly in China and has begun to take shape.
China's insurance companies can be divided into the following three categories
according to the nature of their business: life insurance companies, property insurance
companies, accident insurance companies and reinsurance companies. Under the supervision
and development of the China Insurance Regulatory Commission, as of the end of 2018,
there were 500 insurance companies nationwide, including 189 life insurance companies,
103 property insurance companies, and 8 reinsurance companies. In addition to these major
companies, there are nine insurance (group) companies, nine insurance wealth management
companies and 156 foreign insurance company agencies. Based on the market share in 2018,
the table lists shows the top five insurance companies in China and foreign life insurance,
property insurance and accident insurance. According to the report, the market share of life
insurance, property insurance and accident insurance of Chinese insurance companies
exceeds 74%. This high concentration not only indicates that Chinese companies play an
important role in the Chinese insurance market, but may also mean that some foreign
companies have opportunities for expansion in China.
5
Unit: (premiums RMB in billion)
www.circ.gov.cn.
Consumer psychology believes that the direct cause of consumer behavior is its
psychological motivation, which is the internal active force of the human body, and can
drive and urge consumers to conduct consumption activities in order to achieve certain
goals. Insurance activity also needs to suffer certain control likewise. The following part
makes the following analysis on the factors influencing consumer’s behavior in the
process of purchasing insurance, aiming at demonstrating different types of factors. It
puts forward the way to innovate the marketing model of insurance industry, so as to
provide some references for effective insurance marketing.
This study applies structural equation model and survey design to test the model which is
hypothesized. In the context of the rapid development of the Internet, this research aims to
study the factors influencing consumers' willingness to purchase life insurance from the
Internet platform and explore the factors influencing consumers' decision-making on
consumption, which have a significant impact on consumers' willingness to purchase
insurance. In-depth questionnaire survey was conducted to fully understand the factors
influencing consumers' willingness to purchase insurance products. Consumers' age,
gender, marital status, educational background, income level and other basic
characteristics, this plays a very important role in explaining consumers’ behavioral
decision-making.
8
1.3.2 Research Framework
The study gives more ideas and insight to illustrate real nature of the problem being
examined. The study applies descriptive design which is concerned with illustrating a
particular situation and it encourages future explanation. Correlation analysis which is
used in this study is used to explain association between independent and dependent
variables.
9
Figure 2: Research design Chart
In the field of insurance theory, scholars from all over the world have defined
insurance from different perspectives, and the more generally applicable definition is:
"insurance is to realize the compensation for economic losses of a few members caused by
the dangerous accident through combining numerous units or individuals with the same
kind of danger and reasonably calculating the contribution. Commercial insurance regards
insurance as the object of management, and insurance obtained a kind of commodity form
here. It has the function that compensates economic loss perhaps, or can offer economic
safeguard, thus satisfying the need that people transfer dangerous loss (Bickley, 1967: 175).
10
Insurance is a kind of security commodity with pure and independent form. Its body
compound is insurance policy namely. The consumer of insurance can be natural person,
and also can be legal person. The relation between insurance company and client is
commodity trade, and the premise of insurance consumption is to pay cost (insurance
premium). Insurance consumption must have a certain ability to pay.
2.2 Research on Consumer’s Psychology abroad
In the field of insurance theory, scholars from all over the world have defined
insurance from different perspectives, and the more generally applicable definition is:
"insurance is to realize the compensation for economic losses of a few members caused by
the dangerous accident by combining numerous units or individuals with the same kind of
danger and reasonably calculating the contribution. Commercial insurance regards
insurance as the object of management, and insurance obtained commodity form here. It
has the function that compensates economic loss, or perhaps can offer economic safeguard,
so as to satisfy the need that people transfer dangerous loss.
Internet insurance in foreign countries started earlier and developed at a higher level.
Many scholars have done a lot of research on it, which had promoted the development of
Internet insurance. But there are also many shortcomings in these studies. Foreign studies
on Internet insurance mainly focus on the macro-level, so as to explore the factors affecting
the development of Internet insurance from the perspective of demand, and most of them
focus on the analysis of the factors affecting the development of Internet insurance industry
from the perspective of insurance enterprises themselves and the whole industry's Internet
marketing platform from the perspective of consumers. Few scholars have discussed the
factors affecting the development of Internet insurance. On the other hand, foreign studies
on Internet insurance mainly focus on automobile insurance and life insurance. However,
the definition of life insurance in China is different from that in other countries. Life
insurance in China covers a wider range, including health insurance and accident insurance.
Therefore, many foreign research conclusions on life insurance are not very accurate in
China.
Chinese scholars have also made a lot of research on China's Internet insurance, and
11
have achieved remarkable results. However, most of these studies are from the perspective
of insurance companies and cater to consumers' needs by changing the enterprises
themselves. Few scholars study consumers, intending to change the demand situation of the
whole insurance market by influencing consumers. Most of the studies on consumers'
willingness are more focused on the factors influencing consumers' willingness to consume
Internet insurance from a small perspective unilaterally. It is impossible to fully understand
consumers and put forward more comprehensive suggestions for the development of
Internet insurance. In view of the lack of empirical analysis of Internet life insurance
purchase intention in China, this paper will strive for breakthroughs and innovations in
view of the above problems.
2.3 Research on Consumer’s Psychology in China
Existence of danger is the condition that insurance establishes. Therefore, the premise
of insurance consumption is that consumers have potential dangers. Insurance consumption
must be the common behavior of most people. Insurance means economic loss
compensation for part or all of the average allocation of insurance expenses according to
the law of large numbers, uncertainty risk loss rate, probability theory and other
mathematical. Insurance consumption process is also the mutual aid process of most
people, so there must be a majority of people to participate. The outcome of insurance
consumption is uncertain. Insurance is to compensate economic loss afterwards, and the
result that insurance contract fulfils is built below the condition that the contract sets, the
event may happen, or also may not happen. Therefore, when consumers make insurance
consumption decisions, that is, when they buy insurance policies, they cannot clearly know
their consumption results. Insurance consumption has individual character. What insurance
contract protects is the insurant that suffers a loss himself or herself, and individual
temperament and behaviors will affect the possibility that insurance mark produces a loss
and severity greatly. Accordingly, the underwriter decides whether to accept according to
the condition of different policy-holder and the condition that whether to accept or accepts
its purchase on the conditional grounds.
Through the analogy of various Internet insurance e-commerce platforms, combined
12
with the characteristics of each platform's own mode, Sun Pan Yao (2012) gives
corresponding suggestions to improve service level. He believes that the main functions of
the electronic commerce platform set up by insurance companies are introducing the
business situation of enterprises, publicizing insurance products and establishing a good
corporate image. While the third-party electronic commerce platform set up by other
companies for insurance companies should focus on product comparison and inquiry, and
provide various value-added services on this basis (Sun Pan Yao, 2012). The perceived
value by a consumer of an online insurance service demonstrates effectiveness only if it
showcases it convenience as opposed to the physical insurance services. This study in this
case has demonstrated that added value is critical aspect in the determination of the
consumer behavior.
Luo Juan (2007) studied and analyzed the current situation of the development of
Internet insurance products in China. He believes that the current Internet insurance
products in China are relatively simple, and there are few insurance products that can
achieve full e-commerce. At present, there are few insurance products that can be operated
on the Internet, mainly including: simple personal insurance, liability credit guarantee
insurance, investment and financial insurance, and all insurance companies. The products
operated by the company on the Internet platform have serious homogeneity problems,
which cannot meet the personalized insurance needs of consumers. In order to promote the
development of Internet insurance, insurance companies must consider the individual needs
of consumers and provide multiple choices for consumers by improving product design to
create unique advantages of Internet insurance (Luo Juan, 2007). The findings of these
study showcases the dynamics of online insurance and the importance of understanding the
customer seeking such services. It further creates a need to further look into insurance
service online practicability as the number of internet users seeking such service in China
intensify. It lead to the question, are the insurance companies ready for this market?
Liu Yanfei (1997) made an in-depth study on the terms design of Internet insurance
products. He believes that the contract terms of Internet insurance products need to be
popularly designed. Moreover, the popularity requirements of terms design of Internet
13
insurance products are more stringent than those of insurance products under the traditional
way of insurance sales. He also creates a feedback modification system through model
design. It provides an important way of thinking for the continuous improvement of the
popularization of Internet insurance product terms (Liu Yanfei, 1997). This study does
showcase the dynamics of online insurance and the need of the insurance companies to best
understand the consumer if there to design a service that will become competitive.
As Yingmin (1995) puts forward the corresponding development strategies by
studying the problems and opportunities faced by the development of Internet insurance in
China. She believes that Internet insurance should achieve a win-win situation with
traditional insurance. The insurance industry should constantly improve the external
environment, establish the brand image of Internet insurance, constantly improve the
service quality of Internet insurance, and win more consumers' attention and recognition.
The insurance industry should continuously improve the construction of Internet insurance
marketing platform and design and develop innovative insurance products suitable for the
network (Yingmin (1995). The study was in line with the findings of Liu Yanfei and was
specific to the China market showcasing that China online insurance service technical
aspects were still a hindrance in such service provision.
Hou Zhenxing (2008) have explored the factors affecting consumers' use of electronic
payment platform. They believe that convenience, charging standards and costs are the
main factors affecting consumers' decision on whether to use electronic payment platform.
Insurance companies should also pay attention to the above three factors when planning
Internet insurance business to improve consumers' willingness to consume Internet
insurance (Hou Zhenxing, 2008. The study was narrowed to the payments platform and
leaving a gap on other factors that an online insurance customer may face when deciding on
taking up such a cover.
Xu Yingnan (2012) takes Guangzhou consumers as the research object. From the
perspective of consumer Internet insurance preference, this paper analyzes the factors
affecting consumers' willingness to purchase Internet insurance. He believes that the
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network is usable and consumers are influenced by factors, such as the relative reluctance
of change, the trustworthiness of insurance companies, the cost of Internet use, the security,
convenience and ease of use of Internet platforms, which have a significant impact on
consumers' willingness to purchase Internet insurance and make comparative analysis of the
Internet. The difference between insurance and traditional insurance varies (Xu Yingnan,
2012). The study demonstrated that the users of the internet despite technology growth have
pessimistic on the use of the internet to take up an insurance cover. The factors discussed in
the study were more on the security issues and leaving the question of whether these
perception has changes since the online insurance service provision in China has grown.
Xu Shuxiang (2013) takes China Life as an example, using factor analysis and
structural equation model to explore the influencing factors of consumers' Internet life
insurance consumption intention, and finding that the convenience of using insurance
companies' websites, consumers' personal attitudes and risk perception level have a
significant impact on their Internet insurance consumption intention (Xu Shuxiang, 2013).
The study was carried out empirically and alighned with theoretical studies such as the
study by Xu Yingnan (2012) that online insurance consumers do not feel the security of
their finances in secure using such platforms. It demonstrate that consumers have had
concerns mainly about the security of their premiums.
Based on the investigation of consumer insurance demand and its influencing factors,
through the analysis of the influencing factors of consumer's willingness to consume
Internet insurance, Zhang Jinfeng (2006) puts forward feasible suggestions for insurance
companies to develop Internet insurance business and regulators to implement Internet
insurance supervision. From the perspective of consumer psychology, Zhang Jinfeng (2006)
studied the relevant factors affecting consumers' purchase of life insurance in China. They
believe that consumers' consumption decisions are significantly affected by their
satisfaction with life insurance services (Zhang Jinfeng, 2006). The study demonstrate that
the online insurance consumers have the will to take up life online insurance cover but can
only do so if their saving are secured by regulators.
2.5 Investment and Consumers Preferences impact on customer intention to
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purchase online life insurance
Experience is an aspect that accumulates over a period of time. The greater the
experience an individual has with a product or a similar or related product the higher the
level of familiarity. Besides the perceived quality of the product has a likeliness of
experience change over a period of time. For example with novelty and learnability may
drive product prolonged use (Hassenzahl, 2004). The expectation thereon is that varying
levels of experience may contribute to consumer attitude changes (Hovland et al., 1957).
The experience that the consumers has when making online transaction related to
purchase of insurance plays a great part in influencing the decision of the consumers to
buy life insurance. Trust is often build from the success past investment in similar or
related transactions (Rajendran & Balamurugan, 2017). The China online investment has
grown but there is still little feedback on how such investors are using their experience in
such investment to purchase online life insurance.
2.6 Perceived value of the Life Insurance Cover
For most families in China taking up a life insurance policy is a luxury and not given
priority. The product is related to middle class and the rich. Which means that in the
country the potential consumer consider the value it will add to their daily lives. It is
common for the insurance companies to showcase the value of the product by
demonstrating it will play a big role when the sole bread winner dies. The perceived
value that an individual looks for in life insurance generally direct impacts on the value
they will see in the product when sold online (Bickley, 1967). It means that there is
limited study on how individuals in China feel about life insurance covers which directly
affect their perceived value of online life insurance.
2.7 Social Demographics influence on China consumer Online Life Insurance
Purchase intentions
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insurance cover they directly affect the consumer decision to take up an online insurance
cover.
Summary
The above literature showcases that consumers have a negative perception about
online insurance in general and concerns are mostly on the design of the cover and the
security. In matters life insurance, consumer have the will to purchase such service but
require that the regulators secure their premiums. The present study will investigate
empirically the present perception that consumers have about online insurance life
insurance in consideration of non-life insurance acceptance in China and growth.
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CHAPTER 3 RESEARCH DESIGN
3.1 Research model
This paper intends to study the influencing factors of consumers' purchase intention of
insurance from Internet platform under the guidance of relevant theories, and to find out
which factors will have a significant impact on consumers' purchase intention of Internet
insurance. Based on the theoretical analysis of the influence of psychology, demand,
environment and behavior on consumers' decision-making in the previous chapter, the
theoretical model of influencing factors of consumers' purchase intention of Internet
insurance is established, as shown in the following Figure.
H4a
Socio-demographic
H4b
Consumer Preference
In regard to the previous research models, the model of research that has been
developed for the current research indicates the interactive association of the independent
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variables which comprise; knowledge of life insurance online, trust of life insurance online
and buying preference online and their impacts on dependent variable; willingness to
purchase online life insurance.
3.2 Variables Selection
This chapter analyses the economic, behavioral and psychological factors that affect the
Internet insurance consumption intention. What variables are specifically selected to express
these factors? scholar refer to relevant literature and decide to select consumers' network
proficiency, reliability of life insurance products, knowledge of life insurance online, buying
preference online, trust of life insurance online, privacy, claim, simplicity of operation
process , convenience of purchase of Internet life insurance, product variety and matchiness.
Reference sources for each variable are given here. A brief description is shown in Table 1.
RISK PERCEPTION
privacy 1= not important,…7= very important
claim 1= not important,…7= very important
variety 1= not important,…,7= very important
matchiness 1= not important,…7= very important
convenience 1= not important,…7= very important
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easiness 1= not important,…7= very important
Table: Description of Variables for Probit Model for 0 Life Insurance in China.
Age, gender, marital status, educational plol, income level and other basic
characteristics of consumers play a very important role in explaining consumers' behavior
and decision-making. Therefore, this paper willing to explore the psychological factors
influencing consumers' willingness to buy Internet insurance.
H1. This paper assumes that the level of consumer’s awareness and knowledge will
have a significant impact on their willingness to purchase insurance online
Internet Development Research Report shows that the more frequently Internet users use the
Internet and the longer they will spend on the Internet every day. The more familiar and
loving they are with the Internet, and the more likely they are to buy goods from the
Internet. Internet life insurance also has the nature of general commodities, so if insurance
companies increase publicity efforts, consumers who like the Internet will be more likely to
buy Internet life insurance products from the Internet. The more knowledge about buying
insurance online consumers has, the more they will to buy insurance online.
H2. This paper assumes that the level of consumer trust of life insurance has a
significant positive correlation with consumers ‘willingness to purchase Internet insurance.
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Generally speaking, it is really important to have consumers’ trust. It is easier to
understand things about internet life insurance and accept the Internet sales model of life
insurance. If buying insurance online have no risk, consumers’ will not have any problems
with buying it online.
H3. Therefore, this paper assumes that compared with purchasing insurance offline,
people prefer to buy insurance online.
When you buy insurance online, you can take your time deciding which product suits
your needs, without feeling like you must decide on the spot.
Purchasing insurance online only takes the minimal effort of filling out personal details
into forms on the website. It save a lot of time when all you need to do is log onto computer
at home. Also the price of online insurance plans are typically cheaper than buying in
person. For this reasons scholar believes that more people willing to buy insurance online.
H4a. This paper assumes that factors above (privacy, claim, variety, matchiness,
convenience, easiness) are not significantly deferent from each other.
H4b. This paper assumes that whether the consumers can get the claim is the most
important factor influencing people’s choice of buying online insurance.
The decision of taking up a life insurance policy constitute more than just events
happening in an individual life’s and the advice helpfulness. Buyers cite numerous
reasons for not making a purchase of insurance, including complexity, benefits and length
of the process of application. Meaning that there exist a clear disconnect between views
of prospective buyers on short-run financial goals and priorities and the financial long-
run benefits associated with the purchase of life insurance. Therefore most potential
buyers do not consider their financial priorities before deciding to purchase insurance
such as bills and family financial matters. At the same life insurance is changing in the
21
importance it holds to an individual. Life insurance is becoming more and more of a
financial instrument that is utilized to offer support to the survivors, where it pays estate
obligations that arise after death, making adjustments of business, accumulating
retirement funds as well as emergency fund. This aspects massively influence the
importance a consumer can hold in regards to life insurance. Since the main of life
insurance is to offer protection to the entire family and enhance the health of the family.
H5. This paper assumes that consumer hold with high importance the product value
when deciding to purchase online insurance.
H6: The paper assumes that consumer preference to make online investments affects
their decision to purchase online insurance.
H7: The paper assumes that consumer social demographics influence their decision to
22
purchase online life insurance.
H8: The paper assumes that the preference of a consumer affects their decision to
purchase online life insurance
Scholar believe this eight factors are the factors which are usually considered by
people when talking about purchasing insurance online. The main gain of H4a is to find out
what is the most important factor influencing people’s choice of buying insurance online.
Insurance claim is basically how much money the person will get from insurance
company, so scholar believes that iH4b insurance claim will be the most important factor
above others.
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objects.
To begin to understand the marketing process, one must first start with the most
basic concept which is human needs. As defined by the marketing literature, needs are
basic and can be physical, social and individual. Human needs and wants are influenced
by an individual’s culture and personality. Human needs and wants then enter into a
relationship with the marketplace in the form of demands which are the human wants
that are projected into the marketplace and backed by buying power. Marketing offers are
a combination of products, services, information or experiences that are offered to
consumers in order to satisfy needs or wants.
The first step in the marketing process is to analyze and understand the market,
so as to better understand the needs and aspirations of consumers and to take
advantage of market opportunities. This constitutes a market segmentation that
requires people to divide a market into different consumer groups that have different
needs, thus having different needs for different products. The second step is to design
24
a marketing strategy that meets organizational goals, capabilities, and consumer drive.
The third step is to develop a marketing plan that meets the target consumer group.
The fourth step is to establish and maintain relationships with consumers, so as to
help ensure that their needs are met. Finally, it must make a profit from consumer
satisfaction.
The first step in the marketing process is to analyze and understand the market in
order to better understand the needs and aspirations of consumers and take advantage
of market opportunities. This constitutes market segmentation, which requires people
to divide a market into different consumer groups, these consumers have different
needs and needs, so different products have different needs.The second step is to
design marketing strategies that are in line with organizational goals, capabilities and
consumers. The third step is to develop a marketing plan to meet the target consumer
groups. The fourth step is to establish and maintain relationships with consumers to
help ensure that their needs are met. Finally, it must profit from consumer
satisfaction.
People refer to anyone who comes into contact with consumers. People are
important because any contact can have a negative or positive impact on consumer
satisfaction. Therefore, it is important to train employees properly, motivate them, and
make them representative employees that companies want to have. The study also found
that it is important for people to choose to represent the specific characteristics of a
company, such as similarity with target audiences, occupational status, organizational
affiliation, incentives and social background, all play a role in persuading target
audiences.
Figure: An Overview of Top Five Chinese and Foreign Life, and Property and
Casualty Companies in China in 2018
26
Figure: Premium Income Growth for China, 2009-2018
27
Figure: Life Insurance Density and Penetration for China, 2011-2018
Notes:
Insurance density and insurance penetration ratios are two important indicators to
evaluate the current state and potential growth of insurance market. The higher the ratios,
the higher the level of insurance market development.
Sources:
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3.4 Empirical Study and Research Methodology
In the context of the rapid development of the Internet, this paper aims to study the
factors influencing consumers' willingness to purchase life insurance from the Internet
platform under the guidance of relevant theories, and explore the factors influencing
consumers' decision-making on consumption, which have a significant impact on
consumers' willingness to purchase insurance. Based on the theoretical analysis of the
influence of psychology on consumers' decision making in the previous chapter, the
theoretical model of influencing factors of consumers' willingness to purchase insurance is
established.
The research object of this paper is ordinary consumers, specifically refers to those
consumers who have the real needs or potential needs of insurance. According to China
Internet network information center statistics, the current online users are younger, and 80%
of users aged between 20 to 45 years old. Therefore, the questionnaire survey of respondents
mainly chooses consumers aged between 20 to 45 years old. On the other hand, in order to
ensure that the consumer Internet insurance consumption will research the feasibility and the
validity of the results of the survey of project implementation. In-depth questionnaire survey
was conducted to fully understand the factors influencing consumers' willingness to
purchase insurance products. Consumers' age, gender, marital status, educational
background, income level and other basic characteristics, this plays a very important role in
explaining consumers’ behavioral decision-making. Therefore, this questionnaire also takes
this aspect into consideration when studying the influencing factors of consumers' Internet
personal insurance purchase intention.
Based on Internet insurance and related literature review on the research of the
consumers’ psychological characteristics and consumers’ purchase behaviors, consumer
29
behavior theory model, the theoretical model of consumer demand, environmental impact
theory and related insurance consumption’s survey data, combined with the characteristics
of insurance, the paper selected a number of latent variables, proposing the corresponding
research hypothesis, so as to explore the psychological factors of influence consumers to
buy insurance products.
The questionnaire of this study is on the basis of a large number of related literature in
China and abroad, the use of insurance, economics, psychology, behavior finance and other
related knowledge, and then draw lessons from the life insurance demand, insurance
purchase intention, shopping intention factors and other related research results, combined
with previous information collection. This paper chooses average consumer as the research
object, and study references of Chinese and foreign scholars who have used the same or
similar questionnaire, finally design this questionnaire.
This questionnaire mainly includes three parts: the title, the introduction of the
questionnaire and the survey questions. The subject of the questionnaire is a study on
consumers' willingness to purchase Internet insurance. The introduction of the questionnaire
mainly introduces the situation of the person who issued the questionnaire and the purpose
of the questionnaire, and promises to the interviewees that the information they provide will
be kept strictly confidential to eliminate the doubts of the respondents to fill in the
questionnaire. At the same time, the introduction of the questionnaire also briefly introduces
the significance of modern insurance and its differences from traditional insurance, so as to
improve the effectiveness of respondents to fill in the questionnaire. The questionnaire
includes many aspects of customer psychological characteristics of the project.
In this chapter, the results of the study were presented. Specifically, this chapter presented
30
the results on demographic characteristics of the respondents, diagnostic results, the
descriptive analysis results as well as the inferential statistics. The study also presented
the reliability and validity results.
4.2 Response Rate
The number of questionnaires distributed to respondents was 195. Out of the 195
questionnaires, 140 were correctly and fully completed and returned. This presented a
response rate of 72% which according to Kothari (2013) is appropriate for analysis. Table
4.1 presents the response rate results.
Non-returned 37 12.29
Descriptive statistics are used to provide an overview about the sample, describing
variables numerically by calculating mean and standard deviations (Saunders et al.,
2012). A questionnaire will be ineffective if it is not designed in a manner easily
understood by both the interviewer and the interviewee.
In this paper, questionnaire survey was conducted by issuing questionnaires. From
November 2018, a total of 301 paper questionnaires were collected. 37 of them were invalid,
a total of 264 questionnaires were valid with an effective response rate of 87.70%.
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Table 4.2 : Socio-demographic Characteristics of Sample Respondents for Chinese
frequency %
Male 142 53.79
Sex
Female 122 46.21
20 or below 15 5.68
21-25 70 26.52
26-30 79 29.92
31-35 70 26.52
AGE
36-40 21 7.95
41-45 7 2.65
46-50 1 0.38
over 50 1 0.38
below ¥5,000 31 11.74
¥ 5,000 – ¥10,000 90 34.09
¥ 10,000 – ¥30,000 77 29.17
FAMILY INCOME
¥ 30,000 – ¥50,000 37 14.02
¥ 50,000 –¥100,000 20 7.58
above ¥100,000 9 3.41
Primary or below 31 11.74
Secondary 85 32.20
EDUCATION LEVEL
college/ University 136 51.52
Postgraduate 12 4.55
Single 75 28.41
Domestic partnership 90 34.09
MARITAL STATUS
Married 90 34.09
Divorce / Separated / Widow 9 3.41
Blue Collar 20 7.58
White Collar 150 56.82
JOB Professional 62 23.48
Student 28 10.61
Others 4 1.52
Total 264 100.00
Among the 264 samples, there were 146 male samples, accounting for 53.79%, and
122 female samples, accounting for 46.2%. There were only 15 consumers who were
32
under 25 ages accounted for 5.68%.
The statistical results of the questionnaire show that the results of the surveyed
population are mainly at the undergraduate level. The author thinks that the reasons for
this phenomenon may be: on the one hand, the respondents are mainly white-collar
workers, and these people generally have a high degree. On the other hand, respondents
may choose to fill in higher education for psychological reasons. The income level of the
surveyed people is mainly between 5000 Yuan and 1000 Yuan. There were 30 people with
incomes below 5000 yuan, accounting for 11.74% of the total. The author thinks that this
phenomenon is mainly because the respondents are mainly people working in
Guangzhou, and the average income level in Guangzhou is relatively high. On the other
hand, it may be because some people with less income are unwilling to fill in less than
3000 yuan due to psychological effects.
According to the graph of the relationship between age and consumption intention of
respondents and the graph of income level and consumption intention of respondents,
consumers aged between 20 and 35 have a high degree of acceptance of Internet life
insurance, while consumers aged over 40 have a low degree of acceptance of Internet life
insurance. The proportion of people with higher income level who are willing to buy
Internet life insurance is relatively high, but the proportion first increases and then
decreases with the increase of income.
The term reliability generally refers to the consistency of a measure. The construct being
measured using a questionnaire, however, is expected to vary from one respondent to
another. The study used the Chronbach’s coefficient alpha to estimate the consistency of
Likert-items included in the questionnaires, and table 4.2 shows the results. A high
coefficient indicates that the items are consistently measuring the same underlying
construct. George and Mallery (2003) provide the following rules of thumb: “_ > 0.9 –
Excellent, _ > 0.8 – Good, _ > 0.7 – Acceptable, _ > 0.6 – Questionable, _ > 0.5 – Poor,
33
and _ < 0.5 – Unacceptable”. As such, having yielded all coefficients greater than 0.8 and
greater than 0.9 for some sections, the questionnaires were accepted as consistent and
reliable for the study.
Cronbach's Number of
Variables Alpha Items Conclusion
The most common reliability coefficient is Cronbach’s alpha which estimates internal
consistency by determining how all items on a test relate to all other items and to the total
test-internal coherence of data. The reliability is expressed as a coefficient between 0 and
1.00. The higher the coefficient, the more reliable is the test. The findings on Table above
indicated that all variables depicted a value of Cronbach's Alpha above value of 0.7 thus
the study variables were reliable. This represented high level of reliability.
Validity depicts exact and precise results obtained from the data collected. Validity
analysis enhances a proper and correct conclusion on the sample used in the analysis to
represent the entire population.
The Kaiser-Meyer-Olkin (KMO) measures the sampling adequacy (which determines if
the responses given with the sample are adequate or not) which should be more than 0.5
for a satisfactory factor analysis to proceed. Kaiser (1974) recommend 0.5 (value for
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KMO) as minimum (barely accepted), values between 0.7-0.8 acceptable, and values
above 0.9 are superb. Bartlett's test of sphericity tests the hypothesis that the correlation
matrix is an identity matrix, which would indicate that the variables are unrelated and
therefore unsuitable for structure detection. Small values (less than 0.05) of the
significance level indicate that a factor analysis may be useful with the data.
Approx.(Chi- Sig
Variables KMO square) df
The KMO for all the variables are above the threshold of 0.5 and the KMO was
significant at p=0.00 indicating that all the variables are useful in the analysis.
4.4 Inferential Statistics
36
4.5 Regression Analysis
Online Life Insurance
Variable Relationship
Knowledge on online insurance 1.000
Psychological aspect 0.611**
0.000
Situational aspect 0.449**
0.004
Risk perceived --0.186**
0.000
Investment preference 0.435**
0.005
Product attributes 0.534**
0.000
Socio- demographic 0.439**
0.000
Consumer preference 0.348**
0.000
Indicator Coefficient
R 0.671
R Square 0.451
Adjusted R Squared 0.388
Std. Error of the Estimate 1.8597
In statistics significance testing the p-value indicates the level of relation of the
independent variable to the dependent variable. If the significance number found is less
than the critical value also known as the probability value (p) which is statistically set at
0.05, then the conclusion would be that the model is significant in explaining the
relationship; else the model would be regarded as non-significant.
Table below provides the results on the analysis of the variance (ANOVA). The
significance value is .000 which is less than 0.05, thus the model is statistically
significant in predicting how factors affecting consumers affect the purchase of online
life insurance. Further, the results imply that the independent variables are good
predictors of purchase of online life insurance. This was supported by an F statistic of
7.181 and the reported p value (0.000) which was less than the conventional probability
of 0.05significance level.
Sum of Mean
Model Squares df Square F Sig.
Regression 99.332 4 24.833 7.181 .000
Residual 121.043 26 3.458
Total 220.375 30
a. Dependent Variable : Financial Performance
Unstandardized
Coefficients t Sig.
Std.
B Error
(Constant) 0.334 3.386 4.234 0.000
Knowledge on online
insurance 0.544 0.181 3.053 0.004
Psychological aspect 0.322 0.100 2.216 0.005
Situational aspect 0.255 0.111 0.229 0.003
Risk perceived by the
consumers -0.060 0.032 1.875 0.005
Investment preference 0.537 0.055 2.987 0.000
Product attributes 0.310 0.073 3.860 0.000
Socio-demographic 0.476 0.055 8.335 0.000
Consumer preference 0.345 0.056 5.673 0.003
a. Dependent Variable: Purchase of online life insurance
39
CHAPTER 5 CONCLUSION AND RECOMENDATIONS
6.1. Scope for Further Research
The factors influencing consumers’ buying behavior framework can be useful to both
practitioners and academics. It could help online marketers and e-Commerce firms to
identify issues requiring special attention to the factors impacting their online business or
evaluating their existing online venture. For academic researchers this classification
could be a basis for the formulation of new hypotheses and research questions leading to
better mapping of the online consumer’s behavior. This research can be used by online
retailers to shape their marketing strategy.
The framework could also be the basis of further research focused on better
understanding of the nature and weight of the factors influencing buying behavior, either
in isolation or in interaction with each other and in different e-retailing markets.
The young shoppers are mainly college students who are technologically savvy and don’t
mind shopping online. This research doesn’t include people who are aware about online
retailing but not participated in online shopping.
Finally, these factors must be regarded as a dynamic and evolving subject rather than a
static one. The developments in the virtual marketplace, changing customer techno-
graphics and technological innovation will present e-marketers with new tools and
methods for enhancing their customers’ online experience. In that respect this study
depicts the current picture of the research done thus far, a good starting point for further
research in the direction of developing a comprehensive theory on the online buying
behaviour. The same research can be repeated across different cities in China to
understand the differences and similarities in online shopper buying behaviour.
6.2. Conclusion
From the findings, the study found that knowledge on online insurance, psychological
aspect, situational aspect, investment preference, product attributes, socio demographic,
perceived risk and consumer preference had effect on purchase of online life insurance.
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The study established that there was strong relationship between purchase of online
products and knowledge on online insurance, psychological aspect, situational aspect,
investment preference, product attributes, socio demographic, perceived risk and
consumer preference. The study revealed that a unit increase in knowledge on online
insurance would lead to increase in purchase of online life insurance; this is an indication
that there was positive association between knowledge on online insurance and purchase
of online life insurance, an increase in knowledge on online insurance learning would
lead to increase in purchase of online life insurance, which shows that there was positive
relationship between psychological aspect and purchase of online life insurance and a
unit increase in product attributes would lead to increase purchase of online life
insurance; this is an indication that there was a positive relationship between online
purchase of online life insurance and consumer preference. Knowledge on online
insurance, psychological aspect, situational aspect, risk perceived, investment
preferences, product attributes, socio-demographic and consumer preference,
significantly influence purchase of online life insurance.
For instance, as demonstrated in the present research insurance consumption has a
variety of psychological factors, and the psychology of insurance consumption is affected by
many factors. Consumer psychology has an important influence on the development of
insurance industry. Under the situation of fierce competition in the market economy, in order
to expand the insurance market and improve the insurance consumption, insurance
companies should undoubtedly grasp the insurance consumption psychology as far as
possible, and actively guide the formation of the insurance consumption psychology
conducive to the development of the insurance industry through external factors.
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marketing strategy in a bid to provide scientific theoretical basis, thus achieving the ultimate
goal of marketing.
6.3. Recommendations
People should strengthen publicity of the insurance system. The origin of the insurance
system has a history of several hundred years, but in China, the publicity of the insurance
system is still very weak. The early stage of the development of China's insurance industry
shows a brutal marketing model, so that most consumers will instinctively refuse the
insurance industry and insurance products. At present, the most commonly used publicity
means of domestic insurance companies is advertising, but because insurance product is a
kind of special commodity, this particularity determines that compared with other
commodities, they have obvious characteristics. Accordingly, when designing insurance
product advertisement, people must adequately hold the characteristic that insurance
products have (Wu Hongzhen, 2015: 87).
First of all, insurance products are products that most consumers would not consider
buying voluntarily. Insurance products are largely linked to words that consumers dislike,
such as death and disability. Therefore, advertisements of insurance products should try to
avoid directly transmitting such negative information to consumers and should not be
expected to promote their products by increasing consumers' fear. Secondly, the insurance
system is mutually supportive. Insurance product is a kind of product that numerous people
assist to provide mutual aids. Therefore, the insurance advertisement should be closer to the
public service advertisement to some extent in the publicity. What the advertisement can
promote in the design is the concept of mutual assistance. "Note to every policyholder:
43
behind you is a $6.1 billion strong backer. "This is a very famous slogan of a western
insurance company. The plain language shows no flowery rhetoric, but reveals the
characteristics of insurance products’ core concept, namely mutual aid (Peressini, 1997: 137-
159). Finally, insurance company advertising should fully grasp the characteristics of
insurance products, and establish psychological needs with the audience. Abstruse
advertisement can let consumer feel confused. These are the psychological demands of
consumers that have not been fully taken into account. They do not resonate with and trust
consumers, thus resulting in psychological distance.
The consumers that seek safe disaster prevention psychology can know risk actively,
and seek the method that reduces risk actively, thus easily accepting this kind of advanced
risk management method of insurance. They have stronger protect consciousness. They are
very clear about the severity of losses caused by disasters and accidents and can deeply
understand the nature, and functions of insurance. The insured motive of this kind of
consumer is good, and their consumptive psychology is mature, consumptive decision is
rational and wise, and that person is insurance company’s rare loyal client, and is also the
foundation that insurance company business can get stable development. The insurance
company deserves to treat well the guest. But this kind of consumers in insurance industry is
still few in our country, and insurance company should recruit more the foreknowledge
person that spares no effort to bring insurance consumption to the company, so as to raise
professional service level and protect customers’ consumption enthusiasm.
Many customers will be influenced by the brand when they choose products, and there
are only two situations for consumers to have a deep-rooted influence on a brand. Good
advertising effect: in marketing, if it does not conform to the first situation, it is necessary to
start from the aspect of advertising, stimulate the desire of consumers through advertising
effect, and promote consumers to have consumption behaviors, so as to achieve the most
marketing. The end goal provides adequate assurance. In order to become a successful
marketing, it is necessary to select the customer group specifically, fully grasp the consumer
44
psychological characteristics of customers, and accurately locate the customer group. Only
in this way can the economic benefits of marketing be maximized. For example, the diapers
for infants and young children are characterized by dry and comfortable features, which can
protect the skin of infants and young children. This targeted design highlights the advantages
of the product, which can make more consumers choose products, so as to achieve the
important purpose of marketing. Marketing combined with the feature of consumer
psychology need the insurance company do things from the perspective of the customer’s
supreme benefits. The customers need products, and the insurance company needs to
provide customer service for customers to create a feeling of home, so that the customer can
consume in a more relaxed and comfortable environment, thereby fully meeting the needs of
customers, as well as providing customers with the humanized service. For example, with
the development of computer technology and network technology, to further improve the
people's living standard plays a very important role. More and more people choose online
shopping, and door-to-door delivery service will fully illustrate the consumption to take
customer as the center, and to meet the needs of customers. Only in this way can the
realization of the ultimate goal for marketing lay a solid foundation.
There are a large number of people who hold fluke psychology in real life. Specifically,
when it comes to insurance consumption, because the uncertainty of result of insurance
consumption, the fluke and lucky psychology of a few people is strengthened from a certain
level. The insurance consumer that holds fluke and luck psychology will buy insurance, but
commonly show the vacillation between disaster prevention psychology and fluke
psychology. Although this kind of people also hold the purpose of disaster prevention, they
have no lasting disaster prevention psychology. If there is no disaster accident in the time
they expect, their disaster prevention psychology will gradually fade away, or even
disappear without trace, so that the fluke psychology prevails, which will directly lead to
cancellation of insurance, thus affecting the development of insurance business. For such
insurance consumers, insurance companies should do a good job in two aspects:
Second, the publicity work of risk management should be strengthened to help people
identify risks and seek reasonable measures and means to deal with risks. In the way of risk
treatment, most people are faced with two choices of retaining risks and transferring risks.
Risk managers will do everything possible to avoid and eliminate risks. They will transfer
the risks that cannot be avoided and eliminated as far as possible. Specifically speaking, for
those who have few opportunities, small losses, or more opportunities but with the loss of a
small amount of risk, it is appropriate to use the method of retention. And for those
insurance products that appear many opportunities, the loss amount is big as well, or for
those insurance products that appear few opportunities, the risk with huge loss amount
should be transferred to the insurance company. Purchasing insurance to transfer risks has
more advantageous means, so this application is more extensive as well.
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