Summary of PhD thesis: Researching into the level of customer satisfaction with life-insurance companies in Vietnam

The research focuses on evaluating customer satisfaction withthe service quality, corporate image, service price, perceived value of lifeinsurancecompanies in Vietnam. Thereby, the research proposes recommendations to improve customer satisfaction with life-insurance companies in Vietnam.

MINISTRY OF EDUCATION AND TRAINING

FOREIGN TRADE UNIVERSITY

SUMMARY OF PHD THESIS

RESEARCHING INTO THE LEVEL OF CUSTOMER SATISFACTION WITH LIFE-INSURANCE COMPANIES IN

VIETNAM

Major: Business Administration

NGUYEN DUC NHAN

Hanoi – 2019

MINISTRY OF EDUCATION AND TRAINING

FOREIGN TRADE UNIVERSITY

NGUYEN DUC NHAN

Supervisor: Assoc Prof Dr Pham Thi Hong Yen

Assoc Prof Dr Phan Chi Anh

Hanoi – 2019

5 Các nhân tố ảnh hưởng đến sự hài lòng của khách hàng khi sử dụng dịch

vụ bảo hiểm nhân thọ của Tổng công ty Bảo Việt nhân thọ Tạp chí Kinh

tế Châu Á Thái Bình Dương tháng 4/2018

INTRODUCTION

1 The necessity of the research

The insurance market is demonstrating an increasingly significant role and position in both the economy and the society It is also contributing to the successful implementation of key solutions in Vietnam’s Socio-economic

development strategy for theperiod of 2011-2020 Firstly, the insurance market

has contributed to the addition of long-term and stable investment capital for the economy and the consolidation of the economy’s balance of investment and savingsstrengthened macro balances of the economy in investment and savings According to the statistics of insurance companies, around 80% of significant infrastructure construction works and economic works are financially protected by insurance companies in case of insured incidents without relying on the supporting fund for damage from the state budget This contributes to the successful implementation of tight fiscal policy and saves

budget spending.Secondly, by the end of 2015, the insurance market has

created jobs for more than 400.000 workers with stable income and financial

and insurance training Thirdly, along with foreign insurance companies

joining the insurance market, the capital contribution of foreign strategic investors to domestic insurance companies not only helps to improve their financial, executive and administration capacitybut also contributes to building the image of a healthy investment environment and attracting foreign investors

to other related fields According to the statistics of Insurance Supervisory Authority (Ministry of Finance), as of 31/12/2016, the insurance market has 62 insurance companies (including 29 non-lifeinsurance companies,18 life-insurance companies, 02 reinsurance companies, 13 insurance broker companies) and 01 branch of a foreign non-life insurance company

Along with the remarkable development of the insurance industry in general, the Vietnamese life-insurance sector in particular is also growing rapidly.According to data from the Insurance Supervisory Authority (Ministry

of Finance), the number of life-insurance companies in Vietnam has increased from 09 companies by the end of 2007 to 18 companies at present with total assets estimated at 171.828 billiondong (as of 31/12/2016) Among them, the shares of total premiums belong to large companies such as BaoViet Life (27.7%), Prudential (24.9%), Manulife (12.5%), Dai-ichi (11.2%), AIA (9.7%), Chubb (3.8%), Generali (3.1%) and Hanwha (2.3%)

Despite the potential of the industry and the reality that it is growing rapidly, the number of Vietnamese people participating in life-insurance is very limited.The psychology of risk aversion, restricted awareness and difficulties in accessing specific information about programs, productsand benefits in practice are huge obstaclesthat prevent customers from participating in life-insurance services.A majority of customers are often concerned and worried most about how companies handle customers’ benefits when insured events occur

Given the demand for development of the Vietnamese insurance industry, researching into customer satisfaction with life-insurance companies in Vietnam is of great importance as it will lay the foundation for improving and innovating insurance products and services as well as improving customer satisfaction towards sustainable development of the industry

Originating from the above-mentioned theoretical and practical

requirements, I decided to choose“Researching into the level of customer satisfaction with life-insurance companies in Vietnam” as the topic for my

doctoral thesis in business administration

2 Research objectives

The research focuses on evaluating customer satisfaction withthe service quality, corporate image, service price, perceived value of life-

recommendations to improve customer satisfaction with life-insurance companies in Vietnam

The research performs specific tasks as follows:

(1) Developing an analytical framework, measurement scales and a set of criteria for assessing customer satisfaction in accordance with theoretical basis and based on inheritance and acceptance of previous research findings about customer satisfaction

(2) Using the analytical framework, measurement scales and the set of criteria

to assess customer satisfaction with life-insurance companies in Vietnam

(3) Proposing and recommending some solutions to improve products and services with the aim to assisting life-insurance companies in Vietnam to improve customer satisfaction

3 Research subjects and scope

▪ Research subjects

The main research subjects of this doctoral thesis include the degree of

influence of several factors (corporate image, service price, service quality, perceived value) on customer satisfaction and the evaluation of customer

satisfaction with such factors

• Research scope

-Scope of content: The doctoral thesis focuses on theoretical and practical basis

of customer satisfaction withCorporate image, Service quality, Service price, and Perceived value of life-insurance companies in Vietnam

• Corporate image refers to the brand reputation and prestige of a company

and its level of corporate social responsibility

• Service quality refers to the dimensions of tangibles,reliability, empathy,

assurance and responsiveness

• Service price refers to the costs that customers have to pay for purchasing

insurance products

• Perceived value referstothe level of customers’ perception of the insurance

provisions, the indemnity and the value of insurance products

- Spatial scope: The dotoralthesis conducted a survey with 1,476 customers

who have bought and used life-insurance products of the following companies: BaoViet Life, Prudential Vietnam, Manulife Vietnam, Dai-ichi Vietnam, AIA Vietnam, CHUBB Vietnam and Hanwha Life Vietnam

- Time scope: data collected by surveys, interviews conducted between

January, 2015 to December, 2016

4 Research questions

To clarify the research contents, the doctoral thesis needs to answer the following questions:

Question 1: What are the factors that affect customer satisfaction with

life-insurance companies in Vietnam?

Question 2: What are the analytical framework,measurement scales and set of

criteria to assess customer satisfaction with life-insurance companies in Vietnam?

Question 3: What are the strengths and limitations in customer satisfaction with

life-insurance companies in Vietnam? What are the causes of these limitations?

Question 4: What are the solutions to improve customer satisfaction with

life-insurance companies in Vietnam?

5 Structure of the thesis

To present the whole research contents, the doctoral thesis is divided into 7 main sections as follows:

(1) Introduction

(2) Chapter 1: Literature review on customer satisfaction

(3) Chapter 2: Theoretical issues on customer satisfaction with life-insurance companies

(4) Chapter 3: Methodology for studying customer satisfcation with insurance companies in Vietnam

life-(5) Chapter 4: Research findings

(6) Chapter 5: Implications and recommendations on solutions to improve customer satisfaction with life-insurance in Vietnam

(7) Conclusion

CHAPTER 1: LITERATURE REVIEW ON

CUSTOMERSATISFACTION 1.1 Literature review on foreign studies

1.1.1 Customer satisfaction

The term “customer satisfaction” has attracted the attention of many scholars, researchers and administrators not only because of its importance in business strategies but also because it has become the target that every business activity is heading towards in a fiercely competitive market Therefore, there have been a great deal of studies on customer satisfaction, and thus a wide range of different views and approaches to customer satisfaction as well as models to measure customer satisfaction have been provided

1.1.2 Customer satisfaction with insurance companies

Research into customer satisfaction with insurance companies has been conducted in many countries, most of which focuses on customer satisfaction with service quality

Based on data collected from 600 insurance clients, Ker-Tah Hsu's study (2011) showed that the corporate social responsibility of insurance companies would contribute to improving customer satisfaction as well as prestige and image of thecompanies

Araceli Picon et al (2013) proposed a new model for analyzing the relationship between customer satisfaction and loyalty through collecting 785 questionnaires from 74 insurance companies

Research by Alawni Mohammed Saad et al (2016) on the quality of insurance services in Saudi Arabia showed that there was a relationship

between service quality and customer satisfaction and loyalty to insurance services

1.2 Literature review on domestic studies

1.2.1 Customer satisfaction

In Vietnam, based on the inheritance of views on customer satisfaction drawn from foreign research andmodels of customer satisfaction indexsuch as CSI, ACSI and ECSI, Vietnam Customer Satisfaction Index (VCSI) has been developed.Similar to the customer satisfaction models mentioned above, VCSI model also includes causal variables and outcome variables VCSI model consists of seven variables including 04 causal variables, namely (1)brand image, (2) expected quality, (3) perceived quality, (4) perceived value The intermediate variable is (5) customer satisfaction Two outcome variables are (6) complaints and (7) customer loyalty The difference between VCSI model and other CSI models is the different relationships between latent variables

1.2.2 Customer satisfaction with insurance companies

Most of the existing domestic research into customer satisfaction in the field of insurance has just reached two points: (1) studying customer satisfaction with the service quality of insurance companies Within this research topic, most domestic studies usedeither the SERVQUAL or the SERVPERF model to assess customer satisfaction; (2) new studies are limited

to a number of master's theses in business administration while there is a lack ofofficial academic research

1.3 Research gaps

Around the world, studying customer satisfaction is a research topic that attracts a great deal of interest from scholars and is an important field of science that combines service management and marketing management In

Vietnam, research into customer satisfaction is still considered as a relatively new field of research and there have not been many noticeable studies, especially in the field of insurance

The literature review of research into customer satisfaction in the field of insurance in Vietnam and around the world shows that most research focuses

on customer satisfaction with the service quality of insurance companiesand the SERVQUAL model is used as the platform/basis for measuring customer satisfaction in the field of insurance in general and life-insurance sector in particular Realizing the situation of foreign and domestic research on customer satisfaction with insurance companies, this doctoral thesis wishes to study customer satisfaction with life-insurance companies in particular in terms of not only the service quality but also other factors including corporate image, service price and perceived value

CHAPTER 2: THEORETICAL ISSUES ON CUSTOMER

SATISFACTION WITH LIFE-INSURANCE COMPANIES

2.1 Theories of customer satisfaction

2.1.1 The concept of customer satisfactionhàilòngthỏamãn

Currently, in the world as well as in Vietnam, the concept of customer satisfaction has often been mentioned as an important factor affecting the competitiveness of companies compared to its competitors However, in fact, based on customer satisfaction studies, there are quite a number of different views on customer satisfaction It can be seen that authorshave different starting points when defining the concept of customer satisfaction but they share a common view which is to associate this concept with customers’attitude and sentiments, or more specifically their satisfaction with the capacity of service providers to meet their expectation

2.1.2 Factors affecting customer satisfaction

2.1.2.1 Service quality

The SERVQUAL model (Parasuraman, 1988) is widely used and has shown its suitability for application in assessing the service quality of a variety of services such as finance, banking, dining and hotels The service quality model

of Parasuraman et al (1988) shows the overall picture of service quality and consists of five components, namely reliability, responsiveness, assurance, empathy and tangibles

2.1.2.2 Service price

Price is a form of monetary expression of the value of goods and services Prices are determined based on the value in use and perception of customers about the products and services they use Customers do not necessarily buy products or services of the highest quality but they will buy products or services that bring them the most satisfaction Consequently, factors such as

customer perception of price and cost (cost of use) do not affect the service quality but will influence customer satisfaction

2.1.2.3 Corporate image

Corporate image is defined as "the impression of a company in the minds of customers" (Boyle, 1997) or "the result of the interaction from experiences, impressions, beliefs, feelings and knowledge that customers have with the company/organization"(Worcester, 1997) According to Fombrun (1996), corporate image can also be understood as “the image that customers attach with the company through receiving messages” Corporate image often connects customers’ memory with the company/organization (Keller & Aaker, 1992)

2.1.2.4 Perceived value

Perceived value is considered as the customer’s overall evaluation of the value of a product or service based on the perception of what is received and what is given (Sweeney et al., 1997; Zeithalm et al., 1988) On the other hand, perceived value could be one of the most important measurements to create competitive advantages (Parasuraman, 1997) Studies by Crosby & Stephens (1987) and Furman (2010) show that perceived value is regarded as the determinant of customer satisfaction

2.2 Analytical framework and research hypotheses

The review of domestic and foreign studies shows thatit is necessary to develop scales to measure customer satisfaction with life-insurance companies

in Vietnam by providing adjustments and supplementsto such measurement scales based on the inheritance and addition of scientific approaches to measure customer satisfaction and service quality that have been verified in the past, based on theoretical and empirical research experience on customer satisfaction in general and customer satisfaction with service quality in