CHAPTER FIVE CONCLUSIONS, DISCUSSIONS AND RECOMMENDATIONS

CHAPTER FIVE CONCLUSIONS, DISCUSSIONS AND RECOMMENDATIONS This chapter presents (1) summary of the study, (2) summary of the findings, (3) discussions of the results, (4) conclusions, and (5) recommendations for further study. 5.1 SUMMARY OF THE STUDY This study focuses on customer behavior on buying life insurance with the American International Assurance Company Limited or AIA. It aims to explore the buying behavior of customers as well as examine whether three types of media mass media, specialized media and personal media influence their buying decisions of life insurance. The subjects studied were the customers of AIA. The respondents must be persons who had a life insurance policy of AIA. After the collection of data was completed, the researcher processed data by using SPSS program for Window version 16 to analyze the data. From the result, most respondents who will invest more in life insurance with AIA, buy AIA life insurance because they want to have benefit coverage and a benefit from the saving element of life insurance. The most important elements in the aspect of the company reputation and services that affect the decision making on buying life insurance with AIA are the high reputation and the strong financial stability of AIA in the life insurance business. In term of sales agents, the sales agents who can be contacted easily and have a good service-mind will encourage customers to buy more life insurance with AIA. Finally, life insurance plans that provide a saving element and a benefit that is worth a high premium have much influence on the customer decision to invest more in AIA life insurance. Moreover, the results show that overall three types of media slightly influence customer decision to buy life insurance with AIA. Internet is the most influential channel that affects customer buying decision of life insurance. Whereas, television

43 and sales agents were respectively in the second and third rank of the media channel that influence customers on buying life insurance with AIA. 5.1.1 Objectives of the Study The objectives of the study were to explore life insurance buying behavior of AIA customers among different gender, age, income level, marital status, occupation and educational background, and to examine the type of media that mostly affects customer decision on buying AIA life insurance. 5.1.2 Subjects, Materials and Procedures 5.1.2.1 Subjects The Subjects of the study were 112 customers who had life insurance policies of AIA. 5.1.2.2 Materials and procedure The study was implemented by conducting a survey research using accidental sampling design. Self-administered questionnaires were distributed to 120 AIA customers and got 112 questionnaires or 93% returned. The customers included males and females in different age, income level, marital status, occupation and educational backgrounds. The questions were designed to study life insurance buying behavior of AIA customers. There were four major parts in the questionnaire. The first part was the demographic part that was designed to collect the personal data of respondents. The second part was designed to examine the characteristics of buying life insurance. The third part - the rating level of agreement was to observe the elements that influence buying decisions of AIA customers in terms of the reputation and services of AIA, sales agents of AIA and life insurance plans of AIA. The last part was to investigate the influence of information perceived from three major types of media on buying decisions of life insurance of AIA. The SPSS program version 16 and Microsoft Excel were used for data processing. Both descriptive and inferential statistics were employed. The results were presented in percentage, frequency tables of ranking, mean and standard deviation values.

44 5.2 SUMMARY OF THE FINDINGS The results of the study can be summarized as follows: 5.2.1 Demographic Information of the Respondents There were a total of 112 respondents in this study. All of them were customers of AIA. The number of male and female in this study is quite similar and half of them were aged between 26-35 years. The majority of them hold the bachelor s degree. The number of married respondents was quite equal to the number of single respondents, and most of them did not have any children. The majority of respondents was the employees of private companies and earn the monthly income between 20,001 to 30,000 Baht. 5.2.2 Life Insurance Buying Behavior of AIA Customers. The findings revealed that the life insurance contracts of most respondents were still effective, and the respondents tended to buy more life insurance policies with AIA in the future. They mostly bought life insurance with the sales agents and almost half of them bought life insurance for themselves. The majority of respondents hold 1-3 life insurance policies and the favorite range of sum insured that they bought was at 100,001 to 200,000 Baht. The majority of respondents considered that having benefit coverage for their family and themselves was the most important reasons to buy life insurance with AIA. 5.2.3 Element Concerning Customer Decision to buy Life Insurance of AIA The results of the study showed the rating level of agreement in order to observe the element that influence buying decisions of AIA customers in term of the company reputation and services, AIA sales agent and life insurance plan of AIA. The results can be summarized as follow:

45 5.2.3.1 Element that influences buying decisions of AIA customers in term of the reputation and services of AIA For the aspect of AIA reputation and services, the most respondents considered that the good reputation of AIA in the life insurance business mostly affected them to buy life insurance products with the company. As well, the strong financial stability made them feel confident to insure with the AIA. Moreover, the varied plans of life insurance moderately affected the respondents to insure with the company. However, the overall company reputation and services greatly affected the customers buying decision. 5.2.3.2 Elements that influences buying decision of AIA customers in term of AIA sales agents In term of the sales agents of AIA, most respondents thought that sales agents who can be contacted easily highly motivated them to invest more in AIA life insurance. Besides, the sales agents who are friendly and have a good service-mind make the customers want to buy life insurance products. Even, the push from the sales agent also affected the respondents buying decision of AIA life insurance. However, overall sales agents moderately affected the customers buying decision. 5.2.3.3 Elements that influences buying decision of AIA customers in term of life insurance plans of AIA According to the results of this study, life insurance that provides the saving element had much effect on the respondents buying decision. The customer also considered that a returning of a lump sum when a policy is due encourages them to buy even though they have to pay a high premium. Further, the respondents decided to buy life insurance because it helps them to set up their financial plan for the future. For the overall life insurance plan, it highly affected the customers to buy life insurance with AIA. 5.2.4 Influence of Media on Life Insurance Buying Decision of AIA Customers. From the findings, the Internet is the favorite channel for the most respondents. The customers considered the Internet as the most effective channel that

46 influences them to buy life insurance with AIA. Further, they considered television as one of many communication channels that has an impact on their buying decision. Absolutely, sales agents also played an important role in motivating the customers to buy life insurance with AIA. In contrast, the exhibitions and radio are not much popular in encouraging customers to buy life insurance with AIA. However, the media moderately affects the customer buying decision of life insurance. 5.3 DISCUSSIONS This section concerns the discussions of findings toward related studies or theories as mentioned in the review of literature. Moreover, more ideas or theories may be discussed in order to support the findings of this study. 5.3.1 The result of study reveals that most respondents bought life insurance for themselves first, and then for their children. This finding was consistent with the results of Penjamas Sirikijwattana ( ก, 2543) who found that the respondents were concerned about themselves and more than half of them bought life insurance under their names. Penjamas Sirikijwattana additionally mentioned that people in the middle age and old age tended to buy life insurance more than the younger persons or teenagers. Penjamas Sirikijwattana explained that the age is an important factor to determine or encourage the decision of people. People in different ages are not similar in thought, attitude, and behavior so they may end up in different actions or decision making. People in the middle age and older age are concerned more about the stability and security of their life than teenagers because they are anxious about their life and family stability that they are about to set up. Moreover, they may look ahead to the future and think that it is necessary to have a financial plan for their retirement. As the adolescent or people at young age may not yet concern themselves on that matter so they do not consider life insurance as an essential product for their lives. However, the most respondents of this study are age between 26 to 35 years and they are considered as the group of working people who are in the age of build up the family. Unsurprisingly, it can be assumed that most respondents in this study bought life insurance for themselves because they consider

47 themselves as breadwinners and want to have something to guarantee their life and financial stability that they are setting up. 5.3.2 In this study, most respondents bought life insurance with AIA because they wanted to have benefit coverage for themselves and their family. This finding was consistent with the results of Penjamas Sirikijwattana ( ก, 2543) who found that the reasons that strongly influence people on buying life insurance policy is the want of benefit coverage for themselves and their family. It can be assumed from the results of the study that the majority of respondents are in the working age. They fully have an ability to earn for living so they might consider themselves as a breadwinner of the family. Absolutely, they must worry about their earning ability and find the way to protect it from any threats that may happen with them. According to the definition of life insurance as defined by Mehr and Cammack (1980), life insurance is a device to reduce risks of a group of people. Further, Sutham Pongsamran, Puengjai Puengpanich, and Virach Na Songkla (,,, 2528,.4 ) stated that life insurance is an instrument to compensate for the losing of earning ability. Therefore the respondents choose life insurance to reduce their risks and compensate their losses. Moreover, observing from the reason of why people buy life insurance as mentioned by Thompson (2010), key persons of the family buy life insurance to secure their life, health and financial status. Therefore, the respondents in this study who also consider themselves as family leaders make a decision to buy life insurance according to the same reason as well. Amazingly, most of the respondents do not decide to buy life insurance for the reason of tax reduction. It can be assumed that the reason for tax reduction is not too much important because most respondents have the moderate monthly income average between 20,001 to 30,000 Baht, therefore, totaling all other expenses that can be exempted from the tax calculation, it is enough for them to not pay additional income tax. 5.3.3 About the reputation and services of AIA that affect customer decision to invest more in life insurance, the most effective element is the high reputation in life insurance business of AIA. This finding correlated with the results of

48 Thammatach Sompong (, 2550) who found that the company image and sales agents mostly satisfied the respondents. Moreover, Lafferty and Goldsmith (1998) propose that corporate credibility and the reputation of the firm can influence consumers attitudes and purchase intentions. The consumers are both interested in the reputation of the companies who make the brands they buy, and that their services for the companies customer. Therefore, the majority of respondents decided to buy life insurance with AIA because they believed in the reputation of AIA. For sales agents, the customers decided to buy life insurance with AIA because they were impressed with the behavior of AIA sales agents who always keep in touch and can be contacted easily. According to Bayraktaroglu and Tabak (2004), even though, salespeople moderately affect customer purchasing decision, customers still have good attitude toward salespeople and they accept that salespeople have an impact on their purchasing decision. The sales persons who are patient and keep re-visiting the customers have great influence on customers purchasing decision. For that reasons, sales agents who constantly contact with the customers might gain trust from the customer and lead to the success in selling life insurance products. 5.3.4 With regard to the media that influences customer decision to buy AIA life insurance, the study shows that the Internet had the greatest influence. According to Jepsen (2007), most consumers use the Internet to find pre-purchase information because it provides the largest amount of information available, freedom from physical contact with sales persons and low cost. Therefore, the Internet seems to be the most favorite channel of the respondents for searching for information before making a decision. Moreover, for the reason that life insurance involves a lot of money so the respondents need to know more information before making a buying decision. Referring to the high-involvement buying behavior mentioned by Mullins, Walker, Boyd, and Larreche (2004), the customers took financial risks when they buy the high-involvement product like a life insurance policy. They had to be sure that the products were worth their money. Therefore searching information before buying can ensure the right decision making. Further, the finding is also consistent with the theory of Pride and Ferrell (1987) which stated that personal and public sources were the most credible sources, but the commercial sources like Internet was used only to

49 evaluate products or services. As the respondents in this study already hold life insurance policy of AIA so they sought more information in the Internet just for comparing the information between a new insurance policy that they were going to buy and the existing one that they already had. They may not need to rely on personal sources as they can refer to their own past experience. 5.4 CONCLUSIONS This research aimed at exploring the buying behavior of AIA customers. The following conclusions can be drawn from the discussion above. 5.4.1 The results of the study showed that most of the respondents bought life insurance because they wanted benefit coverage as stated in the insurance contract for themselves and their family, for its saving element and for medical benefits. They preferred to buy the life insurance with the sum insured between 100,001 to 200,000 Baht and the customers seem to hold 1 to 3 policies per one person. 5.4.2 The respondents chose to buy life insurance with AIA because they believe in AIA reputation in the life insurance business and were impressed with sales agents of AIA who can be contacted easily. Besides, they buy life insurance with AIA because they like the saving element provided by the life insurance plan. 5.4.3 Before making a buying decision, the results reveal that most respondents mostly depended on information gathered from the Internet, television and sales agents. Other types of media like exhibitions, magazines, leaflets/brochures or radio did not have much influence on the respondent s buying decision. AIA or even other insurance companies can use the results from this study to select the best channel to promote their companies and products. Moreover they can use the findings to improve their sales strategies in order to reach the target customers and influence them to buy more life insurance policies. 5.5 RECOMMENDATIONS FOR FURTHER RESEARCH The limitations and recommendations are indicated as a guide for further study as follows:

50 5.5.1 First, this study focused only on some customers of the American International Assurance Company, Limited or AIA. Therefore, further study should be conducted on a larger sample size of AIA customers or expanded to the customers of other insurance companies. 5.5.2 In order to make the study more advanced, further study should be conducted by qualitative research with a high technique of research methodology, as well as the sophisticate statistics program for data analysis. Other type of research instruments e.g. in-dept interview can be applied to use in order to gain the specific results of study. 5.5.3 This study focused only on three elements concerning the buying decision of life insurance which are company reputation and services, sales agents and life insurance plans. Further study should be done by including others aspects in order to compare and obtain the different results. 5.5.4 In conclusion, according to the limitations, great care should be taken in the generalization or application of these results. It is, thus, recommended that further research in this field be carried out more extensively.