1

The Problem and Scope

Background
Union Assurance were enjoying more than 50% of their business portfolio
from the Motor Insurance Segment.
With The Threat of new entrances it was found that Union Assurance going
to lose major portion of their motor insurance portfolio in near future.
To over come this issue, the next best option they have is to capture Fire
Insurance segment. But up to now thy are holding only 10% of this fire
insurance segment. All other 90% is in the competitors hand.

Problem Statement
What are the critical factors considered by fire insurance policy holders in
their buying decision and how do these factors influence their purchase
intention of the product? 2
Significance

Sales force Perspective

Company Perspective
To identify new prospects
To identify the opportunities
To identify correct consumer
To regain the market share
segment

The Objectives of the Report

1. To identify the factors considered by fire insurance policy holders when
they are purchasing a fire insurance policy.

2. To explain how these factors influence customer purchase intention.

3. To identify what factors considered by competitor customers in their

purchase decision.

4. To provide suggestions to the management to craft their strategies to gain

3
competitive advantage.
 Research Design and Methodology
Population Face to Face
Judgment Sample
Current policy holders in Approach with
sampling
Colombo District- Both Respondents
Corporate : 30
Union Assurance &
Individual : 90
Competitor Customers
Total Sample : 120

Data Collection
Data Presentation and via Questionnaire
Analysis Tools
(Using Likert Scale)

Descriptive statistical Inferential statistical

analysis analysis
Variable mean value Regression analysis
Standard deviation
Correlation analysis (To test Hypotheses )

(To show association among variables)

4
 Review on Literature

Consumer Behavior in Insurance Industry (Ulbiniate,Kucinskiene and

Moullec, 2011)

Buying Decision Process (Kotler and Armstrong, 2004)

Insight to Buying Decision Process in Insurance Industry (Ulbiniate,

Kucinskiene and Moullec, 2011)

Types of Consumer Buying (Jciotta, 2010)

Factors Influencing Consumer Buying (Lewis and Chiplin,1986)

Service Marketing (Gronroos,1988)

Impact of Extended Marketing Mix to more Tangible Service Offerings

5
(Gronroos, 1990)
Review on Literature Cont

Insights in to factors affecting the intention of purchasing of fire

insurance policies

i. Brand Image (Gupta 2008)

ii. Policy Coverage (Union Assurance, 2010) (Chathuranga, 2010)
iii. Premium (Price) ( Laury, 2001, p.18).
iv. Consumer Knowledge (Lin and Chen, 2006, pp.260-265)
v. Speed of Claims Settlement (Qaiser, n.d. pp.3-5)

vi. Transparency (Boston Consulting Group, 2010, p.9)

6
 Conceptual Model
Independent Variables Dependent Variable

7
 Hypothesis of the Study
1) There is a positive relationship between brand image and purchase intention of
a fire insurance policy

2) There is a positive relationship between incensement of a policy coverage

positively influence the consumer purchase decision

3) There is a positive relationship between premium and purchase intention

4) There is a positive relationship if the consumer knowledge higher then

purchases intention also higher.

5) There is a positive relationship between the speed of claims settlement process

and purchase intention of a fire insurance policy.

6) There is a positive relationship between transparency and purchase intention

of a fire insurance policy.
8
 Operationalization
Variables Indicators/Attributes Measurement Scale Question
Number

Brand Image Brand Awareness 5 point Likert Scale 1 to 4

Reputation of the Brand questions
Brand Customer Relationship
Brand Perception
Does it cover your all fire Insurance
Policy Coverage needs? 5 point Likert Scale 5 to 7
(Scope of Cover) requirement of Basic cover vs. add-on on questions
covers
Requirement of package policies vs.
individual policies
Competitiveness of the premiums
Premium Affordability 5 point Likert Scale 8 to 10
Credit Period questions
9
Operationalization Cont

Consumer Knowledge What its covered 5 point Likert Scale 11 to 15

What it does not covered questions
Excess limits
Terms and conditions
Claims Settlement Process

Speed of Claims On the Spot Assessment 5 point Likert Scale 16 to 18

Settlement Quickness of the Claim Processing questions
Convenience

Transparency Trust 5 point Likert Scale 19 to 22

Promised and deliver questions
Clarity of terms and conditions
Believe in sales person

Purchase Intention Intention to buy new policy Intention to buy Scale 23 to 25

Intention to shift to a new policy Questions
Readiness to change the current insurance
agent. 10
 The Data Presentation & Analysis
Descriptive Statistics
N Mean Std. Varia Variable Mean
Deviation nce
Brand Image 120 3.8313 .71535 .512 Transparency 4.46
Policy Coverage 120 4.3604 .94480 .893 Purchase . Int 4.43
Premium 120 premium 4.42
4.4250 .77900 .607
Consumer 120 Consume Know. 4.41
4.4146 .84235 .710
Knowledge
Speed of Claims 120 Speed of Claims 4.40
4.4028 .92268 .851 Settlement
Settlement
Transparency 120 4.4625 .86095 .741 Policy Coverage 4.36
Purchase 120
4.4333 .96686 .935 Brand Image 3.83
Intention

All Independent Variables Except Brand Image shows the mean value between 4.00 to
5.00 which means average respondents have scored between the Agreed to Strongly
Agreed State.

Except Brand Image and Premium Variables all other Variables shown higher Standard
Deviation which means higher dispersion of data around central tendency.
11
 Correlation Analysis

Correlation Matrix
Brand Policy Premium Consumer Speed of Claims Transparency Purchase
Image Coverage Knowledge Settlement Intention
Brand Image 1.00 .745** .727** .757** .739** .761** .762**

Policy .745** 1.00 .827** .846** .857** .810** .796**

Coverage
Premium .727** .827** 1.00 .888** .861** .825** .863**

Consumer .757** .846** .888** 1.00 .890** .865** .864**

Knowledge
Speed of .739** .857** .861** .890** 1.00 .902** .881**
Claims
Settlement
Transparency .761** .810** .825** .865** .902** 1.00 .869**
Purchase .762** .796** .863** .864** .881** .869** 1.00
Intension
** Correlation is significant at the 0.01 level
* Correlation is significant at the 0.05 level

All Independent Variables shown Strong Positive Correlation with the dependent
Variable Purchase Intention. With the correlation analysis it is apparent that all
independent variables are statistically significant at the 0.01 Level. This highlights
that probability of this correlation coefficient occurring by chance alone is less that
0.01 (1%) 12
 Regression Analysis
Model Summary

Std. Error of the

Model R R Square Adjusted R Square Estimate
1 .919a .844 .835 .39231
a. Predictors: (Constant), Transparency, Brand Image, Policy Coverage, Premium, Consumer
Knowledge, Speed of Claims Settlement

R square for the model is 0.844 and this implies that 84.84 % of the variance
explained by this model. Which means high degree of goodness to fit explained by this
model

* Also it explains there can be limited other variables which influences the intention of
purchasing of Fire Insurance policies in Sri Lanka.

13
 ANOVAb

Model Sum of Squares Df Mean Square F Sig.

1 Regression 93.853 6 15.642 101.634 .000a
Residual 17.391 113 .154
Total 111.244 119
a. Predictors: (Constant), Transparency, Brand Image, Policy Coverage, Premium, Consumer Knowledge, Speed
of Claims Settlement

b. Dependent Variable: Purchase Intention

Overall significance of the study is high ( P= 0.000 < 0.05)

The F-Test Value was 101.634 with a significance of 0.000 which mans there is
no such different between variables and probability of these variables occurring
by chance is less that 0.05.

Therefore Independent variables of this research are worthy to consider for

Union Assurance PLC to get a success in the fire insurance segment.
14
Hypothesis Testing
Coefficients
Un-standardized Standardized
Coefficients Coefficients
Model B Std. Error Beta T Sig.
(Constant) -.567 .223 -2.545 .012
Brand Image
.175 .084 .130 2.094 .039
Policy Coverage
-.065 .083 -.064 -.793 .429
Premium
.351 .109 .282 3.209 .002
Consumer Knowledge .134 .117 .117 1.147 .254
Speed of Claims Settlement .295 .113 .282 2.618 .010
Transparency
.263 .105 .234 2.499 .014
a. Dependent Variable: Purchase Intention

Coefficient values of independent variables shows Except policy coverage

variable all other variables have positive impact on dependent variable.

15
 Hypothesis Testing Cont
Independent Sig.
Variables With the Coefficient analysis it is apparent
four that Independent Variables are significant
Premium 0.002
at the P-Value 0.05.
Speed of Claims 0.010
Transparency 0.014 Premium 0.000 < 0.05
Speed of Claims 0.010 < 0.05
Brand Image 0.039
Transparency 0.014 < 0.05
Consumer Know. 0.254 Brand Image 0.039 < 0.05

Policy Coverage 0.429

premium, speed of claims settlement considered as the most important variables

because these two variables has the highest Beta value of 0.282 and the highest P values
(0.002 and 0.010)

Independent variables Consumer Knowledge ( 0.254> 0.05) and Policy Coverage (

0.429 > 0.05) is not significant at the 0.05 level.

16
 Hypothesis Testing Cont
Hypothesis 01 (0.039<0.05)
Hypothesis 03 (0.002<0.05)
Accepted Intention of
Hypothesis 05 (0.010<0.05)
Purchasing
Hypothesis 06 (0.014<0.05)

Hypothesis 02 (0.429>0.05)
Rejected Intention of
Hypothesis 04 (0.254>0.05) Purchasing

Hypothesis 01, 03, 05, 06 was accepted through the study as they shows significant
relationship at the P- Value to the dependent variable Intention of purchasing.

Hypothesis 02, 04 was rejected through the study as they shows no significant
relationship at the P-Value to the dependent Variable Intention of purchasing.

17
 Conclusions and Recommendations

Conclusion

1. Premium has a positive relationship to the intention of purchasing

2. Brand image has a positive relationship to the intention of purchasing
3. Speed of claims settlement has a positive relationship to the intention of
purchasing
4. Transparency has a positive relationship to the intention of purchasing
5. Policy coverage doesnt have a positive relationship to the intention of
purchasing
6. Consumer Knowledge doesnt have a positive relationship to the intention of
purchasing

18
Recommendations

Union Assurance PLC can be recommended to focus on following

independent variables

Premium
Speed of Claims Settlement
Transparency
Brand Image

In order to capture the fire insurance market segment.

19
Thank You

20