Non-life insurance cancellation: a systematic quantitative literature review
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Non‑life insurance cancellation: a systematic quantitative literature review Manuel Leiria1 · Nelson Matos2 · Efigénio Rebelo3 Received: 10 February 2020 / Accepted: 29 March 2020 © The Geneva Association 2020
Abstract The purpose of this paper is to provide an overall picture of the current investigation of insurance cancellation in the non-life business, taking into consideration the influence of intermediaries on customers’ decisions using the systematic quantitative literature review method. This article identifies the most important factors that explain switching behaviour in non-life insurance. It also highlights the impact and responsibility of insurance companies’ marketing strategies and tactics on insurance policy cancellations and customer churn. This research contributes to increasing scientific knowledge on insurance cancellation in the non-life business and to the development of actions to retain customers, with a higher level of effectiveness, improving the results of insurance companies and the performance of the industry. Keywords Non-life insurance · Product cancellation · Intermediary · Customer retention · Business strategy
* Manuel Leiria [email protected] Nelson Matos [email protected] Efigénio Rebelo [email protected] 1
Faculty of Economics and Research Centre for Tourism, Sustainability, and Well‑Being (CinTurs), University of Algarve, Campus de Gambelas, Edifício 9, 8005‑139 Faro, Portugal
2
School for Management, Hospitality and Tourism (ESGHT) and, Research Centre for Tourism, Sustainability, and Well‑Being (CinTurs), University of Algarve, Campus da Penha, 8005‑139 Faro, Portugal
3
Faculty of Economics, University of Algarve, Campus de Gambelas, Edifício 9, 8005‑139 Faro, Portugal
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M. Leiria et al.
Introduction Insurance plays a fundamental role in work or in the everyday life of a modern society; it is a necessary precondition for many activities (Liedtke 2007). The insurance business is very important economically and as an enabler for the development of other activities (e.g. Han et al. 2010). It is a determining condition of economic growth because it manages risk for companies and states (Krivokapic et al. 2017). It also enables people to be and stay active, since they do not have to worry about all of the possible adverse effects that a certain activity might entail (Liedtke 2007). One of the characteristics of this industry has been the difficulty of managing customer retention (Brockett et al. 2008; Cohen and Siegelman 2010; Guillen et al. 2003). Insurers’ retention strategies have been ineffective, considering their low capacity to strategically retain their best customers (Kofman and Nini 2013). According to Bolancé et al. (2016), customer retention is one of the most important priorities for most insurance companies. Losing and gaining customers through brand switching is a major well-founded concern for insurance firms (Brockett et al. 2008). In insurance, a small increase in retention rates may add millions to premium revenue
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