SAMVAD: International Journal of Management

Open Access Open Access  Restricted Access Subscription Access

Ethical Issues in Insurance Marketing in India: The Policy Holders’ View


Affiliations
1 Bharati College, University of Delhi, India
2 Centre for Management Studies, Jamia Millia Islamia, India
 

Ethics is a central problem in financial services industry, especially in life insurance where customers are uncertain about the long-term benefits of the product. The life insurance industry in India is currently facing an image problem. The number of complaints pertaining to Unfair Business Practices is increasing rapidly year on year basis. Keeping this in mind, this study was carried out with the broad objective of examining the policyholders' view regarding ethical issues in insurance marketing in India. The specific objectives aimed at identifying major ethical issues in insurance marketing corresponding to 7Ps of service marketing, finding out which "Ps" of service marketing are contributing the most to unethical behavior of life insurance companies in India and comparing public life insurer i.e. LIC with private insurers on ethical standards. A questionnaire based survey was carried out on a total number of 95 customers within Delhi region. A non-probabilistic convenience sampling method was used. The customers were asked to rate 38 ethical issues on a 5 point Likert Scale. The study found out that life insurance companies are not fair and transparent while marketing their policies to customers. According to 7Ps of marketing, Product, People and Promotion issues are the key ethical issues portrayed by policyholders of both LIC and private sector. Further, the study also identified nine unethical factors as perceived by policyholders using factor analysis. These factors mainly focus on company's fairness and transparency, professionalism, promotion and marketing policies. The results of the data from the study infer that there are serious ethical lapses on part of life insurers and customers are not satisfied on the ethical standards of life insurance companies.

Keywords

Ethics, Insurance Marketing, Unfair Business Practices.
User
Notifications
Font Size

  • Alrubaiee, L. (2012). Exploring the relationship between Ethical Sales Behavior, Relationship Quality and Customer Loyalty. International Journal of Marketing Studies, 4(1), 7-25.

  • Bellizzi, J. A. & Hite, R. E. (1989). Supervising unethical sales force behavior. Journal of Marketing, 53(2), 36-47.

  • Chen, M.-F., & Mau, L. H. (2008). The impacts of ethical sales behavior on customer loyalty in the life insurance industry. The Services Industries Journal, 59-74.

  • Cooper, R., & Frank, G. (1991). Ethics in the Life Insurance industry: The issues, helps and hindrances. Journal of American Society of CLU and ChFC, 54-66.

  • Cooper, R. W., & Frank, G. L. (2002). Ethical challenges in the two main segments of the insurance industry: Key considerations in the evolving financial services marketplace. Journal of Business Ethics, 36(1/2), 5-20.

  • Cooper, R. W., & Frank, G. L. (2005). The highly troubled ethical environment of the life insurance industry: Has it changed significantly from the last decade and if so, why? Journal of Business Ethics, 149-157.

  • Crosby, L. A., Evans, K. R. & Chowles, D. (1990). Relationship quality in services selling: An interpersonal influence perspective. Journal of Marketing, 54(3), 68-81.

  • Dubinsky, A. J., Howell, R. D., Ingram, T. N. & Bellenger, D. N. (1986). Salesforce Socialization. Journal of Marketing, 60(Oct), 192-207.

  • Ferrell, O. C. (2015). Nature and Scope of Marketing Ethics. Retreived 20 Jul 2015 from www.iped-uk.com/Marketing_Ethics.doc

  • Ferrell, O. C., Fraedrich, J. & Ferrell, L. (2005). Business Ethics: Ethical Decision Making and Cases. Boston: Houghton Mifflin.

  • Ferrell, O. C. & Ferrell, L. (2005). Ethics and Marketing Education. Marketing Education Review.

  • Ferrell, O. C. & Gresham, L. G. (1985). A contingency framework for understanding ethical decision making in marketing. Journal of Marketing, 49(3).

  • Futrell, C. M. (2002). Fundamentals of selling: Customers for life. (7th ed.). New York: McGraw-Hill.

  • Greunen, C. V. (2010). Unethical decision making and behavior in the Life Insurance Sector of South Africa. MBA dissertation, Nelson Mandela Metropolitan University.

  • IRDA. (2011-12, 2012-13, 2013-14). Annual Report.

  • Mamun, Z. M. (2014). Ethical Standards in Life Insurance Companies in Bangladesh: The Policy Holders’ View. Retreived 10 May 2015 from http://www.wriec.net/wp-content/uploads/2015/07/1I3_Mamun.pdf

  • Mooi, E. & Sarstedt, M. (2012). Chapter 8 – Factor Analysis. A Concise Guide to Market Research. Retrieved 10 Jul 2015 from http://www.guide-market-research.com/index.php?option=com_content&view=article&id=23&Itemid=37

  • Morgan, R. M., & Hunt, S. D. (1994). The commitment-trust theory of relationship marketing. Journal of Marketing. 58(Jul), 20–38.

  • Murphy, P. E. & Laczniak, G. R. (1981). Marketing Ethics: A Review with Implications, Review of Marketing.

  • Halan, M., Sane, R, & Thomas, S. (2013). The case of the missing billions: Estimating losses to customers due to missold life insurance policies. Working Paper WP-2013-007, IGIDR.

  • Hoffman, K. D., Howe, V., & Hardigree, D. W. (1991). Ethical dilemmas faced in the selling of complex services: Significant others and competitive pressures. Journal of Personal Selling and Sales Management, 11(4), 13-25.

  • Holdon, R. K. (1990). An exploratory study of trust in buyer ± seller relationships. A Dissertation, Ann Arbor, MI: University Microfilms International.

  • Howe, V., Hoffman, K. D., & Hardigree, D. W. (1994). The relationship between ethical and customer oriented service provider behaviors. Journal of Business Ethics, 13(7), 497-506.

  • Roman, S. (2003). The impact of ethical sales behavior on customer satisfaction, trust and loyalty to the company: An empirical study in the financial services industry. Journal of Marketing Management, 19(9/10), 915-939.

  • Smith, N. C., & Quelch, J. A. (1993). Ethics in Marketing. Homewood, IL: Irwin.

  • Sorab, S., & Shahrukh, N. T. (2012). Ethical Issues in Insurance Marketing. Acta Universitatis Danubius, 8(5), 140-156.

  • Venkatesh, M. R. (2011). An Ethical Introspection of selling Life Insurance in India. International Journal of Social and Economic Research, 286-294.

  • Zeithaml, V. A. (1981). How consumer evaluation processes differ between goods and services. In: Donnelly, J. H. & George, W. R., editors, Marketing of Services: AMA Special Conference, Orlando, FL: American Marketing Association.


Abstract Views: 712

PDF Views: 264




  • Ethical Issues in Insurance Marketing in India: The Policy Holders’ View

Abstract Views: 712  |  PDF Views: 264

Authors

Reena Talwar
Bharati College, University of Delhi, India
Saiyed Wajid Ali
Centre for Management Studies, Jamia Millia Islamia, India

Abstract


Ethics is a central problem in financial services industry, especially in life insurance where customers are uncertain about the long-term benefits of the product. The life insurance industry in India is currently facing an image problem. The number of complaints pertaining to Unfair Business Practices is increasing rapidly year on year basis. Keeping this in mind, this study was carried out with the broad objective of examining the policyholders' view regarding ethical issues in insurance marketing in India. The specific objectives aimed at identifying major ethical issues in insurance marketing corresponding to 7Ps of service marketing, finding out which "Ps" of service marketing are contributing the most to unethical behavior of life insurance companies in India and comparing public life insurer i.e. LIC with private insurers on ethical standards. A questionnaire based survey was carried out on a total number of 95 customers within Delhi region. A non-probabilistic convenience sampling method was used. The customers were asked to rate 38 ethical issues on a 5 point Likert Scale. The study found out that life insurance companies are not fair and transparent while marketing their policies to customers. According to 7Ps of marketing, Product, People and Promotion issues are the key ethical issues portrayed by policyholders of both LIC and private sector. Further, the study also identified nine unethical factors as perceived by policyholders using factor analysis. These factors mainly focus on company's fairness and transparency, professionalism, promotion and marketing policies. The results of the data from the study infer that there are serious ethical lapses on part of life insurers and customers are not satisfied on the ethical standards of life insurance companies.

Keywords


Ethics, Insurance Marketing, Unfair Business Practices.

References