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International Association for the
Study of Insurance Economics
études et Dossiers
études et Dossiers No. 369
World Risk and Insurance
Economics Congress
25-29 July 2010
Singapore
Working Paper Series of
The Geneva Association
The Geneva Association - General Secretariat - 53, route de Malagnou - CH-1208 Geneva
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International Association for the
Study of Insurance Economics
Études et Dossiers
Études et Dossiers No. 369
World Risk and Insurance
Economics Congress
25-29 July 2010
Singapore
February 2011
Working Paper Series of
The Geneva Association
This document is free to download from The Geneva Association website, www.genevaassociation.org
© Association Internationale pour l'Etude de l'Economie de l'Assurance
The Geneva Association - General Secretariat - 53, route de Malagnou - CH-1208 Geneva
Tel.: +41-22-707 66 00 - Fax: +41-22-736 75 36 - [email protected] - www.genevaassociation.org
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The Geneva Association________________________Etudes et Dossiers no. 369
Group Insurance Marketing in Taiwan: A Case Study
Yaolung J. Hsieh 1, National Chengchi University, Taiwan
ABSTRACT
Utilizing a longitudinal case study approach, we found that factors contributing to
the success of group insurance marketing included good use of resources, flexibility,
efficient information searching, and strategic orientation. We also found that the group
insurance marketing process of the company under study, in general, matched the
relationship marketing process. Furthermore, guanxi, a distinct feature of Chinese culture,
played a significant role in influencing the group insurance marketing performance in the
past ten years for the company. Although the importance of guanxi depends on the size of
the firms an insurance company is dealing with, its value should not be underestimated.
Trust normally comes before a business relationship is established and is reinforced
through superior after-sale services. Apart from providing theoretical and managerial
implications, we also present the study’s limitations and suggestions for future research.
Key words: group insurance marketing, relationship marketing, guanxi, trust, Taiwan
1
The author thanks Miss Z. L. Song and Miss Z. C. Cheng for their assistance.
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INTRODUCTION
Group insurance is beneficial for employers, employees, and insurance companies.
For employers, group insurance provides more risk pooling or premium averaging; for
insurance companies, the administration costs of group insurance are lower than those of
individual insurance; for employees and their families, group premiums are lower than
what they would have to pay for individual policies (Pauly et al., 1999), and they often
have more confidence in insurance companies selected by their employers. Group
insurance is designed so that employers can get widespread insurance coverage for their
employees at a reasonable cost, which also helps improve employee benefits and morale,
helping companies retain talented professionals (Yearian, 2003).
A review of the literature, however, indicates that research on group insurance
marketing is very limited. Except for a handful of trend studies and simple descriptive
studies conducted by the Life Insurance Marketing and Research Association (LIMRA),
academic research on group insurance marketing is scarce. Furthermore, studies on group
insurance marketing have been conducted mostly in Western countries. Because of the
increasing importance of Asia in the world economy and because of the benefits of group
insurance for employers, employees, and insurance companies, it is essential to explore
group insurance marketing in this region.
To fill the gap in the research, we adopt a case study approach to evaluate how one
successful insurance company in Taiwan markets its group insurance products and
services. A case study approach can capture reality in greater detail and allow the
researcher to investigate a contemporary phenomenon in its real-life context when
phenomenon and context cannot be separated (Yin, 2003). We assumed that a successful
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group insurance marketer would be capable of establishing its competitiveness through
effective marketing strategies—particularly relationship marketing strategies (to be
discussed below) in the services industries (Berry and Parasuraman, 1991; Ennew and
Waite, 2007; Grönroos 1995; Hsieh, 2004, 2009; Morgan and Hunt 1994). There are
important theoretical and practical implications to understanding how successful group
insurance marketers apply relationship marketing strategies. Consequently, the purposes
of this study were to examine how a particular Taiwanese life insurance firm succeeded
in group insurance marketing and how its strategies involved relationship marketing.
The rest of this paper is organized as follows. First, we review the relevant
literature and then introduce this study’s methodology. Next, we present the results
and discuss their theoretical and managerial implications. Finally, we consider this
study’s limitations and make suggestions for future research.
LITERATURE REVIEW
Given the broad benefits group insurance brings to all sides, its importance cannot
be overstated. However, since most group insurance policies are one-year contracts,
many group insurance underwriters face the challenge of renewing their contracts every
year. Employers typically look for ways to improve their current plan design, service
satisfaction, or insurance rates of their policies. To meet market competition, group
insurance rates continue to drop, sometimes even in cases where claims experiences have
been poor (Muncil, 2009). This is especially true in Taiwan. According to statistics from
the Taiwan Insurance Institute (2010), group life insurance premiums have been flat in
the past few years (see Table 1).
[Place Table 1 here]
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To succeed—or at the very least survive in such a competitive market—group
insurance markets have to find effective marketing strategies that help them identify
target markets, satisfy customer needs, and enhance customer relationships. However,
research into effective group insurance marketing is scarce. Given that group insurance
marketing involves services marketing and industrial marketing, and that the framework
of relationship marketing is more suitable in these fields (Berry and Parasuraman, 1991;
Ennew and Waite, 2007; Grönroos 1995; Hsieh, 2004, 2009; Morgan and Hunt 1994), we
discuss this framework as follows:
The Framework of Relationship Marketing
Unlike production, sales, or marketing orientations, partnering orientation or
relationship marketing drives the sales force to focus on long-term buyer and seller needs
and to build strong relationships with customers in order to create value for both parties
(Weitz and Bradford, 1999). This perspective is especially true for service offerings with
low economies of scale (Johnson and Selnes, 2004), for services that are complex and
delivered over a continuous stream of transactions (Berry, 1983; Levitt, 1983), and for
situations where many buyers are relatively unsophisticated regarding the service
(Ghingold and Maier, 1986), such as with insurance service (Crosby and Stephens, 1987).
Since customer relationships are so vital, but yet subject to change, it is important to
investigate the dynamic nature of customer relationships (Johnson and Selnes, 2004) and
the relationship marketing process (Eiriz and Wilson, 2006; Mitussis et al., 2006).
Mitussis and colleagues (2006) propose that one of the primary reasons why many
businesses fail to implement customer relationship management (CRM) is that they are
incapable of systematically engaging in what is known as “relationship processes.” Eiriz
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and Wilson (2006) also stress the importance of relationship processes, which include
relationship establishment, development, maintenance, and termination, in addition to
relationship rationale and structures.
In emphasizing the significance of developing a relationship with customers,
Peppers and colleagues (1999) propose four key steps for implementing a relationship
marketing program: identifying customers, differentiating between them, interacting with
them, and customizing products or services to fit each customer’s needs. Emphasizing the
dynamic nature of exchange relationships between buyers and sellers, Johnson and Selnes
(2004) propose a typology of exchange relationships, which consists of acquaintances,
friends, and partners. Parity products, differentiated products, and customized products
are delivered respectively to the three types of buyers with different levels of
relationships with sellers. Competitive advantage at the acquaintance level is gained by
delivering satisfaction and at the friendship level by delivering satisfaction plus trust.
Commitment is required, in addition to satisfaction and trust, to create competitive
advantage with customers at the partnership level.
In response to these proposals, this article presents a four-step framework of
relationship marketing for group insurance marketers (see Figure 1).
[Place Figure 1 here]
This long-term and partnering-oriented (Weitz and Bradford, 1999) framework
includes the investigation of after-sale services and takes into account the dynamic nature
(Johnson and Selnes, 2004) and the importance (Eiriz and Wilson, 2006; Mitussis et al.,
2006) of relationship processes.
We assumed that a successful insurance company would be capable of identifying,
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segmenting, and satisfying its target customers as well as maintaining and enhancing
relationships with them. Understanding how successful insurance companies apply
relationship marketing has important theoretical and pragmatic implications. We also
used the following research questions as guidelines to assist in the collection of data:
1. Why was the insurance company under study successful in group insurance
marketing?
2. How did the insurance company market its group insurance products and
services and how did this marketing process reflect relationship marketing?
METHODOLOGY
According to Yin (2003) and others (Merriam, 1998), the case study approach is
preferred when “how” and “why” questions are being posed, when the relevant behaviors
cannot be manipulated, and when the focus is on contemporary events. The current study
uses a case study methodology precisely because the goal is to examine a particular
insurance company’s real-life behaviors that cannot be manipulated and see how it
succeeded in Taiwan using relationship marketing.
As suggested by Yin (2003), the single-case study is an appropriate design under
five circumstances: first, when it provides a critical test of a well-formulated theory;
second, when it represents an extreme or unique case; third, when it is a representative or
typical case; fourth, when it is a revelatory case; fifth, when it is longitudinal. The
insurance company under study not only had been the group insurance market leader in
Taiwan for the past ten years, but also was perceived by consumers as the number one
insurance brand for 11 executive years (Lee and Din, 2010; Lin, 2010). Furthermore, we
had been studying this company since 2000. Consequently, it played the critical role of
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testing the theory of relationship marketing, was a unique case, was revelatory in nature,
and was longitudinal.
According to Yin’s (2003) framework, six sources of evidence are most commonly
used when carrying out case studies: documentation, archival records, interviews, direct
observations, participant observations, and physical artifacts. Since these sources of
evidence are complementary, and because a good case study includes as many sources as
possible, we collected all six types of evidence.
We interviewed eight managers in charge of group insurance marketing in this
company during three periods - 2000, 2004, and 2010. We approached the managers with
questions about the company’s successful marketing strategies and their marketing
processes. We also interviewed two employees in change of group insurance from the
company’s corporate customers. We approached the employees with questions about the
company’s service quality and their level of satisfaction.
Non-participant observations were used when we visited this company with students
(more than four times) and lectured for their sales force (more than 30 times) from 2000
to 2007. Participant observations were used when we looked at the company’s website for
group insurance products and services and subsequently asked related questions of the
business employees when we met in person. In March, 2010, we also invited the
company’s chief manager of group insurance marketing to deliver a three-hour lecture on
their group insurance marketing, which was recorded and transcribed. The chief manager
also answered several questions about its success in group insurance marketing during the
lecture. We collected other documentation, such as the guidelines of group insurance
marketing used as on-the-job training materials and other internal resources used to help
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the sales force communicate with customers. Archival records such as survey data
collected by print media Management Magazine, The Common Wealth, and Newsweek
Asia, were also gathered. Physical artifacts, such as the promotional materials and lists of
product categories, were also compared with data collected from the five other sources.
As suggested by Yin (2003) and others (Merriam, 1998), this paper documents the
research procedures (see Table 2) and develops a case study database to establish its
reliability. Furthermore, we collected evidence from a variety of sources and established a
chain of evidence to enhance construct validity. To verify its internal validity, pattern
matching and explanation building were carried out.
[Place Table 2 here]
FINDINGS
After analyzing all six types of data, we present our findings as follows, in the order
of the research questions proposed previously.
Factors Contributing to Success
Factors contributing to the success of the insurance company involve good use of
resources, flexibility, efficient information searching, and strategic orientation.
Good use of resources. The life insurance company under study belonged to a
financial holdings company and was able to make good use of resources under this
company. These resources helped the company gain the opportunity to meet key persons
in potential customer companies and close deals. Subsidiary organizations, such as a
hospital, a real estate firm, a bank, an investment company, a brokerage firm, and a
property and casualty company, became this insurance company’s reliable customers.
Through the help of these subsidiaries, the company found it easy to approach and close
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deals with customers. The current department manager of group insurance marketing
recounted the following experiences:
It took us more than five years to close the deal with the YD Company, who had
more than 50,000 employees. Following formal procedure, our group insurance
proposal was always turned down. After I took the position as group insurance
manager, I was determined to close the deal with this company and decided to make
some strategic changes. After several communications, the senior manager in our
bank was willing to help and he collaborated with the property and casualty
company and group insurance department to visit this company. Because our bank
gave loans to this company and we were one of its biggest shareholders, its senior
managers surely would see us. After further arrangements, I was able to see its
general manager and financial executive officer as well as some middle managers
and junior managers. In other words, we kind of reversed the process of meeting
their key persons. These contacts established our mutual trusts and we, of course,
were able to close the deal with this company without any difficulty.
I once visited a travel agency to discuss collaboration of travel insurance projects for
its customers. The boss had been bothered by backbone problems for a year, and I
happened to know a very good doctor in the hospital of our financial holdings.
Following my recommendation, he went to see the doctor. He recovered after two
visits and was very thankful. I asked him a favor for return, that is, to buy group
insurance policy from us. After a short period of time, he gave me a call and asked
for the contract because the deadline of his company’s current group insurance
policy is approaching.
It appeared to be common for employees in this company to share resources with
one another, especially when they had good guanxi (personal relationships). In the words
of one informant:
After a casual conversation with the boss of a small-sized firm around the airport, I
aroused his motivation to purchase group insurance. I passed this business
opportunity to a local agent as a return of favor because he took me to the
high-speed rail station and provided good services a while ago. After two visits, the
deal was closed and he made a handsome commission. (M, Senior Manger)
All the managers interviewed in the past ten years emphasized the importance of
guanxi when doing business with small-sized firms. These firms usually don’t require
bidding because of their size and lack of experts capable of conducting careful group
insurance analysis. Consequently, they often buy group insurance from those insurers that
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they keep good relationships with. Because small firms contributed greatly to this
insurance company’s profits, the company devoted a significant effort to accumulate this
form of social capital. The importance of guanxi, however, is not limited to small firms. A
local sales manager reported his opinions of guanxi and price as follows:
We classified our target markets in terms of the size of the company. If it is a
small-sized firm and we have good relationships, the price is not of concern. If it is a
medium-sized firm, both guanxi and price matter. If the firm has more than 1,000
employees, we, of course, need to have guanxi; nevertheless, the price is even more
important than guanxi. The rank of people in the company you know is the critical
factor to close a deal in group insurance marketing. The higher the rank of the
people you have relationships with, the better chance that you will succeed. My
marketing strategy is to identify the size of potential customers first, then look for
mutual friends who can introduce me to the potential customer. The higher the rank
of the person in the company introduced by this mutual friend, the better the chance
of success. Otherwise, I have to offer lower prices in order to close the deal. Guanxi
is very important in group insurance marketing.
To have qualified employees accumulate and exploit its resources, the company
relied upon on-the-job training facilities, in addition to attractive salaries and benefit
packages. The company had three educational centers located in northern, central, and
southern Taiwan – the biggest educational facilities among Taiwanese insurance firms.
We were able to access the physical facilities (including classrooms, dorms, and
recreational facilities) in these three centers the company’s headquarters when employees
were given on-the-job training. Furthermore, to improve its employees’ skills and
knowledge, the company provided intranet systems with online learning programs and
customer information searching services. The sales and on-the-job training performance
was evaluated periodically and linked to the company’s reward mechanism.
Because it was the largest life insurance company and carried a good reputation, the
size and the reputation of the company might be its best resources. Both informants from
big corporate customers and group insurance marketing managers interviewed
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emphasized the mutual benefits of doing business with one another. The following
excerpts from interviews with a senior insurance manager and a large customer revealed
the benefits of two big firms becoming business partners:
Senior insurance manager: When I walk on the street and see all those big names
become our customers, I have a sense of achievement. Similarly, those mangers in
the YD Company told me that they felt proud to do business with big insurance
companies like us.
Large customer: We not only are a big firm but also have good reputation. Therefore,
many insurance firms like to sell us insurance policies, even though they have to
lower their prices. They can brag about doing business with us and use us as a live
advertisement. It is a sense of mutual benefits. We, of course, like to buy insurance
from big firms with good reputations. We usually have fewer arguments when
making claims with big insurance companies. That is because we have mutual
understanding that both of us need to take responsibilities to maintain our reputation.
Flexibility. Our findings indicated that the major products provided to group
insurance customers changed very little during the past ten years. These products
involved three main categories: life insurance, health insurance, and accident insurance.
However, customized combinations of insurance policies were provided to customers
based on their needs. Insurance companies also provided Internet-based service to satisfy
customers’ needs. Furthermore, compared to individual insurance, the pricing strategy of
group insurance was more flexible. Apart from mortality rates, interest rates, and loading,
the pricing of group insurance also took into account factors such as the insurance records
of the target company, the products it sold, its size, and the contents of coverage. In
addition to 80 group insurance sales representatives, the company used more than 26,000
sales agents and other channels (i.e., brokers) to help find potential customers and satisfy
their needs. The company was also flexible in approaching key persons in target
companies, as revealed in previous section.
Efficient information searching. This insurance company appeared to have clear and
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efficient group insurance marketing guidelines for sales people. These guidelines were
gathered mainly from successful Japanese companies through a variety of channels, such
as company visits, invited speeches, collaboration projects, and so forth. The group
insurance marketing process of this company involved eight stages: (1) analyzing
markets; (2) searching for potential customers; (3) analyzing potential customers and
preparing materials; (4) writing proposals; (5) presenting proposals and analyzing
competitors; (6) earning the trust of potential customers (especially the key man); (7)
closing deals and signing contracts; and (8) providing after-sale services (to be discussed
below).
Because all the employees in group insurance marketing relied on guanxi, they were
able to dig out true and useful information through communication with key people. To
avoid making the other party to lose face, Taiwanese are often reluctant to reject other
people’s offers in person or to reveal the true cause of turning down a business proposal.
Only those who have guanxi with key persons within target organizations can explore the
real causes for purchasing or not purchasing an insurance policy. Being able to collect
this critical information helped the company overcome potential obstacles and close deals,
which eventually contributed to its successful marketing performance.
Strategic orientation. There has been a clear purpose of group insurance marketing
in the past ten years – to help identify the target market for worksite marketing.
Consequently, making profits was not of primary concern to the group insurance
department. The key performance index used for the group insurance department
included performance by the group insurance department, such as group insurance sales
volume and level of satisfaction; the index also included performance measures such as
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insurance sales volume by sales reps who were involved in worksite marketing, which
was related to group insurance. With this purpose in mind, the group insurance marketing
department worked hand-in-hand with those sales reps who were involved in worksite
marketing for the past 10 years. For example, the group insurance department hired a
Japanese manager in order to develop Japanese worksite markets in Taiwan. In the words
of one informant:
I have a Japanese manger in my department, and he is very useful in developing
Japanese customers in Taiwan. The strength of this Japanese manger is that he
shares a lot of interests with potential Japanese customers. They can chat with each
other and enjoy their conversation. This process builds trust with customers and it is
very easy to sell the policies after trust has been established. (M, Senior Manager)
This company also paid close attention to external influences, such as the rise of
labor costs in Taiwan and the moving out of Taiwanese small- and medium-sized firms to
Mainland China and southeast Asian countries. To follow this market trend, the company
established its subsidiaries in these countries and used group insurance marketing as a
cornerstone to enhance worksite marketing performance.
Given that reputation is a big strength in attracting and developing relationships with
customers, the company was willing to sacrifice short-term profits to maintain its
reputation. A senior manager recounted his experience as follows:
I encountered an awful experience last year when dealing with a dentist case. Given
that dentists are low risk customers, we are happy to have them as our customers.
When we signed contracts with the hospital, however, it was beyond our belief that a
dentist, in addition to the hospital that he belongs to, can join other groups, such as
dentist association, to enjoy the benefits of group insurance. We ignored the fact that,
apart from NT$ 7 million insured under the hospital, this dentist was also insured
NT$ 6 million under the dentist association. Three months after he was covered by
our group insurance policy, he was dead. The claim department in our company
argued that we should cancel the policy because they did not tell us the whole truth.
Nevertheless, my view is that group insurance is different from individual insurance.
Individual insurance can control each individual’s risk, but group insurance has to
assume the risks from former insurers. To maintain our reputation, we eventually
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paid the claim of NT$ 13 million. We, of course, intended to persuade them to
improve their structure and lower the coverage for each dentist when renewing the
policy.
Marketing Strategies
The group insurance marketing process adopted by this company, in general,
matched the framework of relationship marketing. A comparison of this company’s
marketing process to the framework of relationship marketing is presented in Table 3.
[Place Table 3 here]
It’s clear that, through good use of its resources, flexibility, efficient information
searching, and strategic orientation, the insurance company was able to identify suitable
and profitable target markets, satisfy their needs and preferences, and maintain and
enhance customer relationships.
According to the theory of relationship marketing, not all customers are good
customers. Consequently, it may come to a point where a company has to decide which
customer relationship to terminate. Our data revealed that both premium and claim
experience were taken into account when deciding which customer relationship to be
terminated. This company normally gave up customers who did not want to pay
reasonable premiums and customers who had poor claim experiences (i.e., they were
risky or the claims were too expensive).
Because of this marketing process, the company established good reputation among
its (potential) customers, and this reputation emphasized further the importance of
after-sale services.
Claim services, without a doubt, are the most important after-sale service in the
insurance industry. The dentist case discussed previously is a good demonstration of how
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the company cared about after-sale services. Its customers also reported their satisfaction
with the company. One customer recounted her experience as follows:
According to my experiences in the past few years, the insurance company provides
efficient claim services. Furthermore, the insurance company offers on-site sales
reps to take care of claim issues and to respond to other problems that our
employees encounter. (F, 58, large-sized firm)
However, individual sales reps sometimes made mistakes because they considered
their personal benefits when providing claim services. The following case provided by a
senior manager demonstrates the importance of on-the-job training in educating sales
reps to be customer-oriented:
Some sales reps perceive giving claims to beneficiaries as an opportunity for
individual insurance sales. For instance, some employees of our group insurance
customers died last year when they were on duty. After the claims were approved by
our claims department, our sales rep thought this was a good opportunity to sell
individual insurance, therefore he gave the claims to beneficiaries without informing
their personnel manager. This was not right. The personnel manager of this
corporate customer was hoping that our sales rep could accompany him to give the
claims to beneficiaries. This case indicates that there is still room for improvement
when it comes to teaching our sales reps what customer orientation is.
Investigation of these factors contributing to the company’s success indicated that to
carry out group insurance marketing process or relationship marketing, the company also
relied upon internal marketing and marketing mix, as well as periodical evaluation and
control.
Internal marketing is defined as “attracting, developing, motivating, and retaining
qualified employees through job-products that satisfy their needs,” (Berry and
Parasuraman, 1991, p. 151) and it appeared to be critical for the implementation of
relationship marketing and for the success of this company. Internal marketing involved
recruiting appropriate sales people with attractive salaries, providing effective on-the-job
training and benefit packages, and employing an efficient performance-evaluation index.
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Customized marketing mixes helped the company successfully carry out its group
insurance marketing strategies. For instance, the company successfully used customized
products and pricing; flexible communication skills in approaching target markets or
closing deals; and multiple channels that helped to explore target markets and satisfy their
needs.
Periodical evaluation and control ensured the company overcame potential obstacles
and boosted morale in a timely manner. For instance, the new department manager of
group insurance quickly realized the problem of reaching key people in YD Company,
and effective solutions were proposed to close the deal.
According to the data, we revised the framework of relationship marketing for group
insurance marketers, as seen in Figure 2.
[Place Figure 2 here]
DISCUSSION
Utilizing a longitudinal case study approach, we found that factors contributing to
the success of group insurance marketing included good use of resources, flexibility,
efficient information searching, and strategic orientation. We also found that the group
insurance marketing process of the company under study, in general, matched the
relationship marketing process. Furthermore, guanxi, a distinct feature of Chinese culture,
played a significant role in influencing the group insurance marketing performance in the
past ten years for the company. Although the importance of guanxi depends on the size of
the firms an insurance company is dealing with, its value should not be underestimated.
Trust normally comes before a business relationship is established and is reinforced
through superior after-sale services (Hsieh, 2009).
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Since case studies, like experiments, can be generalized to theoretical propositions
but not to populations or universes (Yin, 2003), we discuss both theoretical and
managerial implications of this particular study and make suggestions below.
Theoretical Implications
Given that there was a lack of literature in the field of group insurance marketing,
we relied upon relationship marketing literature to propose our research framework. The
literature of relationship marketing indicated that strong relationships with customers
(Weitz and Bradford, 1999) and a well-executed relationship marketing process (Eiriz
and Wilson, 2006; Mitussis et al., 2006) are essential to success in the services industries
in general and in the insurance industry in particular. Furthermore, since customer
relationships are important, but sometimes unstable, it is important to investigate the
dynamic nature of customer relationships (Johnson and Selnes, 2004).
We were able to examine the dynamic nature of the case company’s relationships
with its customers through a longitudinal study. We found that the level of relationships
of the case company with customers—according to the typology of exchange
relationships proposed by Johnson and Selnes (2004)—was like that between friends and
partners. It delivered customized products to its customers and built its competitive
advantage through delivering satisfaction plus trust, and worked hard toward the
partnership level, which requires commitment.
Our findings also echoed arguments that strong relationships with customers (Weitz
and Bradford, 1999) and a well-executed relationship marketing process (Eiriz and
Wilson, 2006; Mitussis et al., 2006) are essential if an insurance company is to succeed in
group insurance marketing. Furthermore, internal marketing, marketing mix, and periodic
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evaluation and control are critical in relationship marketing.
Our primary contribution is that we compared the factors that contributed to our case
company’s success with the relationship marketing literature and proposed an integrated
framework of group insurance marketing. This framework is more theoretically sound
than any other framework in the literature and more pragmatically implementable (to be
discussed below). However, given that the findings of a single-case study cannot be
generalized to other populations or universes, further investigation of the relationships
between variables within the framework is encouraged.
Managerial Implications
Although not every insurance company has as many resources or is as capable of
employing marketing strategies as the case company, the factors that contribute to the
success of group insurance marketing still offer important implications for other
insurance companies. For example, strategic orientation requires an insurance company
pay close attention to external influences and maintain strong long-term relationships
with profitable customers. Strategic orientation also helps it identify qualified personnel
and critical information about customers, at the same time providing efficient approaches
to collect this type of information, which are essential for successful implementation of
group insurance marketing. Successful group insurance marketing requires the effective
use of resources, no matter how many or few resources an insurance company has.
Flexibility is critical in conducting business in China or Taiwan (Hsieh, 2004) and
enables an insurance company to adjust its strategies and methods of communication in a
timely manner.
The case company has been successful in the past ten years; however, it needs an
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integrated framework like the one proposed in this study to enhance its marketing
performance. For instance, the mistakes of sales reps who provided claims to
beneficiaries may hinder the case company’s relationships with customers and its
marketing performance. However, following the framework of group insurance
marketing can reduce these problems.
The framework starts with an inspection of external factors that may influence a
company’s group insurance marketing. For instance, by following market trends, the case
company was able to identify its targets in Taiwan as well as in Mainland China and
southeast Asian countries. Then relationship marketing can be carried out. To enhance the
effectiveness of the relationship marketing process, an insurance company needs to have
well-executed internal marketing and customized marketing mixes. Furthermore, to
detect mistakes in a timely manner and to implement immediate adjustment, an insurance
firm needs periodical evaluation and control, as well as instant feedback.
Limitations and Suggestions
Because of the weakness of a single-case study in generalizing its findings to
populations or universes, we encourage a multiple-case study to be conducted. A second
case company with a comparable market share or a similar customer base, or a third one
with poor performance in group insurance marketing can provide further evidence to
improve the framework.
The corporate customer informants that we interviewed were mainly from large
firms. Given that firms with different sizes may demonstrate different purchasing
behaviors, it is necessary to explore perspectives of small firms and medium firms if we
are to have fuller evidence to support our framework.
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Our data were also limited to Taiwan. Given the rise of China’s economy and the
opportunity it brings, it is valuable to explore the perspectives of group insurance
customers in China and the marketing strategy used to create, maintain, and enhance
relationships with them.
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Table 1. Group Insurance Premium in Taiwan
Year/Month
Group Insurance Premium
2000
15,765
2001
18,194
2002
20,189
2003
21,948
2004
22,425
2005
23,477
2006
22,503
2007
22,689
2008
21,217
2009/1-10
16,327
Unit: NT$ Million; US$ 1 = NT$ 32
Source: Taiwan Insurance Institute
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Identifying the
target market
Segmenting target
customers and
analyzing their needs
Satisfying
customers
Maintaining,
enhancing, and
terminating
customer
relationships
Figure 1. Relationship Marketing Framework
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Table 2. Research Procedures of Current Study
 Conducted literature review on group insurance marketing and relationship marketing
 Proposed research questions
 Conducted participant and non-participant observations
 Acquired documentation, physical artifacts, and archive records
 Proposed interview questions and conducted in-depth interviews
 Invited a three hour lecture regarding group insurance marketing
 Analyzed and compared data
 Wrote the paper
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Table 3. A Comparison of the GI Marketing Process and the Framework of RM
The GI Marketing Process
The Framework of RM
1. Analyzing markets
Identifying the target market
2. Searching for potential customers
Identifying the target market
3. Analyzing potential customers
Segmenting target customers and analyzing
and preparing materials
their needs
4. Writing proposals
Satisfying (potential) customers
5. Presenting proposals and
Satisfying (potential) customers
analyzing competitors
6. Earning the trust of potential
Satisfying (potential) customers
customers (especially the key man)
7. Closing deals and signing contracts
Satisfying (potential) customers
8. Providing after-sale services
Maintaining, enhancing, and terminating
customer relationships
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Environmental Influence
Feedback
Internal Marketing
Identifying the
target market
Segmenting target customers
and analyzing their needs
and preferences
Feedback
Marketing Mix
Satisfying customers
Maintaining, enhancing, and
terminating customer relationship
Evaluation
and control
Figure 2. Framework of Group Insurance Marketing
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