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Comparing the efficiency of direct and indirect channels in insurance marketing using DEA technique

Number of pages: 87 File Format: word File Code: 31303
Year: 2013 University Degree: Master's degree Category: Management
Tags/Keywords: Business management - Data envelopment analysis - DEA technique - Direct channels - Distribution channels - Economic development - insurance - Insurance management - Insurance marketing - Marketing - Performance evaluation
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  • Summary of Comparing the efficiency of direct and indirect channels in insurance marketing using DEA technique

    Dissertation for obtaining a master's degree in the field: Business Administration, Major: Insurance

    Abstract

    Insurance industry as a service sector has a compensatory and protective role in the economy of any country, so that the successful operation of this industry creates motivation and stimulus for other industries and the development of that economy, so in order to achieve this in any economy, insurance companies, like any other company, must have a strong and successful performance in fulfilling their mission. Have their own goals and strategies. The expansion of the distribution and supply of insurance services and its impact on the marketing activity and success of companies has caused special attention to be paid to the marketing mix element.

    What is important in the marketing of insurance services is to pay attention to the fact that different products will require different approaches to offer according to their diverse applications. direct marketing).

    Therefore, the research is done in three steps. In the first step, two types of insurance service distribution channels called direct channel (sales representatives) - Iran Insurance Company - and indirect channel (insurance bank) - Parsian Insurance Bank - are selected in order to answer the main question of the research. In the second step, data envelopment analysis (DEA) technique is used to compare efficiency. In this way, the efficiency of distribution of insurance services by Iran Insurance Company and Parsian Insurance Bank is investigated separately using DEA technique. In the last stage of the research, the results obtained from the performance of each of the distribution channels are compared with each other and the final conclusion is presented.

    In general, the research results show that: direct marketing is more effective than indirect marketing, according to which direct marketing is now the most successful type of marketing.

    Key words: distribution channels, performance evaluation, insurance bank, insurance agencies, data coverage analysis

    1 Introduction

    In today's world, where the economic growth and development of any country determines its international status, in order to have a say in the international arena, countries try to improve their development indicators and in this way, in the cycle of improving the economic situation and of course increasing their effective role, strengthen the economy and play an influential role on the world stage. The insurance industry is one of the indicators of development, on the one hand, as one of the most important economic institutions, and on the other hand, it supports the activities of other institutions (www. Centinsur. ir).

    On the other hand, with the advancement of technology, especially information technology, customers are able to obtain more extensive information about the quality of their desired products and services. In the global market, companies' competition with each other has become much more complicated and intensive than in the past. Customers have gained more power in choosing their desired products and services and have gained the right to choose in the real sense. The issue of competition in all industries and services has common features. In other words, in a fully competitive market, a company is successful that has an acceptable profit by reducing administrative and overhead costs on the one hand and improving the quality of products and improving service delivery on the other hand. However, in insurance, unlike other industries, the product that is sold is not tangible, and the majority of policyholders do not benefit from other services because they do not face any damage (except for peace of mind and relief of worry). While in other industries, in addition to the sale of a physical product, services are also provided during the period of using the product, and all buyers have the opportunity to judge the quality of the company's product and how to provide its services. Therefore, competition in insurance is more complicated and has more nuances. Therefore, competition is an accepted necessity in the insurance industry and guarantees the survival and development of this industry. The creation of this competition can be investigated in different fields and from different dimensions, which depends on the conditions and atmosphere governing the insurance market of each country. 1-2 statement of the main problem of the research.The term distribution, in simple language, means providing the desired service to the customer at the desired time to the desired place. Therefore, most companies form a distribution channel to supply their services to the market through marketing and sales intermediaries, which is also called a commercial channel (Aamili, 2011). What is important in the marketing of insurance services is to pay attention to the fact that different products will require different approaches for presentation according to their diverse applications (Keh et al, 2006). One of the most significant changes in the field of financial services distribution over the past years has been the emergence and expansion of the insurance bank phenomenon. Banking institutions and insurance companies consider the insurance bank as a complementary and often profitable part of their activities. The success expressed by the activities of the insurance bank has attracted the attention of the financial services sector as one of the distribution channels (Brockett et al, 2005).

    Most insurance companies believe that increasing the number of marketing channels to attract more customers and higher sales is a way to be more profitable. In addition, insurance companies use good sales representatives to sell products through banks. Insurance bank is one of the marketing channels of insurers to sell insurance (Chiang et al, 2009). In other words, when insurance companies sell insurance through their agents, this process is referred to as direct marketing. When they sell insurance through the insurance bank, indirect marketing takes place (Parsamanesh, 2019). Today, insurance companies have more achievements in the field of marketing through banks. Personal insurance agents are facing problems in terms of using traditional systems because the cost of competition has reduced the profit margins and increased the demand for rewards from agents. For example, over the past decade, life insurance agents have sold fewer and more valuable insurance policies to affluent customers. Middle-income customers who form the main body of banking customers pay little attention to themselves from insurance agents. By investing in bank relationships, insurance companies gain a significant part of this underserved market (Aamili, 2011). Another advantage of banks compared to the traditional distribution channel is the lower cost of sales, which is created by their significant and loyal customer base. Banks also benefit from the recognition of the brand in their geographical area, which creates lower sales costs compared to paper, radio and television advertisements (Thomas, 2007). Therefore, the current research seeks to find an answer to the main question of the research, whether insurers are more efficient in selling insurance products through the insurance bank channel (indirect marketing channel) or through the sales representatives channel (direct marketing channel)?

    1-3 Importance and Necessity of Research

    Today, one of the reasons for banks to enter the insurance industry is that: fierce competition among banks against the reduction of profit margin has led to an increase in administration and marketing costs and limited profit margin of traditional bank products. However, new products can significantly increase profitability and productivity.

    Nowadays, banking institutions and insurance companies consider bank insurance as a complementary and often profitable part of their activities.

    One of the most important reasons for paying attention to bank insurance by banks is the increased return on assets (ROA). One of the best ways to increase assuming an asset portfolio is through fee income. Banks that generate income from fees can cover more than their operating costs, and one way to generate income from fees is to sell insurance products. Banks that effectively sell financial services can strengthen their distribution and processing capabilities in order to achieve profitable operating cost ratios.

  • Contents & References of Comparing the efficiency of direct and indirect channels in insurance marketing using DEA technique

    List:

    Abstract 1

    Chapter 1 General Research

    1-1 Introduction. 3

    1-2 stating the main problem of the research. 3

    1-3 The importance and necessity of research. 5

    1-4 research objectives. 5

    1-5 theoretical framework of the research. 5

    1-6 Identification of research variables. 7

    1-7 research questions. 9

    1-7-1 The main research question. 9

    1-7-2 research sub-questions. 9

    1-8 research methods. 9

    1-9 statistical population. 10

    1-10 statistical samples. 11

    1-11 information gathering method. 11

    1-12 information analysis method. 11

    1-13 research area. 11

    Chapter Two Research Background

    2-1 Introduction. 12

    2-2 History of insurance in Iran. 13

    2-3 insurance marketing. 15

    2-4 insurance marketing channels. 16

    2-4-1 sales representatives (direct channel) 19

    2-4-2 insurance banks (indirect channel) 20

    2-4-2-1 reasons for banks to enter the insurance field. 22

    2-5 research conducted in the field of performance evaluation in the insurance industry. 24

    2-5-1 Research conducted inside the country. 25

    2-5-2 Research conducted abroad. 26

    2-5-3 Research conducted to check the efficiency of insurance companies using DEA technique. 29

    Chapter 3 Research Methodology

    3-1 Introduction. 35

    3-2 An overview of performance evaluation models in insurance companies. 35

    3-3 data envelopment analysis 37

    3-4 concept of virtual unit in data envelopment analysis technique 38

    3-5 shortcomings and capabilities of data envelopment analysis technique 38

    3-6 main models of data envelopment analysis 40

    3-6-1 CCR model. 41

    3-6-2 BCC model. 42

    3-6-3 The difference between the CCR model and the BCC model. 44

    3-7 research methodology. 44

    3-7-1 Research implementation process. 44

    3-8 History of Parsian Insurance Bank. 46

    3-9 Iran's insurance history. 47

    3-10 Data collection 48

    Chapter four of the research implementation process

    4-1 Introduction. 54

    4-2 Solving the model. 54

    4-3 Identification of model units and reasons for inefficiency of inefficient months in Iranian insurance. 58

    4-4 Identification of model units and reasons for the inefficiency of the inefficient months in Parsian Insurance Bank. 63

    Chapter Five Conclusions and Proposals

    5-1 Introduction. 70

    5-2 discussion and conclusion. 70

    3-5 research suggestions. 73

    5-3-1 Executive proposals. 73

    3-5-2 Suggestions for future research. 73

    Sources and sources. 75

     

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Comparing the efficiency of direct and indirect channels in insurance marketing using DEA technique
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