“Exploring the Difference

between Stayers and

Switchers as Corporate
Customers for Life Insurance
Companies in Sindh”
Researchers:
Falah-ud-Din Butt,
Niaz Ahmed Bhutto &
Ghulam Abbas
1) STAYERS:
The first time adopters.

2) SWITCHERS:

i) SATISFIED SWITCHERS:
Corporate customers who switched in for any
reason other than dissatisfaction from the
previous life insurance company.

ii) DISSATISFIED SWITCHERS:

Corporate customers who switched in due to
dissatisfaction from the previous life insurance
company.
 OBJECTIVES OF THE STUDY
• To examine whether the three groups differ in
their overall satisfaction with the service provided
by their existing/current life insurance company.

• To investigate the role of satisfaction with the

various attributes of the service in differentiating
among the groups.

• To examine whether the three groups differ in

their loyalty behavior toward the service.
 PROBLEM STATEMENT

To find the difference between Stayers and

Switchers as corporate customers in relation
to satisfaction and loyalty towards the
service provided by the existing/current life
insurance company in Sindh?
 RESEARCH METHODOLOGY

ANOVA
AND Selected Sample
MULTIPLE DISCRIMINANT
ANALYSIS Stayers, 25
Dissatisfied
Switchers, 25

CONVENIENCE Satisfied
Switchers, 25
SAMPLING
 REVIEW OF LITERATURE
• A number of studies have shown that
Switchers base their satisfaction
judgments on different factors than
Stayers (Mittal and Katrichis, 2000), that
overall satisfaction and loyalty differ
among the two groups (Ganesh et al.,
2000) and that satisfaction has a stronger
effect on the duration of the customer
relationship for long-term customers than
for recent recruits (Bolton, 1998)
 REVIEW OF LITERATURE

• The loyalty of the customers is

multidimensional and includes not only repeat
buying behavior, but also other aspects that
are geared towards the support of a provider,
such as repurchasing or resistance towards
price increases (Dick and Basu, 1994).
• In light of mature markets and increasing
competitive pressure, retaining the existing
customer base becomes crucial for the future
success of a firm (Boehm, 2008).
 THE VARIABLES
Customer Satisfaction
1. Professionalism
2. Prompt Payments
3. Premium
4. Commission

Customer Loyalty
1. Recommendation
2. Future Intention to Switch
3. Raised Prices
4. Competitive Rates
 DATA ANALYSIS AND RESULTS
H1: Dissatisfied Switchers are more satisfied with their
existing/current life insurance company in comparison to Satisfied
Switchers and Stayers.

H2: Satisfied Switchers are less satisfied with their

existing/current life insurance company in comparison to Stayers.

Overall Satisfaction Measure: Difference between Group Means

Measure Groups Mean Scores Difference b/w Means*
Stayers versus Satisfied
Stayers
4.2400 Switchers
Overall, how (n = 25)
0.3200
much satisfied
Satisfied Stayers versus Dissatisfied
your firm is with
Switchers 3.9200 Switchers
the current life
(n = 25) - 0.2800
Insurance
company? Dissatisfied Satisfied Switchers versus
Switchers 4.5200 Dissatisfied Switchers
(n = 25) - 0.6000
* The difference between group means were significant at the p = 0.05 level.
H3: Satisfaction with the people factor of the service is
stronger discriminant of the three groups of customers
than satisfaction with the other aspects of the service.

Wilkas’ λ (U-statistic) and Univariate F ratio

with 2 and 72 degrees of freedom.

Wilks' F df1 df2 Sig.

Lambda
Profess. .659 18.592 2 72 .000
Pmpt.Pmt .924 2.975 2 72 .057
Premium .859 5.919 2 72 .004
Comm .961 1.474 2 72 .236
Recomd .975 .925 2 72 .401
F. Switch .957 1.625 2 72 .204
Price .855 6.123 2 72 .004
C. Rates .860 5.860 2 72 .004
 H4: Dissatisfied Switchers are more loyal to their
existing/current life insurance company in comparison to
both Satisfied Switchers and Stayers.

H5: Satisfied Switchers are less loyal to their existing/current

life insurance company in comparison to Stayers.

GROUP MEANS
Group Profess Pmpt. Prem Comm Recomd F.Swh Price. C.
Pmt Rates

Stayers 4.0800 4.0400 4.2400 3.4800 4.2000 4.1200 3.5200 4.3200

Satisfied 3.5200 3.8400 3.9600 3.3600 4.0400 4.0400 2.8800 3.8400

Switchers
Dissatisfied 4.5200 4.2800 4.4400 3.7200 4.3200 4.3200 3.8400 4.4400
Switchers

Total 4.0400 4.0533 4.2133 3.5200 4.1867 4.1600 3.4133 4.2000

Standardized Canonical Discriminant Function
Coefficients

Function Function
1 2

Professional Employees .899 .064

Prompt Payments -.343 .573

Premium .211 .226

Commission -.058 .287

Recommendation -.169 -.268

Future intention to Switch -.131 .624

Raised Prices .437 -.321

Competitive Rates .507 -.748

 CONCLUSION
• Dissatisfied Switchers are more satisfied than the other two groups.

• Satisfied Switchers are significantly less satisfied than the Stayers.

• Hypotheses 1 and 2 are accepted very strongly as the difference

between groups are significant at the p = 0.05 level.

• professionalism is the variable that strongly discriminating the three

groups, and strongly supporting H3.

• Dissatisfied Switchers are exhibiting stronger commitment than Stayers

and Satisfied Switchers. strongly supporting H4

• Satisfied Switchers are less loyal to their current life insurance company
in comparison to Stayers strongly supporting H5..
RECOMMENDATIONS
• The insurance companies should treat these groups
differently with regard to potential investment strategy.

• Prime focus should be on professional employees rather

than other aspects of satisfaction.

• Insurance companies should invest in training and

development of employees. Specifically in front line
employees.

• Insurance companies should avoid over investment and

heavy dependency on Dissatisfied Switchers.
RECOMMENDATIONS

• The insurance companies should treat these groups

differently with regard to potential investment strategy.

• Should more focus on professionalism rather than other

aspects of satisfaction.

• Should invest more in training and development of

employees. Specifically in front line employees.

• Insurance companies should avoid over investment and

heavy dependency on Satisfied Switchers.
Future Research Directions

• These results are confined to the life insurance industry only,

and further research is needed to validate and generalize
these results to broader settings.

• However despite this caveat, the study findings could be

generalized to services that share some common
characteristics with the life insurance industry like: Legal
services, accounting, banking, leasing services share
some of these traits with life insurance industry.

• Similar research is required in above said industries to

validate the results of Insurance Industry.