IDEAS home Printed from https://ideas.repec.org/a/bla/jrinsu/v90y2023i2p487-519.html
   My bibliography  Save this article

How does the insurer's mobile application sales strategy perform?

Author

Listed:
  • An Chen
  • Yusha Chen
  • Finbarr Murphy
  • Wei Xu
  • Xian Xu

Abstract

While the impact of an Internet‐based sales strategy on sales performance has been well studied, there is little academic research that examines the impact of a mobile application (MA) sales strategy on the sales performance of insurers. Using a unique data set for term life insurance policies from a Chinese life insurer, we study the impact of implementing this strategy on insurance purchases. We find a significant growth in the insurance purchase quantity and somewhat lower growth in premiums received from new policies. This paper determines that this is due to improved channel accessibility and the cost reduction of the MA channel. Although sales of traditional distribution channels are cannibalized in the short term by the MA distribution strategy, this substitution effect does not persist in the long run. In addition, we find that this strategy reduces impulsive purchases.

Suggested Citation

  • An Chen & Yusha Chen & Finbarr Murphy & Wei Xu & Xian Xu, 2023. "How does the insurer's mobile application sales strategy perform?," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 90(2), pages 487-519, June.
    • Handle: RePEc:bla:jrinsu:v:90:y:2023:i:2:p:487-519
    DOI: 10.1111/jori.12424
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/jori.12424
    Download Restriction: no
    File URL: https://libkey.io/10.1111/jori.12424?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Benlagha, Noureddine & Hemrit, Wael, 2020. "Internet use and insurance growth: evidence from a panel of OECD countries," Technology in Society, Elsevier, vol. 62(C).
    2. Jeffrey R. Brown & Austan Goolsbee, 2002. "Does the Internet Make Markets More Competitive? Evidence from the Life Insurance Industry," Journal of Political Economy, University of Chicago Press, vol. 110(3), pages 481-507, June.
    3. Xi Lin & Aaron Bruhn & Jananie William, 2019. "Extending financial literacy to insurance literacy: a survey approach," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 59(S1), pages 685-713, April.
    4. Hu, Yu Jeffrey & Tang, Zhulei, 2014. "The impact of sales tax on internet and catalog sales: Evidence from a natural experiment," International Journal of Industrial Organization, Elsevier, vol. 32(C), pages 84-90.
    5. Hanming Fang & Edward Kung, 2021. "Why do life insurance policyholders lapse? The roles of income, health, and bequest motive shocks," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 88(4), pages 937-970, December.
    6. Kevin L. Eastman & Jacqueline K. Eastman & Alan D. Eastman, 2002. "Issues in Marketing Online Insurance Products: An Exploratory Look at Agents’ Use, Attitudes, and Views of the Impact of the Internet," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 5(2), pages 117-134, September.
    7. Simon Fritzsch & Philipp Scharner & Gregor Weiß, 2021. "Estimating the relation between digitalization and the market value of insurers," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 88(3), pages 529-567, September.
    8. Stahl, Dale O, II, 1989. "Oligopolistic Pricing with Sequential Consumer Search," American Economic Review, American Economic Association, vol. 79(4), pages 700-712, September.
    9. Donghui Li & Fariborz Moshirian & Pascal Nguyen & Timothy Wee, 2007. "The Demand for Life Insurance in OECD Countries," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 74(3), pages 637-652, September.
    10. James R. Garven, 2002. "On the Implications of the Internet for Insurance Markets and Institutions," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 5(2), pages 105-116, September.
    11. Deleersnyder, B. & Geyskens, I. & Gielens, K.J.P. & Dekimpe, M.G., 2002. "How cannibalistic is the internet channel? A study of the newspaper industry in the United Kingdom and the Netherlands," Other publications TiSEM 16dcb25c-7ea9-4c75-bdf6-5, Tilburg University, School of Economics and Management.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martin Eling & Davide Nuessle & Julian Staubli, 2022. "The impact of artificial intelligence along the insurance value chain and on the insurability of risks," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 47(2), pages 205-241, April.
    2. Gebhardt, Georg, 2018. "Measuring the competitive impact of the internet: Evidence from a natural experiment in broadband access," International Journal of Industrial Organization, Elsevier, vol. 57(C), pages 84-113.
    3. Xiao Hu & Zhengjie Wang & Jun Liu, 2022. "The impact of digital finance on household insurance purchases: evidence from micro data in China," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 47(3), pages 538-568, July.
    4. Edgardo Arturo Ayala Gaytán, 2009. "Social network externalities and price dispersion in online markets," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(2), pages 1-28, November.
    5. Michael R. Baye & John Morgan & Patrick Scholten, 2004. "Price Dispersion In The Small And In The Large: Evidence From An Internet Price Comparison Site," Journal of Industrial Economics, Wiley Blackwell, vol. 52(4), pages 463-496, December.
    6. Aparajita Goyal, 2010. "Information, Direct Access to Farmers, and Rural Market Performance in Central India," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 22-45, July.
    7. Michael D. Noel & Hongjie Qiang, 2023. "Missing Price Information and Its Impact on Equilibrium Price Dispersion: Evidence From Gasoline Signboards," Journal of Industrial Economics, Wiley Blackwell, vol. 71(3), pages 814-854, September.
    8. Atabek Atayev & Maarten Janssen, 2024. "Information Acquisition And Diffusion In Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 65(2), pages 729-753, May.
    9. Stephen McDonald & Colin Wren, 2017. "Consumer Search Ability, Price Dispersion and the Digital Divide," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 79(2), pages 234-250, April.
    10. Noel, Michael D. & Qiang, Hongjie, 2019. "The role of information in retail gasoline price dispersion," Energy Economics, Elsevier, vol. 80(C), pages 173-187.
    11. Bernd Jost, 2012. "Price Dispersion, Search Costs and Spatial Competition: Evidence from the Austrian Retail Gasoline Market," NEURUS papers neurusp166, NEURUS - Network of European and US Regional and Urban Studies.
    12. Ruth G. Gilgenbach, 2015. "Can a decline in search cost increase prices?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 48(4), pages 1381-1402, November.
    13. Janssen, Aljoscha & Kasinger, Johannes, 2021. "Obfuscation and rational inattention in digitalized markets," SAFE Working Paper Series 306, Leibniz Institute for Financial Research SAFE.
    14. Michael R. Baye & J. Rupert J. Gatti & Paul Kattuman & John Morgan, 2009. "Clicks, Discontinuities, and Firm Demand Online," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(4), pages 935-975, December.
    15. Jonneke Bolhaar & Bas van der Klaauw & Maarten Lindeboom, 2010. "Insurance Search and Switching Behavior," Tinbergen Institute Discussion Papers 10-072/3, Tinbergen Institute.
    16. Itai Ater & Oren Rigbi, 2018. "The Effects of Mandatory Disclosure of Supermarket Prices," CESifo Working Paper Series 6942, CESifo.
    17. Moraga-González, José Luis & Wildenbeest, Matthijs R., 2008. "Maximum likelihood estimation of search costs," European Economic Review, Elsevier, vol. 52(5), pages 820-848, July.
    18. Monica Giulietti & Jesus Otero & Michael Waterson, 2010. "Pricing behaviour under competition in the UK electricity supply industry," Oxford Economic Papers, Oxford University Press, vol. 62(3), pages 478-503, July.
    19. Watanabe, Makoto, 2008. "Inflation, price competition, and consumer search technology," Journal of Economic Dynamics and Control, Elsevier, vol. 32(12), pages 3780-3806, December.
    20. Chris M. Wilson & Sandro Shelegia, 2016. "A Generalized Model of Sales," Working Papers 934, Barcelona School of Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jrinsu:v:90:y:2023:i:2:p:487-519. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/ariaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.