Antecedents of word-of-mouth communication in the life insurance industry

Abstract

PurposeThis study explored the antecedents and mediators of word-of-mouth (WOM) behavior in the life insurance industry and investigated how to increase policyholders' positive WOM communication.Design/methodology/approachA sample of life insurance policyholders in Taiwan is surveyed. These respondents were chosen using purposive sampling. The author sent out 650 questionnaires to customers of the top six life insurance firms in Taiwan in proportion to each firm's market share as follows: Cathay (200), Fubon (150), Nan Shan (120), Shin Kong (80), China (60), and Taiwan (40). A total of 338 usable questionnaires were returned. Structural equation modeling was performed to estimate the influence of the identified antecedents of WOM communication.FindingsThe results support the proposed model and hypotheses, indicating that customers' positive evaluations of functional quality and technical quality help drive positive WOM communication. Corporate image and trust also play partial mediating roles.Practical implicationsDecision-makers should note that functional quality, technical quality, corporate image, and trust are antecedents of WOM communication. Functional quality and technical quality are the main factors influencing policyholders' perceptions. Therefore, life insurance firms must understand policyholders' quality expectations. Managers should also pay increased attention to promoting favorable WOM communication through strengthening corporate image and trust.Originality/valueThis was the first study to examine WOM communication in Taiwan's life insurance industry. Few studies have investigated the mediating effects of corporate image and trust in the relationships of functional and technical quality with WOM. The findings reveal the importance of WOM to the marketing of life insurance, providing new information for life insurance practice and theory.