Journal Issues

Abstract

This study examines the factors influencing customers' choice of life insurance companies in Chennai City in an increasingly competitive insurance market. Following the liberalization of the Indian insurance sector, customers have been offered a wide range of life insurance products by both public and private insurers, making it essential to understand the determinants of their selection decisions. The study is based on primary data collected from 500 policyholders, comprising 250 customers each from public and private sector life insurance companies, using a structured questionnaire. Eighteen variables representing customers' preferences were measured using a five-point Likert scale. Stratified random sampling was adopted for data collection, and the responses were analyzed using Principal Component Factor Analysis to identify the underlying dimensions influencing customers' choice of life insurers. The Kaiser-Meyer-Olkin (KMO) value of 0.701 and the significant Bartlett's Test of Sphericity confirmed the adequacy of the data for factor analysis. The results extracted five predominant factors explaining 65.20% of the total variance. These factors were identified as Reliability and Reputation of the Company, Quality Customer Service, Advantages of Insurance Products, Promotional Activities, and Financial Facilities. Among these, reliability and reputation emerged as the most influential determinant, followed by customer service quality. The findings suggest that customers primarily prefer insurers that possess a strong corporate image, trustworthy operations, efficient service delivery, attractive product benefits, effective promotional initiatives, and flexible financial facilities. The study provides valuable insights for life insurance companies in designing customer-centric strategies to enhance customer acquisition and retention in a competitive environment. 

Keywords: Life Insurance Companies; Customer Choice, Customer Preference and Service Quality