There is an emerging trend in which insurance companies offer discount for multiple insurance contracts, and have resulted to various scenarios. Some experts in the insurance company sector argue that offering multiple services by the same insurance company does not guarantee that the customer will stick with them. There are some of consideration that must be taken in focus, for example, the terms and scope of the cover. However, previous studies have shown that, there is a likelihood of two scenarios to occur. Some customers would prefer differential services from multiple companies, for example, house insurance in one company and car insurance in another. Other customer would prefer to have all their services under one insurance company (Schindler 23).
Statement of the Research
The research aims at studying how multiple insurance contracts will affect customers’ decision when choosing their services from a variety of insurance companies.
Goals and objectives
- Goal: This study will help to understand the dominant pattern in the insurance companies and comprehend why some of the companies have established multiple insurance services.
- Objective: The study will provide useful information to insurance companies, which will significantly help them in policy making, pertaining to their strategies in multiple insurance services.
Background
Offering discounts for multiple insurance contracts is a trend that emerged in 1990s. Insurance firms such as, State Farm emerged as one of the most reputable insurance firms offering diverse services to its clients. State Farm offers a wide category of services which includes: house, car and banking services. State Farm has achieved success through offering differential services at a competitive rate in the market. Discount and the multiple services have captured a large composition of the market. Customer finds more appropriate to acquire all their insurance and banking services under one roof. However, as a result of diversity in offering of services, State Farm has experienced a number of challenges (Stevens 17).
Customers have always complained about poor services, and it follows that the company has less concern over their issues. Operating insurance firms who offer diverse services such as discounts for multiple contracts is not an easy task. Insurance companies must have reliable information concerning the market needs and strive to offer the best service to their clients. Customers, on the other hand, need to know the trend, by insurance companies, to offer multiple insurance contracts so that they can make the right choice when demanding insurance services (Stevens 17).
Design
The research will target a population of 60 households in Michigan State. A random sampling will engage 30 households that prefer using insurance firms offering multiple services, and 30 households that prefer services from different insurance firms. The study will randomly pick the respondents from different social and economic background: rich, middle class, poor families. The study will use a formal questionnaire with comprehensive questions regarding, their satisfaction with the insurance company, efficiency of the service offered, rate charged, experience, and their likelihood to shift to other insurance firms. Table containing the data collected will be drawn in numeric figures, which will provide useful information for analysis purpose.
Project Timeline
The first step in preparation of the study will initiate a field study of the households where the research intends to collect data. This will be helpful in gauging their cooperation, accessibility, language to use in questionnaires, and estimating the cost of the study. A formal letter will be send to the 60 households requesting them to participate in the study three weeks before the study. The research will involve 6 members who will present the questionnaires to 10 households each and will take a maximum of 2 days to complete the study. Compiling and cross checking of the data collected will take a day, before analysis (Kolb 9).
Anticipated Result
The study will provide varying result concerning consumer choice and preference of either single insurance firm or multiple insurance firms offering discounts. The research bases on different categories of consumers with varied social, economic background. The respondents also have diverse information concerning services offered by insurance firms and different priorities altogether. The study expects to find low income earner more inclined to insurance companies offering multiple contracts as compared to high income earners and informed respondents. This attributes to the fact that discount and less hustle will make them prefer getting insurance service under one insurance provider. Less informed respondents will tend to prefer using insurance firms they already know, and will depict a high resistance to change to other emerging companies for fear of the unknown. High income earner will tend to show a more inclination towards insurance firms offering single service at a time than the other two respondents groups. This attributes to the fact that, they are more concerned with quality services than discounts offered. This group is also more informed and thus their choice of decision will depend on overall services that will give them the greatest satisfaction. However, a disproportion pattern in preference among the respondents will occur, as social and other factors will direct their choice of insurance firm. The image and service provided by the insurance firms will play a significant role to determine customers’ choice.
References
Kolb, Bonita M. Marketing Research: A Practical Approach. Los Angeles: SAGE, 2008. Internet resource.
Schindler, Roberrt M. Pricing Strategies: A Marketing Approach. New Delhi : SAGE Publication Inc, 2002. Print.
Stevens, Robert E. The Marketing Research Guide. New York: Haworth Press, 1997. Print.