TITLE
"Service Quality in Private Passenger Automobile Insurance," J. Tim Query, Robert E. Hoyt, and Min (Enya) He Fall 2007, Volume 30, No. 2, pp 152- 172. Full-text articles soon will be available
through ABI/INFORM and EBSCO; click here for article PDF
ABSTRACT
This study extends previous research on service quality in the private
passenger automobile insurance industry by providing empirical evidence using an
improved proxy for the value of service. The endogeneity of the value of service is
recognized and treated statistically with the two-stage least squares approach. The
empirical model also includes a number of control variables that affect the service
quality of an insurer. The measures of quality are customer satisfaction scores that are
collected from two consumer surveys: the Consumer Reports Survey and the DALBAR
Survey. Of critical interest in the analysis of these two different surveys is their
respective treatment of claims problems and non-claims problems. For customers who
have filed claims with their insurers, more weight is given to the value of service they
perceive. In particular, how fast their insurers handle their claims is much more
important to these customers than to the general population of policyholders. In
contrast, for general consumers of automobile insurance, their satisfaction is based on
a number of factors. Specifically, the insurer’s capacity to provide service, output in
auto lines, advertising expenditures, and distribution system all affect the quality of
service perceived by consumers. [Key words: experimental/theoretical treatment,
property casualty insurance, quality control]
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