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

An Chen, Yusha Chen, Finbarr Murphy, Wei Xu and Xian Xu

Journal of Risk & Insurance, 2023, vol. 90, issue 2, 487-519

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.

Date: 2023
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