THE ANTECEDENTS OF CUSTOMER LOYALTY IN THE AUTOMOBILE INSURANCE IN BANGKOK AND VICINITY

The intense competition in the auto insurance business has caused price cuts which in turn affect the quality of service and image of the insurance companies as well as lead to lack of trust from customers. It also contributed to the results in low renewal rateof the automobile insurance policy. When the cost of acquiring new customers has increased due to the competition condition, many companies incur losses. The companies, therefore, need to adjust their strategies to build loyalty and keep existing customers with them as long as possible. The objectives of this research were to study: 1) the current state of antecedents affecting customer loyalty to the automobile insurance business; 2) influences of service quality, image of an insurance company, and customer satisfaction on the customer loyalty to the automobile insurance business; and 3) develop a causal structural equation model of the customer loyalty.This research employed a mixed research methodology combining quantitative and qualitative methods. For the quantitative research part, the research sample consisted of 400 customers of the automobile insurance business located in Bangkok and vicinity area. The sample size was determined based on the criterion of 20 times the observed variables. They were selected via multi-stage sampling. Data were collected with the use of a questionnaire and analyzed with a structural equation model.As for the qualitative research component, in-depth interviews were conducted with 17 key informants consisted of executives of the insurance company, academics and the automobile insurance policyholders. The findings showed that:1) service quality, corporate image, customer satisfaction, and customer loyalty were rated at a moderate level; 2) service quality, corporate image, customer satisfaction had an influence on the customer loyalty, with a 0.5 level of statistical significance, and all of these factors could predict the results by 65 percent. In addition, the qualitative research findings indicated that claims service was the key factor affecting the customer loyalty to the insurance companies; and 3) the model, developed by the researcher, was called the AIL Model or the Automobile Insurance Loyalty Model, consisting of integrated concepts and approaches which could be used for the insurance companies to formulate policies and strategies and implement rapid operations through the one-stop service by using call centers to respond to the needs of modern customers. These research finding can be used to reduce the business risks faced by the insurance companies which serve as the crucial factors for the stability of the business. In addition, the automobile insurance companies must allocate budgets to develop information systemin order to establish the omni-channel to link the data of the customers, put in place a database system and data processing and analysis to formulate policies and strategies for creating good experiences, create customer service value, establish competitive advantage, and foster customer loyalty to achieve the overall development for the auto insurance industry. Keyword: Customer Loyalty, service quality, corporate image, customer satisfaction, insurance industry