Managing Consumer Trust Via Marketing Disclosures And Transparency In Insurance Products

Abstract

Insurance products have high uncertainty, future orientation, and intangibility, which make consumer trust a key defining factor of participation in the market and long-lasting relationships. The ongoing apprehension about obscure terms and conditions, complicated language of the policies, lack of transparency in claims process, and asymmetry of information keeps casting doubt on the insurers, especially in the ever-digitized and algorithm-driven insurance context. The research question presented in this study is that marketing disclosures and operational transparency determine consumer trust and vice versa, and the study also looks into the effect of trust on the important behavioural outcomes, including purchase intention, renewal intention and recommendation behaviour. Basing the research on the theory of signalling and on the marketing contexts based on trust, the study hypothesises that clear, full and correct disclosures work as signals to minimise information asymmetry and create an understanding of the honesty and ability of insurers.

Based on survey data of 400 current and prospective insurance consumers in an emerging market setting, the paper applies confirmatory factor analysis and structural equation modelling in testing hypothesised relations between marketing disclosures, operational transparency, consumer trust and behaviour outcomes. The results show that the marketing disclosures and the transparency of operations have strong and positive effects on consumer trust. Consumer trust on the other hand has a powerful positive impact on the behavioural outcome and partly mediates the impact of disclosures and transparency on consumer behaviour. Further discussion shows that the relationship between disclosures/transparency and trust as well as perceived product complexity are positively linked to product involvement, and perceived product complexity has a negative association with trust, as well as the significance of simplicity and clarity in insurance communications.

The findings highlight the fact that transparency is not just a regulatory or ethical requirement, but a strategic asset which can deliver quantifiable benefits of behaviour. To the practitioners, the research underlines the necessity of consumer-based disclosure practices, simplified communication and observable operations especially in high involvement segments. In general, the study adds to the body of the insurance research, by providing an empirical relationship between the marketing disclosures and operational transparency with the trust-based behavioural results, which can be applicable to the insurers in the complex and trust-sensitive market