| Summary: | 碩士 === 國立中興大學 === 高階經理人碩士在職專班 === 97 === After Asian financial crisis in 1997, the interest rate decreases substantially in many countries of Asia. The state interest rates of insurance policy are significantly different from the market interest rate. Therefore, insurance companies introduce new insurance products to alleviate the impact of decreasing interest rate. The investment-related products are very popular during the period.
While the sales of investment-related products increase after 2002 in Taiwan, the insurants and insurance agents are not familiar with this type of products. Therefore, insurants complain to or sue the insurance companies when they face the loss from the investment-related products. On the one hand, the new products may increase the operating profit. On the other hand, however, the customers’ complaints my also increase the operating cost. Whether the new product can create value for these insurance firms is a very critical question. Meanwhile, it is also important about how the quality of insurance agents can affect the impact of the new product on insurance firms. There exists rare evidence to support the net positive contribution of the new product to the insurance firms. The research just fills in this gap and provides some useful evidence regarding these issues.
First, we analyze how the investment-related product can contribute to the firm’s operational revenue and profit. The evidence shows that the new product has significant effect on the operational revenue of insurance firms. However, the impact on the net income is not significant. Based on the result, we expect that the benefit of the new product may not dominate the cost caused by these new sales. Second, we also find that the complain rate also significantly increases with the sales of the investment-related products, which represents the cost of the new sales.
As to the quality of the insurance agents, we focus on the impact of age, gender, and education of these agents on the previous mentioned relation between the new investment-related product and the operational performance of the insurance firms. We find that both male and female agents who own college degree have significantly positive impact on the complain rate. However, the agent’s age, on average, has no significant effect on the complain rate. Therefore, we suggest that insurance firms should improve the education level of these agents to reduce the complain rate of the new sales of investment-related insurance products.
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