How value added services influence the purchasing decision of insurance products

More intensive competition confronts insurance companies with increasingly price-driven and disloyal customers. Strategies for maintaining and advancing competitiveness through value added services have hence come to the fore. Despite the number of academic contributions in this area and products on the market it remains unclear how the provision of value added services affects the customer's decision during the purchasing process. To close the research gap, we conducted a choice-based conjoint analysis to explore the influence of providing value added services as part of an insurance product on the purchasing decision. Based on a motor insurance product we considered product-related factors such as price, franchise, and the no claims discount as well as services provided after an accident and services provided at the time of closing the contract. The results of this analysis show a significant influence of services provided after an accident and services provided at the time of closing the contract on the overall purchasing decision. A consecutive cluster analysis revealed different customer segments which reflect traditional price-aware customers but as well those who primarily base their purchasing decision on the provision of value added services.