The effect of relational selling on life insurance decision making in India

Purpose - The biggest challenge in the Indian life insurance industry is mis-selling and unfair business practices. The purpose of this paper is to explore the effect of relational selling behaviour on investor decision making in life insurance market in India. This study also aims to elucidate the mediating role of trust in predicting the purchase of life insurance policies by investors. Design/methodology/approach - A cross-sectional survey was carried out to collect quantitative data using a validated structured questionnaire. A total of 813 policyholders of life insurance companies operating in Karnataka, South India, were chosen. The data were analysed using the partial least square method of structural equation modeling. Findings - The process of investors' life insurance buying decision is directly influenced by interaction intensity, co-operative intentions of agents, sharing of overt and covert policy information, and indirectly through the partial mediation of trust. Also, trust fully mediates the effect of agent disclosure and personal rapport on decision making by investors. The importance. performance map analysis highlights the pivotal role of overt policy information in investors' decision making. Practical implications - The financial mis-selling in India can be curtailed significantly if the insurance companies insist on responsible and relational selling by their sales agents. The companies would also strategically gain by investing in trust-building programs that enhance quality interactions and honest disclosure of overt and covert policy information, unpretentious intention to co-operate in the policy selection, and emphasize emotional connection and personal rapport with customers. These genuine actions and behavioural manifestations would certainly facilitate appropriate decision making by the investors. Originality/value - There is a paucity of research in India which explicates the role of relational selling behaviour in insurers' decision making. As such, this article expands the scope of relational marketing research in insurance by assessing the relational determinants of investor decisions as well as the role of trust as the mediator in influencing insurance decision making.