Factors influencing consumer choice in the medical insurance industry.
Boodhun, Yudhistir Anund.
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Background The medical schemes industry has been characterised by extreme uncertainty in recent times. Industry turbulence can be attributed to a number of factors that have impacted on the manner in which business is conducted. Amongst these the most significant is the change in legislation that has occurred in the laws governing the administration of medical schemes. The industry is characterised by an increasing number of schemes competing for a finite number of profitable customers. In light of these changes, it was thought prudent to investigate the consumer behaviour characteristics surrounding this industry. Objectives The objective of the study was to determine the factors that influence consumers to choose particular medical schemes over others. To this end it was hypothesised that four factors, namely price, benefits offered, ancillary benefits and broker influence played significant role in the decision making process of consumers . Methods Data was collected using a research questionnaire. This questionnaire was issued to respondents who had recently purchased, or attempted to purchase medical cover. Contact was made with the respondents via a snowball sampling method, using insurance brokers as points of contact. The questionnaire was composed of a mixture of open ended, dichotomous and disconfirmation scale type questions . Results Of the four factors that were hypothesised to significantly influence consumers in their choice of medical schemes, it was found that two were proved correct. These being, the benefits offered and the price of the offering respectively. The third hypothesis, the effect of an ancillary benefits programme was found to influence the consumer in their choice, however respondents did not regard the programmes as vital. They did however indicate that they tried to purchase cover that included an ancillary benefits programme. The final hypothesis was disproved as it was found that consumers did not always follow the recommendations of the broker in choosing a medical scheme. They were however found to consult extensively with vanous brokers regarding the types of cover that are available. The final choice between medical schemes were however made by the consumer independently of the brokers influence. Conclusion It is recommended that further research be conducted to ensure that consumer needs harmonize with the medical schemes product offerings. The importance of the various factors that compromise the purchasing process should be measured against each other to determine the importance that consumers place on a specific factor. This prevents medical schemes from placing emphasis on unwanted product features and thereby wasting valuable resources. Further investigation into the topic should encompass all aspects that are deemed relevant, as well as a cross tabulation between the variable factors influencing consumer choice and consumers demographic information. This would further aid the organisations to firstly create more efficient market segments, and secondly to more effectively match product offerings with the given segments.