A non-metric multidimensional scaling analysis of customers' attitudes to life insurance : an empirical investigation of insured vs. non-insured attitudes towards life insurance purchasing decision variables in Egypt
This study is an investigation of the variables which determine life insurance purchasing decisions in Egypt. More precisely, the interest is focused on the customers' attitudes towards purchasing life insurance, as well as on demographic/socioeconomic factors that are assumed to influence the decision to purchase. It is hypothesized that: A) Attitudes towards life insurance purchasing decision variables are similar (i.e., there is no difference) for both insured and non-insured typologies; B) the importance attached to saving through life insurance is similar to that attached to saving with the other financial institutions; and C) there is no significant relationship between the insured's demographic/socioeconomic characteristics, and the amount of life insurance purchased. The design of the research is by facets. The faceted design permits the whole universe of content under investigation to be observed and a limited content of this universe to be systematically sampled. The data is collected by means of personally administered interview questionnaires to 300 respondents (150 insured and 150 non-insured) . Since the data collected is of two major different groups of variables (i.e., attitudinal and categorical), two different techniques of analysis are employed. The first group (attitudinal) is non-metric, i.e" ordinal scaled, multivariate, and interdependent data, whereas the second group (categorical) is multivariate and dependent data of both nominal and interval types. Therefore, the decision was made to use the Non-metric Multidimensional Scaling (NMS) technique for the analysis of the attitudinal data, whereas the Multiple Classification Analysis (MCA) was found to be the most appropriate one for the categorical data. The MINISSA computer program output employed in this study, investigates the similarities and dissimilarities between the two typolcgies' (insured and non-insured) attitudes to life insurance purchasing decision variables. A Wilcoxon test has been employed to investigate the significance of hypotheses A and B, whereas F-ratio test is used for testing hypothesis c. A Kendall correlation analysis is also carried out on the relationship between the variables that are assumed to determine the life insurance purchasing decisions. The research conclusions are: i) the two typologies are similar in their (average) expressed attitudes to life insurance purchasing decision variables; ii) the most important reasons for purchasing life insurance (by both typologies) are: 1) the protection of dependents; 2) saving purposes for daughters' marriage costs; and 3) retirement income/old age protection; iii) the most desirable financial facilities (offered by the insurer) are: 1) profit sharing; 2) borrowing against the cash value of the policy; and 3) the guarantee of surrender values; iv) the most important financial aspects for purchasing life insurance are: 1) a small amount of money being invested; 2) safety for money; and 3) provision against inflation. The significantly different attitudes expressed by the two typologies are those with regard to the importance attached to having life insurance against saving with the other financial institutions. It is concluded that the most distinctive function of life insurance programmes is to cover risks (protection element), whereas saving with the other financial institutions is considered to be of more importance where the purpose(s) is to get a high return on investments and/or saving for emergency situations. The findings on the MCA output show that the selected predictors account for a relatively high proportion of the variance in the amount of life insurance purchased (R2 = 55%). However, the most important explanatory variable is found to be current income. The investigation finally concludes by suggesting the potential applications of these research findings for the process of decision making in the life insurance marketing management in Egypt.