The improvement of the economy depends on the reliability of its financial system. The insurance sector is one of the foremost players in the financial system. The insurance sector in Vietnam is on the increase at a very fast pace. As a result of liberalization of the Vietnamese economy, new private sector insurance companies had come into existence which competed with both foreign insurance companies and Vietnamese companies for market share.
Insurance companies are competing not only with themselves but also with other financial institutions within the financial industry. With the entry of private sector insurance companies, the number of insurance companies all over the country has gone up. High level of competition is the most important factor in influencing the structure and activities of the insurance system around the globe. More and more insurance facilities are made available in every part of the country even to small cities, towns and rural areas. With the increasing awareness among the people about the insurance, a variety of services provided by the companies and accessibility of insurance facilities across the globe, the insurance sector is up-and-coming very rapidly and there is a need to recognize the main factors that affect customer’s choice for insurance companies.Consumer markets can be segmented on numerous bases. Division of customer markets helps insurance company to distinguish insurance company customers in desired categories, so that their needs and wants may be effectively addressed for the purpose of preparing the sound and effective marketing strategies. The consumer market can be segmented on the basis of demographic disparities and in this way, the effect of these variables on the influence of customer’s choice should be assessed.
As a result, improper identification of the true determinants of consumers’ company selection decision may result in losing potential customers.The services provided by the insurance companies are almost similar in nature and type and as a consequence, the customers are exposed to differentiated choices. This means that there are unlimited switching choices and customers will choose the alternative that gives him maximum satisfaction in references to different factors that differentiate insurance benefit from each other. Vietnamese insurance industries have been experiencing rapid changes, reflecting a number of underlying developments. The competition among the insurance companies is essentially based on the technology and innovative products and services provided by the insurance companies which may help them to attract and maintain the customers. The competition and immersion in the insurance industry require insurance companies to be more customer focused as the customers today are much concerned about the value for money.With intensified competition in the industry, it is essential for the insurance companies to understand “How customers choose their insurance company? Investigating and evaluating such information will help companies to identify the appropriate marketing strategies that are needed to sustain and survive in the market.
And this is the first research about factors influencing customer’s choice for insurance companies.