Abstract
As a service-providing business that deals with the customers directly, the progress of the life insurance industry depends highly on the behavior of the salesforce. Unethical salesforce behavior can be attributed as one of the prominent reasons for the life insurance lower penetration rate and higher lapse rate prevail in Sri Lanka. Therefore, the main objective of this study is to identify the factors affecting salesforce unethical behavior in life insurance industry. To investigate the factors, 152 life insurance agents in Badulla district were surveyed. Quantitative research design along with snowball sampling were employed to collect the data. Using multiple regression analysis, results indicate that selling pressure and competitive intensity have a significant positive relationship with salesforce unethical behavior. Thus, practitioners and regulators are suggested to reduce sales pressure by means of reducing sales targets and discouraging anti-competitive behavior via code of conduct and provision of guidelines for fair competition.
Highlights
The link between insurer and insured is the insurance agent who is known as the insurance advisor or the wealth planner
According to the descriptive statistics, the highest minimum value and highest mean are recorded for the “salesforce unethical behavior” and the lowest maximum value and lowest mean are recorded for “ethical climate”
Confirming the same, our findings show that competitive intensity significantly affects the unethical behavior of insurance agents
Summary
The link between insurer and insured is the insurance agent who is known as the insurance advisor or the wealth planner. Agents play an important role as a liaison between consumers and the company. In Sri Lankan context, the insurance agents play the role of introducing life insurance policies and the role of collecting the premium and accounting the premium for the relevant policy. Life insurance companies are service providing companies and largely depend on the behavior of insurance salesforce since they directly transact with the clients. In the case of marketing insurance products, it is a combination of commission-based selling and imperfect information which leads to many significant opportunities for unethical or ethically questionable behavior (Diacon and Ennew, 1996). According to Diacon and Ennew (1996), ethical dilemmas exist more in distribution and promotion arenas compared to product and price arenas
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