Eliciting Customers’ Preferences in the Cooperative Insurance Industry: Evidence from the Saudi Motor Insurance Market

• Published in: SAGE open 2024-07, Vol.14 (3)
• Main Authors: Almulhim, Tarifa, Al-Mahish, Mohammed, Alabdulqader, Mohammed
• Format: Article
• Language: English
• Subjects: Discounts; Insurance coverage; Insurance industry; Purchase options
• ISSN: 2158-2440; 2158-2440
• DOI: 10.1177/21582440241266003

This research aimed to provide a better understanding and analysis of consumer patterns relative to behavioral preferences in the Saudi cooperative motor insurance market. This aim was motivated by the fact that customers’ preferences have been underexplored in this market. Thus, this paper applied a multi-attributes decision analysis methodology to analyze the decision process of purchasing or retaining cooperative motor insurance based on a discrete choice experiment and a choice-based conjoint analysis. The methodology was conducted via a designed questionnaire that asked 385 customers in the Eastern Region to choose between a finite set of decision purchase options that varied along three key attributes: type of coverage, availability of discount, and insurance premium. Sample results showed that the most important attributes were the insurance premium, followed by the type of coverage. The availability of a discount was the least important attribute; however, compared with men, women placed a higher importance on coverage and discounts. The findings can be valuable to policymakers and managers of insurance companies in designing new characteristics for cooperative motor insurance products in Saudi Arabia in line with Saudi Arabia’s Vision 2030. JEL Classification: C9, D7, C13, G22 Plain language summary Analyzing customer preferences in Saudi Arabia’s cooperative insurance sector This study aimed to enhance comprehension of consumer decision-making processes concerning cooperative motor insurance within the Saudi Arabian context, an area that has received limited investigation heretofore. Employing a multi-attribute decision analysis methodology, the research scrutinized the preferences influencing the purchase or retention of cooperative motor insurance, leveraging discrete choice experimentation and choice-based conjoint analysis. Through a structured questionnaire administered to 385 respondents in the Eastern Region, participants were tasked with selecting among predefined insurance options delineated by three pivotal attributes: coverage type, availability of discounts, and insurance premium. Results indicated that the foremost determinant of choice was the insurance premium, trailed by coverage type, while discount availability held lesser significance. Notably, gender discrepancies emerged, with female respondents attributing greater importance to both coverage and discount availability compared to their male counterparts. These findings hold c