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1. Introduction
The digital age has prompted strategic choices for many industries over the course of the past two decades (Barns et al., 2017; Swaminathan, 2016). Of particular note is how the financial services industry by and large has been experiencing a recent emergence of new technology innovations and process disruptions amidst their attempts to secure successful business models, while creating enhanced customer experience and new approaches to transform services (Nicoletti, 2017; Gomber et al., 2018). Thus, within the next two to four years, insurance companies are expected to undergo a similar form of disruption that the banking industry has recently experienced (Nicoletti, 2016; Cappiello, 2018). Consequently, insurance companies unable to keep up with the rapid pace of change run the risk of disappearing (Iriarte et al., 2017). More importantly are the new needs of the customers brought on by Internet, which have served to inform the customers better, and provide them with easier accessible, and wider options than before (Schröder and Lohse, 2018).
Thus, insurance companies are becoming more incentivised to adopt a delivery model that seeks to make their services available in a way that caters to the current forms of customer behaviour (Cappiello, 2018; Coletti and Aichner, 2011). Still, the potentially increased efficiency of digitalisation comes at the cost of less personal interaction with the customer (Cappiello, 2018). This is a precarious development for service organisations such as insurance companies, as maintaining a high level of customer interaction is a crucial component in order to succeed in financial terms. This is because the customers’ perception of a service is largely affected by such interactions (Hennig-Thurau, 2004; Bitner et al., 1990).
Thus, a lingering question is how the disruptive development prompted by digitalisation affects customer loyalty in the insurance industry? In this context it should be pointed out that a 2017 Bain-report indicated that insurers have long struggled to attract and retain customers. This is due to the highly competitive marketplace and the fact that the products provided are often regarded by the customers as a commodity that is price-dependant (Naujoks et al., 2017). As the report concludes, insurers have made strenuous efforts in recent years to build customer loyalty by embracing digital platforms and by redesigning customer...