Service failure and consumer switching behaviors: Evidence from the insurance industry

This paper analyzes consumer switching behaviors from the perspectives of consumer psychology and interactions with the society, such as consumer’s emotional intelligence, relationship involvement and personality traits. We survey life insurance policyholders in Taiwan and Hong Kong. Our results show that when service failures are more serious, consumers with higher emotional intelligence exhibit lower intention to switch than those with lower emotional intelligence. Similarly, the more serious the service failures, the more the consumers with internal locus-of-control orientation exhibit intention to change their existing consumption than those with external locus-of-control orientation. Further for more serious the service failures, the higher the relationship involvement with customers, the more their intention to switch is reduced. The unique contribution of this paper is that it combines multivariate statistical analysis and a non-linear neural fuzzy network model structure to verify the collected data. The paper concludes with a discussion of management implications and recommendations for future studies.