The impact of electronic insurance implementation on agility, competitive advantage and profitability of selected insurance companies in Iran

Seify, M.; Sanayei, A.; Aghdaie, F.A.; Mohammad Shafiee, M.; Mohamadi Zanjirani, D.

doi:10.22056/ijir.2022.03.03

Document Type : Original Research Paper

Authors

Department of Management, Faculty of Administrative Sciences and Economics, University of Isfahan, Isfahan, Iran

https://doi.org/10.22056/ijir.2022.03.03

Abstract

BACKGROUND AND OBJECTIVES: The aim of this study was to investigate the electronic insurance implementation and its impact on organizational agility, competitive advantage and profitability in selected insurance Companies in Iran.
METHODS: This research is applied in terms of purpose and descriptive-survey in terms of method. The information of this research was based on the library information sources. A researcher-made questionnaire was used to examine three performance factors of insurance companies (i.e., market share, profitability, and wealth level). The research population includes academic professors and experts of insurance companies such as Iran, Asia, Parsian, Pasargad, Kausar, Alborz, Dana, Tejarat Nou, and Ma. These companies together have more than 70 percent of the market shares in the stock sector and are among the first-tier companies in Iran's insurance industry in terms of profitability and wealth factor. About 320 professors and insurance experts were selected by simple random sampling. Descriptive statistics were used for data analysis. Inferential statistics were also used to test research hypotheses and determine the relationship between independent variables and dependent variables. Data analysis was also done using structural equation method and statistical analysis in social science and partial least squares statistical software.
FINDINGS: All hidden variables had Cronbach's alpha value and composite reliability above 0.7, which indicates the internal consistency of the questionnaire. Also, the average value of the extracted variance for the variables was higher than 0.5, which indicates the degree of correlation between the structure and its indicators. Therefore, the convergent validity of the measurement model is also desirable. The Fornell and Larker criteria were used to test the divergent validity of the measurement model. Based on the results of this criterion, acceptable divergent validity was reported. The results of research hypotheses showed that the implementation of electronic insurance has a positive and significant effect on all three variables of agility and its dimensions, competitive advantage and profitability of insurance organizations Meanwhile, the effect of electronic insurance implementation on agility (β=0.611) was more than competitive advantage (β=0.476) and profitability (β=0.299).

CONCLUSION: Considering the new approach of insurance companies towards e-services, it is crucial to pay attention to the key success factors of such programs. Due to the very high importance of the successful implementation of electronic insurance for insurance companies and due to the lack of similar and comprehensive studies, it seems very necessary to carry out such research. The results of this research showed that successful implementation of electronic insurance has a positive and significant effect on the company's agility, competitive advantage, and profitability. The findings of the research provide practical suggestions in the field of information technology infrastructure development to the managers of the insurance industry and for future researches. For example, web technologies and service-oriented architectures can guarantee the agility of insurance by reducing the response time to customers, creating flexibility in responding to external needs. On the other hand, the use of electronic insurance allows companies to get strategic resources in the market faster and new complementary skills are created in the company so that they can maintain their superiority in the competition. Also, the implementation of electronic insurance reduces the costs of administrative bureaucracy, organizational levels and hierarchies, costs of purchasing paper and items, personnel costs, evasion and insurance frauds and other cases. It directly and indirectly affects the company's income and profitability.

Keywords

Main Subjects

New Insurance Technologies

References

‌Agarwal, A.; Shankar, R.; Tiwari, M., (2007). Modeling agility of supply chain. Industrial Marketing Manage., 36(4): 443-457 (15 pages).

Ahghar Bazargan, N.; Shafiee, M., (2016). Customers’ electronic trust to online stores: A risk reduction approach. Karafan. 13(40): 113-122 (10 pages).

Akhtar, P .; Khan, Z.; Tarba, S.; Jayawickrama, U., (2017). The internet of things, dynamic data and information processing capabilities, and operational agility. Technol. Forecasting Soc. Change, 136: 307-316 (10 pages).

Amalia, M.S.R.; Arianis, C.; Tetty, H., (2019). The influence of i‌nformation and communication technology on firm performance through competitive advantage: A case study in cosmetic industries of Indonesia. Russ. J. Agric. Soc. Econ. Sci., 12(96): 243-255 (13 pages).

Azari, M., (2012). Investigating the relationship between information technology and organizational agility (case study: companies admitted to the Tehran Stock Exchange), master's thesis, Qom University, Faculty of Engineering and Technology. (In Persian).

Bavarsad, B.; Ganjali, S.; Rahimi, F.; Mehrabi, A., (2016). Elevated process model of financial performance on the basis of just in time, agile and total quality management. J. Strategic Manage. Stud., 7(27): 107-123 (18 pages). (In Persian).

Bazini, E.; Madani, F., (2015). ICT application in the insurance industry: Its impact in customer relationship management, academic. J. Interdiscip. Stud., 4(5): 307-311 (5 pages).

Bharadwaj, S.S.; Mukherjee, J., (2018). Developing SOA-enabled service agility capabilities: case studies in services industry. Int. J. Bus. Inf. Syst., 1: 21–44 (14 pages).

Brannen, M.Y.; Doz, Y.L., (2012). Corporate languages and strategic agility: Trapped in your jargon or lost in translation? California Manage. Rev., 54‌(3):‌ 77-97 (21 pages).

Cekrezi, A., (2015). Determinants of financial performance of the insurance companies: A case of Albania. Int. J. Econ., Commerce, Manage. 3(4): 1-10 (10 pages).

Chakravarty, A.; Grewal, R.; Sambamurthy, V., (2013). Information technology competencies, organizational agility, and firm performance: Enabling and facilitating roles. Inf. Syst. Res., 24(4): 976-997 (22 pages).

Chin W.W., (1998). Commentary: Issues and opinion on structural equation modeling.‏

Damodaran, A., (2013). Valuing financial service firms. Investment Management. 581 – 610 (30 pages).

Dehghani Soltani, M.; Shiri, A.; Farsizadeh, H.; Taybi, D.; Falahi, F., (2016). An examination of the impact of authentic leadership on achieving competitive advantage by clarifying mediating role of employees' psychological empowerment. Iran. J. Insur. Res., 6(1): 107-126 (20 pages) (In Persian).

Doz, Y.L.; Kosonen, M. (2008). The dynamics of strategic agility: Nokia’s rollercoaster experience. Calif. Manage. Rev., 50(3): 95-118 (24 pages).

Dweekat, A.J., Hwang, G.; Park, J. (2017). A supply chain performance measurement approach using the internet of things: Toward more practical SCPMS. Ind. Manage. Data Syst., 117(2): 267-286 (20 pages).

Elisabeth, E.; Mulyana, B., (2019). Factors that influence profitability of general insurance issuers in Indonesia. Econ. Lett. 6(1): 25-39 (15 pages).

Epetimehin, F.M., (2011). Achieving competitive advantage in insurance industry: The impact of marketing innovation and creativity. J. Emerging Trends Econ. Manage. Sci., 2(1): 18-21 (4 pages).

Ettis, S.A.; Haddad, M.M., (2019). Utilitarian and hedonic customer benefits of e-insurance: A look at the role of gender differences. Int. J. E- Bus. Res., 15(1): 109–126 (18 pages).

Fornell C.; Larcker D.F., (1981). Structural equation models with unobservable variables and measurement error: Algebra and statistics. J. Marketing Res., 18(3): 382-388 (7 pages).‏

Gakiria, P.N., (2019). Effect of e-business strategy on competitive advantage, a research project submitted in partial fulfillment of the requirements for the award of the degree of master of business administration. School of Business. University of Nairobi.

Ganesh Sapa, S.; Phunde, S. B.; Godbole, M.R., (2014). Impacts of ICT application on the insurance sector (e-insurance). IBMRD's J. Manage. Res., 3(1): 311-320 (10 pages).

Gareche, M.; Hosseini, S.M.; Taheri, M., (2019). A comprehensive literature review in competitive advantages of businesses. Int. J. Adv. Stud. Hum. Social Sci., 8(3): 223–240 (18 pages).

Grazy, M.L.T.; Parimalarani, G., (2019). E-Insurance: A platform for insurance penetration in India. Restaurant Bus., 118(6): 90-93 (4 pages).

Haghighi Kafash, M.; Mazloomi, N.; Akhavi Rad, S., (2012). The effect of online trust on the use of electronic services by insurers (case study: Insurance companies in Tehran). Iran. J. Insur. Res., 1(2): 25-50 (26 pages). (In Persian).

Haji Heidari, N.; Bahadori, P.; Behestani, S., (2015). Investigation of electronic maturity level of insurance industry (A comparative study of stock and non-stock insurance agents in Iran). Iran. J. Insur. Res., 4(2): 109-130 (22 pages). (In Persian).

Haseeb, M.; Hussain, H.I.; Kot, S.; Androniceanu, A.; Jermsittiparsert, K., (2019). Role of social and technological challenges in achieving a sustainable competitive advantage and sustainable business performance. Sustainability. 11(14): 1–23 (23 pages).

Hazen, B.; Byrd, T., (2012). Toward creating competitive advantage with logistics information technology. Int. J. of Phys., Distrib. Logist. Manage. 42(1): 8-35 (28 pages).

Henseler, J.; Ringle, C.M.; Sinkovics, R.R., (2009). The use of partial least squares path modeling in international marketing. In book: Advances in International Marketing. Publisher: Emerald JAI Press. 277-319 (44 PAGES)

Hifza. F., (2011). Determinant of insurance companies profitability. An analysis of insurance Sector of Pakistan.

Hijjaw, G.S.; Al-Shawabkeh, K.M., (2017). Impact of strategic agility on business continuity management (BCM): The moderating role of entrepreneurial alertness: An applied study in Jordanian insurance Companies. Int. J. Bus. Manage. 12(10): 155–165 (11 pages).

Hiwarkar, T., (2013). E-Insurance: Analysis of the collision and allegation of e-commerce on the insurance and banking. J. Bus. Manage. Soc. Sci. Res., 2(6): 1-5 (5 pages).

Hofstrand, D., (2015). Understanding profitability. Iowa State University extension and outreach. Retrieved. Ag Decisions Makers. File C3-24.

Horsa, S., (2019). Factors affecting profitability of insurance companies in Ethiopia, A thesis submitted to the department of accounting and finance in partial fulfillment for the requirements of the degree of Master of Science in accounting and finance, Addis Ababa University, Ethiopia.

Huggins, R.; Izushi, H., (2015)., A supply chain performance measurement approach using the internet of things: Toward more practical SCPMS. Competitiveness Rev., 1-17 (17 pages).

Hulland, J., (1999). Use of partial least squares (PLS) in strategic management research: A review of four recent studies. Strategic Manage. J., 20(2): 195-204 (10 pages).‏

Iacocca Institute. (1991). 21st Century Manufacturing Enterprise Strategy – An industry-led view, Iacocca Institute, Bethlehem, PA.

Iacovone, L.; Pereira-López, M.; Schiffbauer, M., (2017). ICT use, competitive pressures, and firm performance in Mexico. The World Bank Economic Review.

Jafarzadeh Zarandi, M.; Sharifian, E.; Ghahreman Tabrizi, K., (2019). Explaining organizational agility model based on information technology from the perspective of sports experts. J. Sport Manage., 10(52): 137-160 (24 pages). (In Persian).

Kazemi Ardakani, D., (2010). Investigating the improvement of electronic insurance (Case study: Electronic insurance branches). Master's Thesis, Payam Noor University, Faculty of Social and Economic Sciences, Tehran. (In Persian).

Keikha, A.; Sarani, M., (2017). Identification and prioritization of health insurance system implementation barriers based on a three-branch model (Case study: Zahedan city). Iran. J. Insur. Res., 6(4): 105-123 (19 pages). ‌‌(In Persian).

Kheirandish, M.; Moerid Shushtri, M.; Gholam Alipour, A., (2015). Pathology of the implementation of electronic insurance system (case study: Iranian insurance), World Conference on Management, Accounting Economics and Humanities at the beginning of the third, Shiraz. (In Persian).

Kozak, S., (2011). Determinant of profitability of non-life insurance companies in Polonsad during integrating with European financial system. Electron. J. of Pol. Agric. Univ.,14(1): 1-9 (9 pages).

Lim, J.; Stratopoulos, T.; Wirjanto, T., (2012). Role of IT executives in the firm's ability to achieve competitive advantage through IT capability. Int. J. Accounting Inf. Syst., 13: 21–40 (20 pages).

Liou, J.J.H.; Tzeng, G. H., (2007). A non-additive model for evaluating airline service quality. J. Air Transp. Manag., 13(3): 131-138 (8 pages).

Lowry, P. B.; Wilson, D., (2016). Creating agile organizations through IT: The influence of internal IT service perceptions on IT service quality and IT Agility. J. Strategic Inf. Syst., 15: 1–16 (16 pages).

Meshkat, L.; Farkhondehnia, F.; Bagheri, Z.; Alihoseini O.; Sanayeimatak S.; Esmaeili M.; Mostafalo M.; Ebadati M.; Masaratbakhsh, M., (2012). Electronic insurance and its application in e-commerce. Interdiscip. J. Contemp. Res. Bus., 4(8): 640-647 (8 pages).

Mubaraka, G.M.; Momanyi, W.K.; Jibia, M.S., (2013). Integrating ICT in insurance management: Design and development of an online insurance system for E. Africa insurance company. J. Inf. Eng. Appl., 3(5): 10-20 (11 pages).

Nunnally, J., (1978). Psychometric Theory. New York, NY: McGraw-Hill.

Nwabueze, U.; Mileski, J., (2018). Achieving competitive advantage through effective communication in a global environment. J. Int. Stud., 11(1): 50-66 (17 pages).

Obasan, K.; Banjo, H.; Ariyo, O., (2015). Brand loyalty and organizational profitability. Fountain J. Manage. Social Sci., 4(1): 60-73 (14 pages).

Parmitasari, R.D.A.; Abdullah, W.; Alwi, Z.; Haris, H., (2019). Social media and analytics for competitive performance: A conceptual research framework. Conference: International Conference on Business Information Systems Project: Competitive Advantage for the Data-Driven Enterprise (CADENT).

Porter, M.E. (1985). Competitive Advantage. Creating and Sustaining Superior Performance. New York: Free press.

Pozzebon, M.; Diniz, E.H., (2012). Theorizing ICT and society in the Brazilian context: A multilevel, pluralistic and remixable framework. Braz. Administration Rev., 9(3), 287-307 (21 pages).

Queiroz, M.; Tallon, P.P.; Sharma, R.; Coltman, T. (2017). The role of IT application orchestration capability in improving agility and performance. J. Strategic Inf. Syst., 27(1): 1-42 (42 pages).

Racinskaja, I.; Žalimiene, A.; Žaptorius. J., (2013). Knowledge, innovations and technologies integration nurturing electronic insurance business. Innovative Info Technologies for Science, Business and Education, 1(14): 15-21 (7 pages).

‌Raduan, C.R.; Jegak, U.; Haslinda, A.; Alimin, I.I., (2009). Management, strategic management theories and the linkage with organizational competitive advantage from the resource-based view. Eur. J. Social Sci., 11(3): 402-418 (17 pages).

Ravichandran, T., (2017). Exploring the relationships between IT competence, innovation capacity and organizational agility. J. Strategic Inf. Syst., 27(1): 21-35 (15 pages).

Roberts, N.; Grover, V., (2012). Leveraging information technology infrastructure to facilitate a firm’s customer agility and competitive activity: An empirical investigation. J. Manage. Inf. Syst., 28(4): 231–270 (40 pages).

Roth, A., (1996). Achieving strategic agility through economies of knowledge. Strategy Leadersh. 24(2): 30-37 (8 pages).

Sadeghi Aliabadi, H.; Heydarzadeh Aghdam, N., (2015). Investigating the impact of electronic banking on profitability (Case study: Iran's selected private banks). Trend Quarterly, 23: 75-106 (30 pages). (In Persian).

Sadraei, A., (2007). Benefits and risks of electronic insurance. Mag. Insur. World. 112: 5-11 (7 pages). (In Persian).

Sambamurthy, V.; Bharadwaj, A.; Grover, V., (2003). Shaping agility through digital options: Reconceptualizing the role of information technology in contemporary firms. MIS Q., 27 (2): 237–263 (27 pages).

‌Sebjan, S.; Bobek, P.; Tominc, S., (2014). An organizational factors influencing effective use of CRM solutions. Procedia Technol., 16: 459-470 (12 pages).

Sehat, N.; Mazloomi H.; Fakhimi Mohammadpour, H., (2015). The relationship between organizational innovation and competitive advantage among insurance companies. Iran. J. Insur. Res., 2(12): 1-34 (34 pages). (In Persian).

Shafiee, M.M., (2021). Competitive advantage via intellectual capital: A moderated mediation analysis. J. Intellectual Capital. 23 (5), 957-997 (40 pages).

Shafiee, M. M.; Ahmadzadeh, S., (2017). The impact of organizational agility and‌ corporate social responsibility on brand‌ image. Brand Manage. 4(1): 41-78 (38 pages).

‌Shafiee, M.M.; Bazargan, N.A.; Kazeminia, A., (2017). Modeling customer electronic trust in online stores: A risk reduction approach. Communities, 1(2): 1-8 (8 pages).

‌Shafiee, M.M.; Seify, M.; Mohammadi, M., (2020). The effects of customer relationship management on improving internal processes, customer satisfaction and profitability (Case study: Isfahan social security organization branches). Commer. Strategies. 15(12): 31-48 (18 pages).

‌Shafiee, M.M.; Seify, M.; Yazdi, A., (2020). Antecedents and consequences of implementing electronic customer relationship management in small and‎ medium enterprises. N. Marketing Res. J., 10(1): 129-146 (18 pages).

Sheng, M.; Chang, S., (2013). Knowledge barriers, knowledge transfer, and innovation competitive advantage in healthcare settings. Manage. Dec., 51(3): 461-478 (18 pages).

Singh, N., (2015). Selling Life insurance in new era of digitalisation: A study in Indian prospective, Biz and Bytes, 6(2): 202-211.

Ştefea, P., (2015). Cost control- a tool for cost management. Annals of Eftimie Murgu University Resita, Fascicle II. Econ. Stud., 338-342 (5 pages).

Suherman, M.; Firmansyah, I.; Almunawwaroh, M., (2019). Determinants of sharia insurance company profitability. AFEBI Accounting Review (AAR): 4(1): 41-49 (9 pages).

Swafford, P.M.; Ghosh, S.; Murthy, N., (2006). The antecedents of supply chain agility of a firm: scale development and model testing. J. Oper. Manage. 24(2): 170-188 (19 pages).

Tallon, P.P.; Pinsonneault, A., (2011). Competing perspectives on the link between strategic information technology alignment and organizational agility: Insights from a mediation model. MIS Q., 35(2), 463–486 (24 pages).

Tan, F.T.C.; Tan, B.; Wang, W.; Sedera, D., (2017). IT-Enabled operational agility: An interdependencies perspective. Inf. Manage. J., 1–54 (54 pages).

Tseng, Y.H.; Lin, C.T., (2011). Enhancing enterprise agility by deploying agile drivers, capabilities and providers. Info. Sci., 181: 3693–3708 (16 pages).

Tucker, M.L.; Meyer, G.D.; Westerman, J.W., (1996). Organizational communication: Development of internal strategic competitive advantage. J. Bus. Commun. 33(1): 51-69 (19 pages).

Yaghoubi, N.; Tajmohammadi, N.; Setia, P.; Sambamurthy, V., (2011). Review and ranking e-‌commerce characteristics on e-commerce application in insurance industry. Interdiscip. J. Res. Bus., 1(1): 95- 98 (4 pages).

Yan, T.; Schulte, P.; Chuen D., (2017). Handbook of Block chain, Digital Finance, and Inclusion. Elsevier Science Publishing Co Inc.

Yang, C.; Ming, L.H., (2012). Boosting firm performance via enterprise agility and network structure, Manage. Dec., 50(6): 1022-1044 (23 pages).

Yaseen, S.G.; DaJani, D.; Hasan, Y., (2016). The impact of intellectual capital on the competitive advantage: Applied study in Jordanian telecommunication companies. Comput. Hum. Behav. 62(1): 168-175 (8 pages).

Letters to Editor

IJIR Journal welcomes letters to the editor for the post-publication discussions and corrections which allows debate post publication on its site, through the Letters to Editor. Letters pertaining to manuscript published in IJIR should be sent to the editorial office of IJIR within three months of either online publication or before printed publication, except for critiques of original research. Following points are to be considering before sending the letters (comments) to the editor.

[1] Letters that include statements of statistics, facts, research, or theories should include appropriate references, although more than three are discouraged.

[2] Letters that are personal attacks on an author rather than thoughtful criticism of the author’s ideas will not be considered for publication.

[3] Letters can be no more than 300 words in length.

[4] Letter writers should include a statement at the beginning of the letter stating that it is being submitted either for publication or not.

[5] Anonymous letters will not be considered.

[6] Letter writers must include their city and state of residence or work.

[7] Letters will be edited for clarity and length.

Name *

Email Address *

Affiliation *

Comments *

Security Code *

Iranian Journal of Insurance Research

The impact of electronic insurance implementation on agility, competitive advantage and profitability of selected insurance companies in Iran

References

References

Letters to Editor

Send comment about this article

Volume 11, Issue 3 - Serial Number 41
July 2022
Pages 199-212

The impact of electronic insurance implementation on agility, competitive advantage and profitability of selected insurance companies in Iran

References

References

Letters to Editor

Send comment about this article

Volume 11, Issue 3 - Serial Number 41July 2022Pages 199-212

Volume 11, Issue 3 - Serial Number 41
July 2022
Pages 199-212