An Empirical Analysis Of The Service Quality In the Automobile Insurance: A Log-Linear Model

Abstract

The study deals with the consumer satisfaction and the service quality of the private passenger automobile insurance that accounts for over 40 percent of the total premiums written in the US property and casualty insurance industry.  It is designed to identify the characteristics that influence the service quality of automobile insurance.  The independent variables of the model are identified and explained along with rationale and hypothesized signs.  Complaint ratios are used as a proxy to measure the service quality of automobile insurers.  The Illinois insurance market is characterized as easy regulation whereas in New Jersey the regulatory environment restricts competition.  Therefore, the model includes a state dummy variable to find if a different degree of regulation can affect consumer satisfactions.  The basic research question in the study is to know what types of firms are likely to produce more or less consumer complaints.