Impact of Brand Dynamics on Insurance Premiums in Turkey

TL;DR

This study investigates how brand trust and value influence insurance premiums in Turkey, revealing trust as a major driver and indicating customer loyalty and momentum effects in premium production.

Contribution

It introduces a dynamic GMM panel estimation to quantify the impact of brand trust and value on insurance premiums in Turkey, highlighting trust as the primary factor.

Findings

Brand trust increases premiums by 5.32 million TL per unit.

Brand value has a limited impact, with 1 million TL increase raising premiums by 0.02 million TL.

Past premium production strongly influences current premiums, indicating loyalty and momentum effects.

Abstract

This paper examines influences of brand dynamics on insurance premium productions in Turkey using a dynamic GMM panel estimation technique sampling 31 insurance firms over 2005-2015. The results reveals that brands trust appears as a chief driving force behind premium production where its unit increase augments premium outputs by 5.32 million Turkish Liras (TL). Moreover, the brand value of firms also appears a statistically significant determinant of premium sales, but its size impact remains limited comparing to brand trust, i.e. a million TL increase in brand value generates only 0.02 million TL increase in sales. On the other hand, the study also documents a strong momentum driven from past years premium production with trade-off magnitude of 1 to 0.85. This might imply a higher loyalty-stickiness of customers in Turkey, as well as a self-feeding "bandwagon effect".