The concept of value within the corporate insurance market : an analysis of the 5-star hotel industry in Malta

Abstract

Purpose: The purpose of this study is to analyse the value given to an insurance product in the high-end hotel industry (5*). In this industry the estimated maximum loss (EML) is relatively high and therefore this makes the product very critical for the industry in question. Design/Methodology/Approach: This study starts by forming solid foundations through literature based on factors on which value is contingent in business to business scenarios. The insurance industry in Malta will also be recounted to provide the reader with a solid understanding of the industry scenario and its players. Methodologically, the research will follow the patterns of first relying on findings gathered through industry suppliers in order to formulate a sufficient research base to tackle the issue at its core; the 5* hotel operators. Such Research will be analysed through in-depth interviews with both the service providers, in order to extract the major determinants on which assignments of value are given, and the customer. Findings: From the findings obtained throughout the study, it is evident that price is the major value driver within the industry. The relationship aspect is not very much considered by clients as a part of the value bundle. Research Limitations/Implications: The findings of such study will highlight key areas which are important determinants and drivers of value, and what part they play in the purchasing process of an insurance product. The research has its own limiting factors, including: - Cost and time considerations; - The recipients of the interviews were not in a natural dealing environment, implying pressure to get a deal through due to deadlines, and they were more at ease with the different scenarios presented; - An element of interview bias is not excluded; - Not all variables on which value is determined were explored. Practical Implications: Such arguments may be taken on board by insurance companies, agents and brokers alike, which through the services they offer, target the population this study is based on,, amongst others, and use them as a tool to effectively mould their solutions. Knowing what a client values most in their transactions is key for the supplier to adopt a suitable tactic and strategy when targeting the said audience. Originality/Value: The results of the study will have considerable high relevance to insurance suppliers. This is due to the fact that in the luxury high-end hotel industry there are a limited number of major operators, and thus a high response rate is recorded. Therefore the accuracy of the study is somewhat steep.