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Millennial Generation


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Chapter 1 Introduction

1.1 Overview

The current world that we live now is being strongly influenced by the high technology waves. This kind of waves are altering our operations in business sectors like finance, economic, accounting and as well as insurance. Internet and its connectivity are increasingly important as the role of connecting people all over the world in the most cheapest and efficiency way. It is now become a necessary in all the people's lives. According to the research, there are around 9.3 million people in Malaysia age 15 and above using internet at home or work locations, each of them consuming average of 1,066 pages of content and spending 14 hours online in June, 2009 (Comscore,2009). Internet is a new distribution channel for businesses to market and promote their products and services in order to increase their revenues, profitability and customer's loyalty. For successfully enter and adapt in the new evolution of technology and electronic, businesses had change their operation structures into technology-intensive based. Some businesses from shops to financial institutions even changed most of their products and services into E-based products or services.

Generation Y also can be known as “Millennial Generation”. From its name, it obviously stated that this generation closely related to high technology and digital electronics. This generation mostly owned computer and have higher education. They frequently used high-technology products and services and they willing to be the innovator for using new E-product. Generation Y is an influential factor towards the future development in E-based services and products. Therefore, most businesses will focus their customer target on generation Y in the coming years.

We are now entering into new phase of technology and electronics. With trimness of electronics technology many electronic tools and gadgets have become increasingly personal and portable. It makes people can surf net whenever and wherever they are. The conveniences of communication and networking have stimulated the growth of E-commerce. E-commerce can be translated as any form of businesses that using information technology for transaction. In order to stay ahead in millennium age, most of the companies used E-commerce regardless of business to business (B2B) or business to customer (B2C) or even customer to customer (C2C) (Ahonen, 2004). Services sector like banking also promote internet banking or online banking to facilitate their efficiency in the banking transaction. Online banking can reduce some unnecessarily procedures and provides convenience to customers. Yet insurance industry has been lagging behind others services industries in adapting new technology era. In addition, there are many researches done for investigating the factors that affect adoption of internet among different sectors in Malaysia (Stevens, 2002; Soliman, 2003; Wirtz, 2001; Coltman, 2001), but empirical data for e-insurance was limited due to insurance industry has been slow respond to e-commerce compared to other financial services (Esters, 1997).

Insurance institutions have the direct competition with banking and financial institutions. It is the great time for insurance companies to utilize the convenience of communications and networking in establishing direct interface with customers. E-insurance is broadly defined as distribution of insurance services through information technology. The direct channel can eliminates the intermediaries, provides more efficiency, lower cost and more value added to the customers. Other than online purchases, E-insurance can offer varied types of services like online payments, register claims, review claims and renew insurance policy. Besides that, e-insurance also can reduce the level of management hierarchy and internal administration cost by automating all the business processes. There are some limitations of the regulatory for fully applied the e-commerce in certain countries. However, the insurance legislation world wide has been continuously updated and modified to fulfil e-insurance metrics (Ahonen, 2007).

This study examines the perception and expectation of generation Y towards E-insurance. It discusses about the existing e-commerce applied in insurance industry and the expectation of generation Y on the improvement in E-insurance in the future. The new high technology and electronic era started, it links the generation Y and the insurance industry together. It is important to examine the relationship between generation Y and E-insurance. Generation Y act as knowledgeable customers, they are pursuing simple, convenient, fast and efficiency services at lower prices. Therefore, it is the need for insurance companies to introduce E-insurance that satisfied the customer's need.

1.2 Statement of problem

E-commerce had widespread all over the various business from education to real estate sector. It will continue to grow up unabatedly because information is now the lifeblood of successful business. The importance of e-commerce can be seen from the Ninth Malaysian Plan (2006-2010); Malaysian Government has allocated RM 12.9 billion for developing e-commerce. According to the survey conducted by Nielsen Company (2007), there are 70% of internet users in Malaysia purchased online at some point in past. So there are many potential opportunities in e-commerce nowadays. Internet and electronic communication enables companies exchange or transfer their information to the other part of the worlds without boundaries. E-commerce also provides a new distribution channel for businesses to deliver their products or services to customers more efficiency and fast. Meanwhile, companies can connect their customers worldwide in real time. It can establish long term relationship with their customers. Since there are many advantages in adopting e-commerce, yet, not all businesses can successfully fully applied e-commerce especially insurance industry. Insurance industry has been lagging behind in the adoption of e-commerce. There are some barriers on adoption of e-commerce in insurance industry.

All the business sectors included financial services sectors have been revolved to new e-commerce era because of the domino effect of globalization and liberalization around the world since 1990s (Piercy, 1999). New entrants of e-retailers of financial services sectors lead to intense competition among financial services providers. There is a need to improve service quality of their service in order to survive in the global market place. Yet, consumers are less likely to purchase online than expected in despite of the huge investments in online banking (Sarel & Marmorstein, 2003; Wang, 2003). Better understanding of factors that affect customers' acceptance on using internet banking is prerequisite of obtaining success in conducting e-commerce. However, lack of research on perception of consumers toward e-insurance in Malaysia.

Another important issue is consumers feel unreliable towards security and privacy of e-commerce website (Järvinen, 2001). Insurance policy requires exchanges of huge amounts information between the parties. Electronic exchange data or information that needed in insurance policy is an ideal way because Internet enables transfer data over worldwide. Yet the only concern is the private confidential of the data when it is being transfer through internet or any other electronic method. Because of the anonymous nature in internet, insured unable to ensure the data is transferred to the right person. In electronic environment, there is no guarantee of the data or information that being transferred is sealed and did not review by others. In addition, electronic exchange data can cause security problems like customer database may be hacked by someone who has negative intention. Furthermore, electronic documents without physical signatures are easily being pirated. According to Forrester research 2001, the main reason (59%) of young consumers not purchase online is concern about the use of credit cards online and the second reason (47%) is concern about the privacy of the data they sent out to website. Besides, about 75% of US consumers of the Boston Consulting Group's survey are concerned about the degree of security and privacy provided in electronic environment (Goldman, 2001). There is a need for insurance companies to solve this problem by review other banks in gaining consumers' trust towards online services (Mattila, 2003).

In Malaysia, government had encouraged the development of E-insurance since January 2005. Persatuan Insurans Am Malaysia (PIAM) released the news of motorists will be the main beneficiary of the JPJ's e-Insurance Project with effect from 1st January 2005. On 5th October 2004, Minister of Transport was launched an IT-based service with the full support of the JPJ, general insurers and takaful operators. The e-Insurance enables insurance companies to enter their policyholders' motor insurance details and transmit them electronically to JPJ's computer database for processing. With full implementation of e-Insurance, it minimizes the problems like long queues at the JPJ counters, shortening waiting times at the JPJ counters, reducing the need for repetitive capture of data will also ensure accuracy and consistency of data in JPJ's database and eliminating physical motor cover notes will help resolve the problems of forged cover notes as well as reduce document inventory (PIAM, 2005). E-insurance has brought to us many benefits but it still uncommon in Malaysia.

E-commerce has brought a lot of questions. Is insurance industry suitable to apply e-commerce? How E-insurance ensured security and privacy of insured's information and data? What are the expectations of generation Y towards future E-insurance? How generation Y perceived adoption of E-insurance? Is adoption e-commerce an advantage or disadvantage for insurance industry? This study wants to lift up the veil of E-insurance.

1.3 Research objective

The general objective of my study is to investigate the perception of generation Y towards E-insurance. The other objectives are:

1.) To study awareness and expectation of generation Y towards E-insurance.

From this study, we want to know the high education generation Y perceived E-insurance. E-insurance is important for insurance industry in step out the first step of pursuing low cost customer services. Generation Y are their priority target of E-insurance's product because generation Y have much of knowledge in computer. Generation Y treated as the future talented human capital of a country. They are high education and expertise in using computer. Therefore, their expectations and future requirements about E-insurance are important success factors of insurance industry.

2.) To examine the adoption of e-insurance in Malaysia

E-insurance has not fully implemented in Malaysia. It is crucial to examine the current situation of adoption on e-insurance in Malaysia.

3.) To investigate the factors that can influence the perception of generation Y towards E-insurance and the adoption of e-insurance

To establish long term relationship with customers, it is critical to investigate all the possible factors that may affect the views of the potential customers towards E-insurance. A good service is able to satisfy all the customers' need.

1.4 Significance of study

Insurance is essential for everyone. It provides a sense of security and peace of mind to us. It also provides financial stability to individual and businesses if insured risk occurs such as flooding, fires, accident or ill health. Insurance is a major component of financial sector. Nowadays, the adoption of e-commerce in financial sector has become obvious. Yet, the insurance sectors are lagging behind. This is mainly due to the complicated transaction involved in insurance industry. This study is aim to investigate the perception and expectation on generation Y on electronic insurance services as well as their willingness to accept E-insurance.

Insurance industry in Malaysia have not fully implement e-insurance yet. Most of the consumers feel uncertainty towards this new e-commerce and some even do not aware about this. We are able to know the degree of awareness of generation Y towards e-insurance from the research. Generation Y are potential customers for e-insurance, their awareness of e-insurance is important to the development on insurance industry. According to previous research, it also showed that younger and high educated males with high level of income have higher probability to use internet banking services (Devlin & Yeung, 2003). E-insurance also can be categorised as one kind of internet banking services, so perception of younger internet users towards e-insurance is important.

The effect of liberalization and globalization around the world influenced the business sectors in Malaysia significantly. Liberalization allowed business transactions can be conducted cross over the boundaries of countries freely. E-commerce should be developed in Malaysia in order to gain the global competitiveness. Compared to other developing countries, Malaysia is lagging behind. In order to compete with other countries, Malaysia government need to support organization in adapting the changes in term of technological. E-commerce provides a new distribution channel for products and services which able to help companies deliver their products and services to customers efficiently all around the world. Although e-commerce provides many competitive advantages for business sector, however, insurance industry in Malaysia still have not implement the electronic insurance completely. It is necessary for government to generate effective strategy for establishing e-insurance in Malaysia. The antecedent of effective strategy is to obtain a clear understanding of perception of customer towards e-insurance. This study benefits government in term of more understand the customers' need towards e-insurance, so government and business sector can complement with each other for establishing e-insurance in Malaysia successfully.

Service itself is considered as interactive process whereby customers involved in the production process. Insurance is one kind of this service. Since insurance is an interactive process, customers' viewpoint on the new electronic insurance must be paid with full attention. This study focuses on generation Y's response on the development of new electronic insurance because most internet users are generation Y now. With the generation Y's future wishes for electronic insurance, a user friendly and suitable E-insurance concept can be developed. This study also benefits insurance companies in developing the electronic insurance service which can satisfy customers' need. A well-developed e-insurance service can meet customers' requirement and increase their satisfaction. The speed of adoption on e-insurance in Malaysia will be improved.

Society also benefited from the study because adoption in e-insurance enables them to access the insurance services through internet whenever and wherever they are. The success of establish e-insurance in Malaysia will bring many advantages to customers. E-insurance provides longer operation time, convenience, less transaction cost needed, and less processing time to customers. E-service has changed the way of people organize their lives. It enables people to make comparisons among the products or services through internet. The study also examines the customers' concern towards security and privacy of e-insurance. Hence, after completed the study, the security and privacy of e-insurance systems can be enhanced according to the concern of society.

This study investigate the relationship between generation Y and E-insurance and their expectation and perception on E-insurance in order to better establish a new era electronic insurance and to maintain long term relationship with customers.

1.5 Organization of study

In chapter 1, the research begins with brief introduction to the topic “perception and expectation of generation Y towards E-insurance”. In the introduction, it briefly explained the term of e-insurance and generation Y and the relationship between them. After we have some basic ideas about the topic, problem statements of the study developed. The issues of e-insurance were addressed in the study. Objectives of the study are stated down and followed by explaining significant of study.

Chapter 2: Literature review

2.1 Services and Goods

Goods can be defined as physical products that being produced and sold to the market (Winsor, Sheth & Manolis, 2004). In addition, goods also considered as something physical and tangible in nature that customers can feel, smell, taste or hear it prior purchase or make consumption (Rathmell, 1966; Shostack, 1977; Zeithaml, 1985). On the other hands, services are totally opposite to the characteristics of goods. Services normally are classified under intangible characteristics which cannot be touched, smelled, tasted, hear by customer before purchase and make consumption. Furthermore, services also can be classified as a product, a process involves of many activities and can be produced and consumed at the same time, and to some extent customers may participate in the service production process (Grönroos, 2000). One of the researchers defines service as something can be bought and sold but which you cannot drop on your feet, this definition points out intangible characteristics of service (Gummesson, 1987). Besides that, service also defines as an act that offered by other party (Lovelock and Wright, 2002).

There are four main attributes that help in distinguishing between goods and services namely, tangible or intangible (the degree of physical feature), separability or inseparability (the degree of linkage between the product or service and providers and customers), variability or invariability (the degree consistency of the products or services attributes) and perishability (the degree of capacity for being stocked) (Berry, 1980; Fisk, 1993; Gronroos, 1998; Kotler, 1994; Shostack, 1977; Zeithaml, 1985). From the four main attributes, it clearly states that the things that classified as services only when it fulfilled the four main characteristics of intangibility, inseparability, variability and perishability. For example, hair cut service, it does not provide any tangible product to its customer but only intangible service, throughout the hair cut service, it need participation of customer, the hair cut services are inconsistency in quality and it cannot be stocked.

Furthermore, among the four attributes of differentiating the goods and services, the intangible characteristic is the best definitive for services (Bateson, 1977; Bebko, 2000; Berry, 1980; Levitt, 1981; McDougall & Snetsinger, 1990). Various definitions that used to define services stated above are prefers to include the intangibility features into the statements. Hence, intangibility characteristic of service is the most representative attribute for services in order to distinguish goods and services. However, the tangibility feature is becoming less useful and less definitive for distinguishing between goods and services in digital environment (Rust & Oliver, 1999). This is due to digitized goods are consists of both tangible and intangible characteristics. For examples, online purchase DVD is intangible in nature because customers cannot touch or feel the product before the actual tangible product received. The development of electronic environment has blurred the clear distinction between goods and services by using intangibility attributes.

In order to fill up the inadequacy of tangibility criterion, another framework which used four types of utilities to differentiate goods and services has been developed (Winsor, Sheth & Manolis, 2004). The four types of utilities are time, place, form and possession. All retailers will provide time and place utilities to customers, the only differences can be make between goods and services is in term of form and possession (Rathmell, 1966; Hsieh & Chu, 1992). Physical goods will only contributing little form utility for customers compared to service whereas the permanent of transfer of possession utility only completed when customers are purchased physical products rather than services (Clemes, 2000). According to this framework, insurance is classified as hybrid retailing or a mixture of goods and services because it provides a moderate degree of form and possession utilities.

2.2 E-service

The new era of e-service has begun since the development of internet being introduced in 1994 (Ahonen, 2004). There are three phases of internet according to the previous research (Kalakota & Robinson, 2001). The beginning phase (1994-1997) is home pages and website of every company available. The following phase (1997-2000) is taking part into e-commerce in business. The last phase (2000-) which means the current situation is to satisfy online consumers and try to take advantages of internet. However, the development of e-service of our country is lagging behind when compared to other foreign country.

Although many researchers have defined e-service before, but there is no an exceptional definition for e-service. E-service can be known as a service that conducts through electronic method such as internet (Rust & Kannan, 2002). There is a difference between technology based service and e-service concept, the latter concept need to be carried out through online method whereas technology based services can be an ATM service. Both of the concepts are benefited from development of information technology (Järvinen & Lehtinen, 2003). In an electronic environment, the service concept is important because the nature of the services is abstract and where the relationships between partners and customers are virtual (Grönroos, 2000). Since electronic insurance services are perceived as complex and difficult to use, therefore clear and well defined service concept should be emphasized (Järvinen 2001; Ahonen & Salonen 2005).

There are four chosen characteristics, namely, intangibility, process nature, inseparability and interaction that used to test some selected e-services in previous research (Järvinen & Lehtinen, 2004). All e-services are intangibility in nature and remain intangibility if the consumers only search for information of particular product or service through online. There are only few services consists purely intangible characteristic. For example, previous studies stated that even financial services also aided tangible by their documents like loan agreement (Järvinen & Lehtinen, 2004). The characteristics of process nature also universal for all studied e-services which means that the customers need to be follow the specific procedures in order to get the services. Inseparability and interaction characteristics are deviated among different e-services (Järvinen & Lehtinen, 2004). Some characteristics of services in electronic environment have to be considered in order to shift the service concept to (Ahonen, 2004). For e-service, it seldom needs personal interaction when compared to telephone based services (Lovelock, 2002). However, the argument is human factor plays an important role in service recovery when technical problems happened (Järvinen & Lehtinen, 2004).

In addition, E-services can bring considerable profit for companies if they able to manage the e-service effectively. However, not all the products and services are suitable for online trading because internet as a marketing channel only able to realistically fulfill two out of five senses of customers which are sight and sound. Therefore, only products and services that fully utilize the two senses are suitable to sell online for example, CD (Stern, 1995). According to other researcher, Peterson (1997) suggested that the suitability of the products and services to be sold online based on three dimensions:

(1) cost outlay and frequency of purchase;

(2) value proposition;

(3) degree of differentiation

Based on the study, products and services that have low cost, high frequency in purchase, intangible value proposition and high degree of differentiation are more suitable to market through internet (Phau & Poon, 2000). Is insurance suitable to sell online? Regarding to the three dimensions above, insurance has fulfilled two dimensions which are intangible value proposition and high degree of differentiation because insurance is considered as a customization service. Hence, insurance is considered suitable for marketing through internet.

For successfully implement e-service, it not only depends of the suitability of the products and services but also depends on the customer's perception towards e-service. Based on previous studies, the overall satisfaction of customer towards e-service can be improved through various factors which included convenience, saving time and money, ease of use, financial security and web site designed to be fun (Szymanski & Hise, 2000; Meuter, 2000). Customers' satisfaction is important determinant of successful e-service (Parasuraman & Grewal, 2000). In order to successfully implement e-insurance in Malaysia, those factors also included in this study to determine adoption of e-insurance.

2.3 Insurance

Insurance is defined as the evenhanded transfer of the risk of a potential loss, from one entity to another, in exchange for a premium and duty of care (Wikipedia, 2005). Insurer is the company that sells the insurance, and the insured is the party who buy the insurance. Insurance rate is the amount charged for a certain value of insurance. Insurance sold to consumers directly is known as direct insurance (Skipper, 1998). Meanwhile, direct insurance also can be defined as a service with particular terms and conditions agreed in an insurance policy. On the other hands, one of the researchers stated that part of the insurance service is to maintain a long term relationship between customers and insurance company rather than only holding legal responsibility with customers (Järvinen, 1996).

Intangibility, inseparability, perishability, heterogeneity and lack of ownership are characteristics of services (Cowell 1988; Zeithaml & Bitner 1996). However, all these characteristics do not followed by insurance service. The tangibility of insurance services achieves through a physical paper of an insurance policy including a promise to pay compensation if a certain unforeseen event takes place. The insurance policy symbolizes the only evidence of that promise until losses occur (Majaro, 1982; 1985). In fact, no policyholder would prefer to have any losses, and thus we can conclude that consumers only purchase merely security or protection for their safety instead of compensation of losses. So, as a result it is in force to cause consumers consume insurance whole period that is a continuous consumption, but production is cross-sectional and dependent of the interaction of the consumer and the insurance company. Therefore, insurance service only partially fulfilled the characteristic of inseparability.

One of the unique natures of each service is heterogeneity on its part. There are various alternatives of insurance for consumers to choose which insurance policy is suitable for them but the terms and cover of most of the insurance is standardized (Järvinen, 1998). In case of e-insurance, the heterogeneity part of the personal service forms the only unique part of insurance is eliminated. The back-office resources in insurance that used to balance the capacity can avoid perishability. As a result, large part of activities in E-insurance can be carried out without consumers' existence and participation. Lastly, as regards to ownership, insurance holders actually own the partial ownership of the service because they reserve the right for claims settlements that will be paid from the reserves in the balance sheet of an insurance company by paying premium (Järvinen, 2000). This means that insured consumers 'own' their part of reserves, and that principle is based in Insurance Act. Consequently, we can conclude that the insurance service is quite specific from other services because it only fulfilled partially of the common service characteristics.

One of the financial services is insurance, it seems to have different user frequency when compared to other bank services (Järvinen, 2003). Specifically, consumers may have bank transactions weekly, but in case of insurance issues, such as risk analysis and insurance cover or claims applications, occur quite infrequently and with low frequency (Ahjos, 1999). Hence, there may be only one occurrence within few years, and that is premium payment. Thus, insurance deviates from bank services and in the case of Internet which means that consumers may never get used to e-insurance, because their actions are needed too rarely. Low frequency and infrequency may also be reasons that obstruct the consumers' engagement, which may become the crucial point in developing e-insurance.

Generally, insurance services is quite different from others banking services. Insurance companies have to take care of every step in implementing e-insurance successfully. This study is tries to unveil the mystery of insurance services in Malaysia.

2.4 Insurance in Malaysia

The beginning of insurance launched in Malaysia can be traced to 18th and 19th centuries which transformed from the agency houses that acted as representative of insurance companies in United Kingdom. Hence, the insurance industry has been strongly influenced by the British insurance system and continued until today. At that time, almost all the insurance companies were established by foreign insurer. Domestic insurance companies were only being introduced in Malaysia after Independence Day. However, domestic insurance companies have faced failure and wound up due to inadequate technical and sound operation in the early 1960. To solve this problem, Malaysian government enacted insurance Act 1963 to regulate insurance industry which functioning under Ministry of Finance. The Insurance Act 1996 has replaced the Insurance Act 1963 on 1st January 1997 in order to supervise and regulate insurance industry more effectively (Ahmad & Sungip, 2008).

Basically, there are three types of insurance industry in Malaysia which included life insurance industry, general insurance industry and Takaful insurance industry (Aini & Tee, 2003). Life insurance is insurance policy that covers variety of contingencies event occurred on human life whereas general insurance is all types of insurance policy except for life insurance. On the other hands, Takaful is insurance which based on Islamic principles (EconomicWatch, 2009). There are five main statutory insurance associations in Malaysia namely, Persatuan Insuran Am Malaysia (PIAM), Life Insurance Association of Malaysia (LIAM), Persatuan Insuran Kebangsaan Malaysia (NIAM), Insurance Brokers Association of Malaysia (IBAM) and Association of Malaysian Loss Adjuster (AMLA) (PIAM, 2009). Each statutory insurance association has different function. PIAM is an association of general (non-life) insurers, LIAM is an association of life insurers, NIAM is represents locally incorporated insurer with more than 51% Malaysian equity, IBAM is an association of insurance brokers, AMLA is an association of insurance brokers.

Insurance companies in Malaysia were only started to conduct e-commerce in 1999 which was much slower when compared to other developed countries. During that period, Bank Negara Malaysia has allowed some of the insurance companies to establish Malaysia first interactive insurance website which enabled insured can make online payment and renewal of motor vehicles' insurance policy. Till April 2000, Bank Negara Malaysia allowed a full range of life, general and Takaful insurance product to be purchased or renewed online (BNM, 2000). Besides, Malaysian government has strongly encouraged business sector to participate in e-commerce included insurance industry through grants loan to the companies which wanted to start e-commerce in Eight Malaysian Plans. The rapid development of electronic market has revolutionized insurance industry in Malaysia to a more profitable segment. For general insurance sector, Malaysian government implemented JPJ eInsurans which allowed electronic payment of road tax renewal to Road Transport Department to eliminate the fraud cover notes for protecting vehicle owners in January 2005 (PIAM, 2005).

In the financial stability and payment systems report (2008), some of the insurance companies have utilized the direct credit payment system instead of using cheques. Furthermore, some insurance companies have cooperated with bank to further facilitate payment of premiums by policyholders for wider range of insurance products. The transactions of insurance premiums payment through internet have increased about 28.1% to 914,294 transactions in 2008 whereas the payment made through direct credit payments system also increased significantly. Based on facts above, insurance industry in Malaysia has started their way to e-commerce model. This research helps to further enhance the development of e-insurance by investigating the important factors that affect adoption of e-insurance.

2.5 E-insurance

The customary insurance, according to many leading insurers, cannot assurance the risk management and cover the web companies' needs for insurance (Kesan, Majuca & Yurcik, 2004). There are many definitions for e-insurance. E-insurance can be broadly classified as application of information technology on insurance services distribution (Banan & Sadeghi, 2009). E-insurance also can be defined as insurance services transactions which conducted online (Ahonen, 2004). As a result, E-insurance is useful to complement the needs of insurance coverage for the network transactions. E-insurance extended can offer insurance coverage through the internet for both traditional and network transactions (Baur, Birkmaier & Rüstmann, 2001). E-insurance provides the web-based enterprises with the coverage they are looking for. More specifically, it provides coverage for loss due to legal claims, malevolent hackers, crackers, viruses, employee incapacitate, counterfeit activities, damage/destruction of data or computer programs and security breaches (Thieme, 2001).

The products sold through Internet can be divided into two groups: High Interest and Low Interest products. High Interest products are meaningful to the consumers either because of price, importance or number of alternatives. (Keskinen, 2000) The decision making process can be characterized as time taking compared to Low Interest products, which often are bought as a result of habitual buying behavior. In case of High Interest products, Internet can be used as an information source, although the actual purchase is made through traditional channels (Keskinen, 2000). On our opinion, insurance can be seen as High Interest product, and thus it is unlikely that consumers will, at least in the near future, buy insurance through Internet, but uses it rather for finding information, making comparisons and evaluating the offerings (Harrington, 2001).

Consumers would like to have more insurance information and more insurance options through internet surfing especially in premium levels, their own insurance cover and various kinds of modifications. As a conclusion, the E-insurance is slowly replace the traditional way of selling insurance since most consumers especially generation Y search and compare various alternatives with the assistance of internet. Even negative purchase decisions also not an exception; it may be based on basic information gathered from Internet (Trembly, 1998). A researcher noticed that in the research of elderly consumers (age over 60 years) and families with children, that none of the elderly consumers use Internet, even though some of them have free access to Internet at home (Tuorila, 2001). Instead, Internet used by all studied families frequently for various purposes; they use e-mails, attend chatting, seek information, check timetables, use library and other public services, and do shopping.

In addition, studied families were willing to use e-banking services, but they take up a dubious attitude for e-insurance. The main reason behind is lies in the complexity of insurance products, and their feelings of the need of insurance professionals to explain all the complicated details before making their decisions on buying particular insurance policy (Tuorila, 2001). From previous study, most consumers are dissatisfied with e-insurance services because of lacking user friendliness (Maurice, 1998). Furthermore, consumers argue that experienced service does not meet their expected quality of service. Web pages that are ease to use, contain adequate information of various insurance lines and let consumers themselves do their own purchase decisions are consumers preferences. However, one third of the respondents are in principle willing to buy insurance from Internet, particularly motor, home, health and life insurance

Similar attitudes are revealed in the study, namely none of the respondents in the research have the experience of purchasing insurance from internet, and even though one of them intended to do so but before he made his decision he would like to call the insurance company and asked further information about the insurance (Järvinen, 2001). The insurance was underwritten during the phone call. This particular situation unveils weakness of e-insurance because insurance requires personal interaction in time basis. As far as e-insurance is concerned, consumers hope to have more simple insurance terms and conditions, and all information should include only fundamental details that should be given by using the language familiar to regular consumers. In addition, consumers wish e-insurance to be developed consumer oriented way, expect in time interaction during Internet transactions and need to be taught as e-insurance users.

From the previous study, the researcher found that most of the consumers have not prepared to purchase insurance policy through online methods although they have the intention to do that (Järvinen, 2001). The insurance websites contain various information and functions among different insurance companies but not all types of wholes insurance policy can be covered through internet (Järvinen, 2001). More contents and information provided by the website to the consumers has become the critical point for convince consumers in choosing e-insurance (Kalliomäki, 2000).

According to research done by Anargiridou, Anargiridis & Papadopoulos (2008), there are several advantages for E-insurance:

(1) Greater facility to customers due to extend operational hours.

(2) Insurance packages available globally.

(3) Accessibility to a large numbers of insurers.

(4) Less time consuming.

(5) Possibility of anonymous insurance.

(6) Lower market entry barriers for start-up insurance companies.

The major advantage of e-insurance will be convenience to customers. They able to renew policy, pay premium, buy new insurance policy or even compare the cost of insurance among several insurers whenever and wherever they are.

This research is aim to investigate the perception of generation Y towards e-insurance. Barriers to engage in e-insurance need to be clearly understood before adoption of e-insurance launched in Malaysia. Adoption is a process of knowledge, persuasion, decision and confirmation that customer need to go through before adopt a product or service (Rogers & Shoemaker, 1971). In order to complete this research, the previous research model namely extension technology acceptance model (Tero, Kari, Heikki & Pahnila, 2004) which used to investigate customer adoption on online banking was applied in this research. This model is modified into the research context. The variables used in the study are perceived ease of use, perceived usefulness, perceived enjoyment, information on e-insurance, security and privacy and quality of internet connection.

2.6 Technology Acceptance Model (TAM)

Several studies have been done for identify key factors that affect willingness of consumers to adopt online services provided by financial sectors (Hewer & Howcroft, 1999; Ba, 2001; Bradley & Stewart, 2002; Ramaswami, 2001; Lassar, 2005). Besides, a number of theoretical models have been developed to investigate human behavior towards new technology and internet adoption such as Roger's innovation adoption theory for internet banking (Kerem, 2004), technology acceptance model (TAM) (Davis, 1989; Mathieson, 1991; Davis & Venkatesh, 1996; Gefen & Straub, 2000; Al-Gahtani, 2001), theory of reasoned action (TRA) (Yoh, 2003), theory of planned behavior (TPB) (Ajzen, 1991). This research focused on the TAM model which is widely used by other researcher to explain the factor may affect consumers' acceptance towards technology based product or service. TAM model is recognized as a popular and powerful theory because it able to explain why the specific technology can succeed (Venkatesh & Morris, 2000).

Technology Acceptance Model (TAM) is a development of theory of reasoned action (TRA) (Ajzen & Fishbein, 1980). TAM is specifically tailored to explain consumers' adoption or acceptance of information technology. It is a behavioral model that widely used in investigates the factors of the adoption of information technology and it considered as a well-established and robust tool to explain the relationship between usage intention and behaviour (Agarwal & Prasad, 1999; Davis, 1989; Mathieson, 1991; Venkatesh & Davis, 2000). Both of the TRA and TAM theories postulates the causal chain of belief-attitude-intention-behaviour to investigate the user's acceptance of information technology (Davis, 1989).

From the figure 1 above, there are six constructs in the TAM, which are external variables, perceived usefulness, perceived ease of use, attitude, behavioral intention and actual usage. Perceived usefulness and perceived ease of use are the two main determinants of user behavior towards information technology (Adams, 1992; Davis, 1989; Mathieson, 1991). Perceived usefulness is described as potential users' perceptions that the specific information technology will enhance the job performance whereas perceived ease of use is defined as potential users' perception that the information technology is free of effort (Davis, 1989). In the TAM framework, it is clearly showed that perceived usefulness is directly influence the behavior intention to use the system, on the other hand, perceived ease of use affect the intention to use indirectly through perceived usefulness and attitude towards using. This model stipulates the actual system use and the behavior intention to use are determined by the attitude toward using the system and which in turn is depends on the perceived usefulness and perceived ease of use of information technology (Davis, 1989).

The TAM model concluded that perceived ease of use and perceived usefulness are closely related, and if the particular technology applied in the company is easily to use and it able to provide additional advantages to the company performance, the higher probable the attitude towards the technology is positive and the greater intention to use the technology (Davis, 1989). The relationship between the two determinants (perceived ease of use and perceived usefulness) and attitude towards using the new system are positive related in the theory.

Except for the two main determinants introduced as above, some other external variables also may affect the users' acceptance towards new technology. The external variables can be classified into three main categories which are consumer demographics, product category involvement and experience with technology (McKechnie, Winklhofer, Christine, 2006). Product category involvement can be considered as an important variable that may affect the willingness of online consumers accept the new technology because the more product information given by the site, less perceived risk with new technology and therefore consumers will feel more secure towards the transaction (Lockett & Littler, 1997, Ba, 2001). Past experience of using internet is the key factor to determine and investigate online purchase behavior (Montoya-Weiss, 2003; Novak, 2000; Balabanis & Vassileiou, 1999; Hoffman, 1999). If online shopping experience is positive, there will be higher probability to do online shopping again. Consumer demographic is the most common factor in assessing consumers' buying behavior. Previous research found that younger, better- educated males with higher income have more intention to use internet banking compared with others (Devlin & Yeung, 2003).

Instead of fully applied the TAM model into this research, modifications were made for some of the independent variables and add some different factors into the model framework. The TAM model only focused on investigate consumers' acceptance towards new technology based products or services which may not included online based service. Therefore, TAM model is deviated a bit from this study. In TAM model, it does not include the variable of security and privacy and this variable is important issue in internet environment. Exclusion such important variable from this study is not allowed. As a result, the extension of TAM model which developed by prior researcher was applied into this research. This extension TAM model consists of six main independent variables which are perceived usefulness, perceived ease of use, perceived enjoyment, information on online services, security and privacy and quality of internet connection (Tero, Kari, Heikki & Pahnila, 2004). E-insurance is one kind of online services, so this extension TAM model is suitable to be used in this study.

2.7 Perceived ease of use VS E-insurance

First and foremost, the first variable of in this research was introduced which is the most influential variable, perceived ease of use. In TAM model, perceived ease of use can be derived as the degree of the consumers perceived that the new technology system will be free of effort (Davis, 1989). Free of effort come from the word ‘ease', which means that the new technology is freedom from difficult when using it (Davis, 1989). Besides, perceived ease of use also can be referred to the degree of understandable and clear of the new technology system and effort required to get familiar with it (Ndubisi & Jantan, 2003). Internet also can be considered as a new distribution channel which strongly enhanced by new wave of technology. Previous studies found that intention of consumers to shop online is related to the perceived ease of use. If the website has been developed is user friendly, potential user will have more intention to use (Monsuwe, Dellaert & Ruyter, 2004). The term user friendly can be referring to accessibility (Wikipedia, 2009).

Investigate and understand how the variables ‘ease of use' affect consumer acceptance of using new technology is crucial for this study. Many researches have done on investigating online consumer behavior towards internet shopping by applying perceived ease of use as one of the independent variables. The technology innovations should have the characteristic of ease of use to ensure the customer adoption (Wallis report, 1997). For the research on internet banking, difficult to use of new technology innovation was one of the reasons for failure on internet banking (Dover, 1988). Regarding to TAM, ‘ease of use' is the antecedent of perceived usefulness; it affects the early stage of experience with a new technology or system (Davis, 1989). Perceived ease of use is positively influenced perceived usefulness (McKechnie, Winklhofer & Ennew, 2006). If the system is more easily to use, the more intention the user will use the system again and the first experience towards the system is positive. According to the previous research, there are three dimensions may influenced the ease of use of certain technology which are control, computer playfulness and computer anxiety (Venkatesh, 2000). Control relates to how a user can control the use of new technology, if the user able to assess and use the technology well, he or she will have more intention to try the new technology. Computer playfulness means those playful people are more willing to try new challenges and feel easy of the internet shopping. On the other hands, computer anxiety is refer to the degree of fear when he or she faced with new technology.

This research would like to investigate the perception of generation Y towards e-insurance. Insurance considered as a very complexity product for consumers. Applied internet technology on insurance will makes it more complicated than before. Complexity of e-insurance service is one of the issues addressed in this study. Most of the consumers fear of online insurance that hard to use and understand. Consumers usually would like to require professionals to explain the insurance product before they decided to buy however e-insurance is internet based which unable to provide personal interaction. Therefore, perceived ease of use is an important factor that affect consumer acceptance of e-insurance. ‘Ease of use' in this research context is perception of generation Y that using e-insurance free of effort.

2.8 Perceived usefulness VS E-insurance

Another important determinant included in TAM is perceived usefulness which is complement with the perceived ease of use. These two determinants are positively related with each other. Previous research proved that if the new technology system is easily to use, people will be more using it, the more using it will enhance job performance directly (Venkatesh & Davis, 2000). In term of organizational context, perceived usefulness can be defined as user's subjective probability of using specific application system will enhance job performance (Davis, 1989). A system with high degree of perceived usefulness will make users feel it can help them produce high performance (Davis, 1989). In simplified way, perceived usefulness can be known as people tend to use or not the particular system depend on its usefulness in increase job performance (Davis, 1989). Whereas in e-commerce context, perceived usefulness can be described as consumer perceived the useful of internet services can be a part of their daily routine (Kleijnen, 2004).

Consumer buying behavior can be determined by using motivation theory which includes intrinsic motivation and extrinsic motivation. Perceived usefulness is considered as one kind of extrinsic motivation which means that consumers will be motivated to use new technology because of its usefulness that able to bring them benefit in enhancing job performance (Davis, 1992). Previous research also showed that there is a positive relationship between perceived usefulness and internet usage (Teo, Lim & Lai 1999). Besides that, one of the studies examined that the intention to use online shopping and the result of the study showed that perceived usefulness is directly influence the attitude towards online shopping (Vijiayasarathy, 2004).

In this research context, perceived usefulness is the degree of benefit provided by e-insurance to the consumers in daily life when they used it. From the above studies done by previous researchers, there is no doubt to say perceived usefulness is positively influence the consumers' acceptance of new technology. The new technology can be the internet usage, computer, website and others. E-insurance is one kind of internet service; therefore perceived usefulness of the e-insurance affected the intention of consumers to use. The study of online shopping proved that if the services provided by the online retailer meets consumers' expectation, consumers' perceived usefulness of the online shopping is positive (Mathwick, 2001). Applied to this research, if the e-insurance services meet the consumers' expectation then consumer will have more intention to use e-insurance because of its usefulness. In addition, positive attitudes of consumers towards online services may be due when online information is similar to the information provided by brick-mortal store (Lee, Fiore & Kim, 2006). This statement can be applied to this research since the e-insurance also one type of online services.

2.9 Perceived enjoyment VS E-insurance

Same with the first determinant, perceived ease of use, perceived enjoyment is also considered as a form of intrinsic motivation. Perceived enjoyment can be defined as the perception or view of the consumer towards using certain new technology like computer is enjoyable for its own sake, apart from any consequences that may result (Davis, 1992). In context of online shopping, perceived enjoyment can be refer to the consumers' perception towards potential entertainment of online shopping (Monsuwe, Dellaert & Ruyter, 2004). Many researches found that enjoyment is a variable that will positively affect the attitude towards adoption of new technology (Davis, 1992; Childers, 2001). If customers found the internet shopping is enjoyable then they will more likely to adopt the internet shopping (Childers, 2001).

Perceived enjoyment can be related to time of use, frequency of use and daily usage. If the time spent on the internet is long which means the perceived enjoyment towards internet is high (Igbaria, 1995). Perceived enjoyment is not related to frequency of use and daily usage (Igbaria, 1995). In contrast, one of the studies showed that there are positive relationship between perceived enjoyment and frequency of internet use and daily usage (Teo, 1999). However, this study viewed that both of the time of usage and frequency of usage are positively influences the degree of perceived enjoyment on internet use. Individuals only spent long time with the technology which makes them feel enjoyable frequently. Perceived enjoyment also can be translated into perceived fun or perceived playfulness. Perceived playfulness is consists of concentration, curiosity and enjoyment (Moon & Kim, 2001). Besides, by creating more interactive features in the website will attract more online consumers, and their perceived enjoyment towards online shopping will be increased (Childers, 2001). In online shopping framework, the perceived enjoyment can be divided into three dimensions which are ‘escapism', ‘pleasure' and ‘arousal' (Menon & Kahn, 2002). Escapism is an escape from the unpleasant activities. Pleasure is the degree of joyful feeling. Arousal is the degree to which can makes people feels the state of being awake.

In this research framework, perceived enjoyment is the degree of joyful feeling of generation Y towards using e-insurance. If they feel using e-insurance is enjoyable and free of techno stress, they will more likely to engage in subsequent e-insurance services. Therefore, there is a significant positive relationship between perceived enjoyment and generation Y's acceptance on e-insurance. Just like the studies of online shopping, enjoyment is a strong predictor of generation Y's attitude towards e-insurance. Generation Y is youth nowadays, they will tend to adopt new technology if it is full of entertainment and enjoyable. If e-insurance services able to create such joyful feeling to consumers when they using it, consumers will have more intention to use and try e-insurance.

2.10 Security and Privacy VS E-insurance

Security and privacy is one of the most important issues addressed in e-commerce today. This issue affects consumers' adoption of new technology. From customers' perspective, they concerned about the level of risk in adoption of technology innovation (Cooper, 1997). If the level of risk is low, security of new technology is improved; more households will tend to conduct their financial transaction through internet (Wallis report, 1997). Security and privacy can be considered as a serious obstacle of adoption in internet banking in Australia (Sathye, 1999). Besides, security and privacy can affects how people adapt their behavior in some situation (Adams & Sasse, 1999). Threat of information privacy has opted up many of user from usage of internet for various purposes (Hoffman, 1999). Internet users not only concern about information privacy, they also concern about security when private data transferred through online (Warrington, 2000). Privacy is defined as the degree of control over one's personal data (Ackerman and Jr., 2003). In business context, privacy is depends on how the company use their customer's personal data (Turner, Zavod & Yurcik, 2001). On the other hand, security is broadly defined as access to data by unauthorized person (Ackerman & Jr., 2003). In term of business context, security is the ability of a company to prevent the unauthorized access to customers' data (Turner, Zavod & Yurcik, 2001).

The new evolved of e-commerce and technology allowed data mining for customers' buying pattern. This useful information (customers' buying pattern) can be reused via internet because the improvement of technology allowed data can be captured easily in broader scope. Reuse and resale of the customers' data without their consent is an unethical action. This issue is raise up the privacy issues of using internet (Culnan & Armstrong, 1999). There are two primary concerns about privacy which are access unauthorized data because lack of security and reuse customers' data for other purpose without their consent (Culnan & Armstrong, 1999). In term of security, customers fear the loss of their private and confidential information and data such as financial data (Ackerman & Jr., 2003). In every online transaction, there is a need for users to provide the personal information to the website in order to authenticate themselves for accessing particular transaction. This situation has created many security vulnerabilities in electronic environment include hostile websites can crack (Graves & Curtin, 2000). The security and privacy problems have threatened internet users.

Security and privacy is one of the main factors that affected consumers' intention to use internet for various transactions. Lack of secure environment of the internet makes consumers refuse to transact business online (Turner, Zavod & Yurcik, 2001). Feeling fears and insecurity of divulging personal information makes online business to find ways for develop a secure environment (Wang, Lin & Tang, 2003). Commercial website is the interface that allows consumers to experience its level of security (Turner, Zavod & Yurcik, 2001). Hence, a secured interface is essential for create good experiences in turn, good experiences able to build consumers' trust over time in a site. Therefore, it is necessary to fully investigate how consumers perceived security and privacy in internet use and the ways to build up consumers' trust in a site. Good reputations of an online company able to gives consumers more secure feel when doing transaction online, for example, Amazon (Turner, Zavod & Yurcik, 2001). Furthermore, due to the security and privacy issues about internet, some businesses even do not want to enter the e-commerce model for their business (Zinkewicz, 2000). This becomes obstacle for developing e-commerce.

In this research context, security is the level of protection of insurance companies' site from unauthorized access. If the level of security of the site is high, consumers will feel more secure and more intention to adopt e-insurance. On the other hand, privacy is how the insurance companies control and manage their customers' personal data. In physical existence, purchase insurance policy requires customers to provide large amount of personal data and sensitive information such as health report. If customers purchase insurance online means that the large amount of private data is transferred through an unsecured environment, namely internet. Customers will try to avoid their personal data from being unsanctioned intrusions; therefore it will lead to lesser intention to purchase insurance online directly. If customers want to make payment of insurance through online, another serious problem which is credit card fraud may occur. In addition, privacy policy conducted in the insurance companies also affects the intention to use e-insurance. If the level of security and privacy is high, then customer will feel more secure and willing to use e-insurance.

2.11 Information on e-insurance VS E-insurance

In Malaysia, e-insurance is considered as new technology innovation which has not been fully implemented. Amount of information that customer know about e-insurance is important because it able to influence the adoption of customer in e-insurance. This study was narrowed down the scope of study into generation Y. It will concentrate to investigate or study awareness of generation Y towards e-insurance. Awareness is the ability to perceive, feel or to be conscious of certain new object, event or sensory pattern (Wikipedia, 2009). More information that customers know about e-insurance, the level of awareness of it is higher. Every adoption or rejection towards new technology adoption is only start when the consumers aware about it (Rogers & Shoemaker, 1971). It is impossible for a person willing to adopt or accept new technology innovation without aware about the particular innovation. Therefore, the level of information that the customer know about e-insurance is crucial for the study.

Information on e-insurance can be classified into two categories which are information that create initial awareness about e-insurance and information about benefits and advantages of using e-insurance. Both of the information is important for consumers to evaluate the quality of the technology innovation. In marketing context, information about the benefits and advantages of using a product or service considered as a product promotion strategy (Guiltinan & Donnelly, 1983). Customers will more tend to use the products or services, if they know more about the benefits provided by the products or services. One of the research report stated that consumers will try to compare the value of the product or service among each other and found out the product or service that can offer them the best value and they are aware or educated about it (Wallis Report, 1997). Thus, it is important and necessary for insurance companies to create awareness among consumers about the availability of e-insurance services and how the e-insurance can add value to customers.

The prerequisite of adoption is consumer must aware about the new brand (Howard & Moore, 1982). Creating awareness among consumers about new product or service is important characteristics of adoption of innovation. The sentence ‘don't expect the good products will promote and sell themselves' must bear in mind of most of the companies (Cooper, 1997). Observability of an innovation is the degree to which the innovation is visible in social system (Rogers, 1962). The more visible of the functions and benefits of an innovation, the greater the probability of adoption (Black, Lockett, Winklhofer & Ennew, 2001). Lack of awareness is one of the most frequent barriers in adoption of electronic commerce (OECD, 1998). In the stages of innovation dissemination process, there is a need for information to move from one stage to another stage (Rogers, 1995). Hence, awareness creation is essential element for adoption of an innovation. Possible solutions for lack of awareness about the innovation and its benefits include give wider publicity of its benefit through demonstration kiosk, road show, advertisement, seminar, workshop and exhibitions (Sathye, 1999). In this study, the amount of information and knowledge that the generations Y know

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