Impact of Financial Marketing Management on Firm Performance in the Insurance Sector of Pakistan: Mediating Role of Marketing Innovation

Abstract

Although insurance is a tool to hedge risk but insurance companies yet facing the risks of financial entities while contributing towards the economic growth. However, there is a scarcity of research on financial entities and performance of insurance companies involving both quantitative and qualitative research methods. Therefore, this study aims to investigate the impact of financial marketing management (financial literacy, marketing imagination, and marketing insight) on perception-based firm performance with the mediating role of marketing innovation in the insurance sector of Pakistan. This study employed mixed methodology (quantitative and qualitative) to test and validate the research model and research hypotheses, respectively. Using the positivism research approach and cross-sectional design, primary data is collected through survey from 633 respondents comprising of 297 insurance agents, and 336 senior managers (CEOs, directors, managers) from 50 insurance firms in Pakistan which have license to operate insurance business. To test research hypotheses, data was analyzed using Smart PLS, in addition to checking the reliability and validity of data. Findings reveal that financial literacy, marketing imagination, and market insight have direct significant positive impact on the firm's financial performance. Also, marketing innovation mediated the relationship between financial marketing management and insurance firms’ performance. Furthermore, the results of both quantitative and qualitative data have significant importance to the insurance sector firms in Pakistan, for improving the financial literacy of agents, enhancing capability to imagine the market, and developing a better insight towards the market to increase the firm performance. Also, this research coins the term Financial Marketing Management and recommends that insurance should be viewed as are specialized function by the senior management where the agents must possess the requisite financial literacy, market imagination, and market insight as well as a deep understanding of the financial concepts when designing and selling the insurance product.