Journal of Promotion Management

ISSN: 1049-6491 (Print) 1540-7594 (Online) Journal homepage: http://www.tandfonline.com/loi/wjpm20

Does Corporate Social Responsibility Influence

Customer Loyalty in the Taiwan Insurance Sector?
The role of Corporate Image and Customer
Satisfaction

Chen-Ying Lee

To cite this article: Chen-Ying Lee (2018): Does Corporate Social Responsibility Influence
Customer Loyalty in the Taiwan Insurance Sector? The role of Corporate Image and Customer
Satisfaction, Journal of Promotion Management, DOI: 10.1080/10496491.2018.1427651

To link to this article: https://doi.org/10.1080/10496491.2018.1427651

Published online: 31 Jan 2018.

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JOURNAL OF PROMOTION MANAGEMENT
2018, VOL. 0, NO. 0, 1–22
https://doi.org/10.1080/10496491.2018.1427651

Does Corporate Social Responsibility Influence Customer

Loyalty in the Taiwan Insurance Sector? The role
of Corporate Image and Customer Satisfaction
Chen-Ying Lee
National Taichung University of Science and Technology, Department of Insurance and Finance, Taichung
City, Taiwan, Republic of China

ABSTRACT KEYWORDS
This study aims to investigate the impact of corporate social corporate image, corporate
responsibility on customer loyalty, and examines the role of social responsibility, customer
corporate image and customer satisfaction. The empirical results satisfaction, customer loyalty,
indicate a positive effect of economic and legal corporate social life insurance
responsibility on customer loyalty, as well as a partial mediating
effect of customer satisfaction between corporate social
responsibility and customer loyalty. Moreover, this study
identifies the moderating effect of corporate image between
corporate social responsibility and customer loyalty. The results
of this study are useful to the life insurance sector for enhancing
their customer loyalty and service marketing strategy.

Introduction
At the end of the 1980s, amid the trends of financial liberalization, internationali-
zation, and economic development, the Taiwan insurance industry recorded vigor-
ous growth. According to the Zurich Swiss Reinsurance Company (2016) statistics,
Taiwan’s insurance penetration (i.e., ratio of insurance premiums to GDP) ranked
first in the world in 2015 at 18.97%. Compared with the U.K. (9.97%) and the U.S.
(7.27%), Taiwan’s insurance penetration is relatively high. The Taiwan Insurance
Institute (TII) reported that the combined market share of the top five life insurers
was at 65.14% in 2014 as a result of mergers and acquisitions among insurers, indi-
cating a rising trend in market concentration with high competition. Tsoukatos
and Rand (2006) described life insurance services as highly intangible. According
to Lombardi (2005), retaining customers is crucial for life insurers as a long-lasting
relationship with customer results in greater instances of cross-selling and positive
recommendation intentions. Zeithaml, Serry, and Parasuraman (1996) pointed out
that insurance providers can recover the selling cost of an insurance policy only
when the policy is renewed for three to four years. Diacon and O’Brien (2002) also

CONTACT Chen-Ying Lee chenying0207@yahoo.com.tw National Taichung University of Science and Tech-
nology, Department of Insurance and Finance, Taichung, 40401, Taiwan, Republic of China.
© 2018 Taylor & Francis
2 C.-Y. LEE

posited that high retention rates are correlated with better financial performance.
Therefore, customer loyalty management is a critical factor for life insurers.
In recent years, corporate social responsibility (CSR) has gradually come to be
regarded as a good strategic marketing tool (He & Lai, 2014). CSR is an essential
element in building and maintaining a favorable corporate image, which is
regarded as an important strategic resource factoring into a company’s competitive
advantage (Keh & Xie, 2009). Sen and Bhattacharya (2001), suggested that a firm’s
CSR practices positively affect a consumer’s attitude toward the corporation.
Moreover, CSR initiatives have been viewed as necessary for the life insurance
industry because life insurance companies are protecting the rights of policyhold-
ers and respecting the benefits of stakeholders. The public holds high expectations
and keeps a critical eye on industries that, in their perception, earn unusually large
profits, such as the life insurance industry, which makes CSR especially important
(Hus, 2012). In addition, many studies have focused on CSR and its impact on
consumer or customer behavior (Fatma & Rahman, 2016; Mohr & Webb, 2005;
Marin & Ruiz, 2007). Luo and Bhattacharya (2006) verified that there is a direct
influence of CSR on customer satisfaction and that a high level of customer satis-
faction usually results in increased customer loyalty. Huang, Yeu, and Liu (2014)
also find that CSR has a significantly positive effect on corporate image, service
quality, and purchase intentions in Taiwanese convenience stores. Yeh (2015) indi-
cates CSR and service innovation capabilities contribute to customer advocacy,
which can achieve superior relationship quality, relationship value, and customer
loyalty in the Taiwanese wealth management service. Furthermore, CSR has been
used in studies incorporating the customer loyalty model, and in this sense, recent
studies empirically demonstrate a positive relationship between CSR and customer
loyalty (Chomvilailuk & Butcher, 2014; Garc
ıa de los Salmones, Herrero, &
Rodr
ıguez del Bosque, 2005; He & Li, 2011; P
erez, Garc
ıa de los Salmones, &
Rodr
ıguez del Bosque, 2013; Wei, Egri, & Lin, 2014). In the same way, the aca-
demic literature has suggested that CSR associations can influence customer satis-
faction (He & Li, 2011; Luo & Bhattacharya, 2006). Moreover, CSR initiatives are a
key element of corporate identity that can lead to customers identifying with the
company and these customers are more likely to be satisfied with a firm’s offerings
(Bhattacharya & Sen, 2003). On the other hand, corporate image is a valuable asset
that companies need to manage (Abratt & Mofokeng, 2001). Life insurance is a
high credence service in which the future benefits of products are difficult to prove
(Durvasula, Lysonski, Mehta, & Tang, 2004). Customers are generally less confi-
dent in their ability to judge the worth of the services offered and are inevitably
more careful in making their purchase decisions (Yu & Tseng, 2016). Thus, the
insurance company’s corporate image is often an important factor that plays a role
in customers’ purchase decisions. The most important factor in developing and
maintaining loyalty is the corporate image of an organization, which refers to the
accumulation of consumption experiences on multiple occasions with emotional
and functional principles of the products (Ryu, Lee, & Kim, 2012). In other words,
 JOURNAL OF PROMOTION MANAGEMENT 3

consumers who develop a positive mental schema of a brand will tend toward
higher loyalty (Brodie, Whittome, & Brush, 2009; Hartman & Spiro, 2005). There-
fore, a positive corporate image appears to encourage customer loyalty to the ser-
vice provider. To my knowledge, little published research evaluates CSR, customer
satisfaction, and corporate image, as well as their influence on customer loyalty in
Taiwan’s life insurance industry.
This research makes some important contributions to the literature. First, unlike
prior research that has rarely explored CSR’s impact on consumers’ behavior in the
financial industry, this study provides empirical data regarding the effects of CSR
on customer loyalty found in insurance and financial service literature. Addition-
ally, this study suggests that corporate image and customer satisfaction should be
regarded as important indicators for CSR and customer loyalty in the financial ser-
vice industry. Second, the theoretical contribution of this study is the introduction
of customer satisfaction and corporate image as a long-term benefit for the rela-
tionship between CSR and customer loyalty. Third, this study confirms that cus-
tomer satisfaction has a partial mediating effect on CSR and customer loyalty.
Furthermore, this study also reveals that the corporate image has a moderating
effect on CSR and customer loyalty. Finally, it is worth noting that most studies on
CSR and customer loyalty have been conducted in developed countries based on
European and U.S. data. Therefore, using a sample from Taiwan as a developing
country in this study could be helpful in demonstrating CSR outcomes in a world-
wide context.

Literature review and hypotheses

Corporate social responsibility
The concept of CSR originated in the 1950s, when many people believed that the
actions of corporations are closely related to society and the public, and should
conform to and satisfy social values and expectations (Bowen, 1953). Traditional
perspectives believe that when corporations provide cheap services and maximize
profits it is to meet their social responsibility. However, the socio-economic view
believes that corporations are citizens of society. The operational process affects
the economy, society, and environment, so their responsibilities should not just be
to increase profits, but should bear further responsibility to balance society (Davis,
1973). Thus, some authors (Craig Smith, 2003; Maignan & Ferrell, 2004) argue
that companies should only be responsible to company stakeholders, while other
authors argue that companies should be responsible to society as a whole (Brown
& Dacin, 1997; Kotler & Lee, 2005). Ferrell, Gonzalez-Padron, Hult, and Maignan
(2010) believed that corporations must be responsible to their interested parties,
including internal shareholders, the board of trustees, operational teams and
employees, external consumers, suppliers, channels, partners, competitors, local
communities, and interest groups. Carroll (1979; 1999) believed that CSR is the
social expectation for corporations at specific times, including economic, legal,
4 C.-Y. LEE

ethical, and discretionary responsibilities. Economic responsibilities include the

obligation of satisfying consumers with products of good value, as well as generat-
ing sufficient profits for investors. Legal responsibilities require firms to obey laws
and comply with regulations while fulfilling their economic obligations. Ethical
responsibilities refer to the kinds of behaviors and ethical norms that business is
expected to follow even though they have not been codified into law. And, lastly,
discretionary responsibilities encompass financial and non-financial contributions
to particular causes for the “betterment of society.”
Many companies embrace a CSR program as a way to promote socially respon-
sible actions and policies and to effectively respond to stakeholder demands
(Maignan & Farrell, 2004). Motivation for satisfying stakeholder demands stems
from the fact that addressing stakeholder needs can be correlated with a firm’s sur-
vival, economic well-being, competitive advantages, and the development of trust
and loyalty among its targeted customers (Rahim, Jalaludin, & Tajuddin, 2011).

Customer loyalty
Oliver (1997) defined customer loyalty is as “a deeply held commitment to re-buy
or re-patronize a preferred product or service consistently in the future, despite sit-
uational influences and marketing efforts having the potential to cause switching
behavior”. Customer loyalty is a strategy that creates mutual rewards to benefit
firms and customers (Reichheld & Detrick, 2003). With loyal customers, compa-
nies can maximize their profit because loyal customers are willing to (1) purchase
more frequently; (2) spend money on trying new products or services; (3) recom-
mend products and services to others; and (4) give companies sincere suggestions
(Reichheld & Sasser, 1990). Between the frequency of loyalty and repurchase has
been complicated by the buyer switching behavior due to the individual level and
the market level (Breivik & Thorbjornsen, 2008). Jones and Sasser (1995), indi-
cated that customer intention could be measured by their future intentions to
repurchase product or service again, and customer repurchase intention can be
measured by making relationship with customer, and it is a significant indicator of
future behavior. Thus, loyalty links the success and profitability of a firm (Eakuru
& Mat, 2008). Customer loyalty is commonly distinguished in three approaches
including behavioral loyalty approach (Grahn, 1969); attitudinal loyalty approach
(Bennett & Rundle-Thiele, 2002; Jacoby, 1971), and integration of attitudinal and
behavioral loyalty approach (Jacoby, 1971; Dick & Basu, 1994; Oliver, 1997).

Customer satisfaction
According to Oliver (1997), satisfaction is defined from the mixture of both affec-
tion and cognition approach the consumer’s fulfillment response. Boshoff and
Gray (2004) said that satisfaction is not inherent in the product or the service itself
but, instead, satisfaction primarily consists in the consumer’s perceptions of the
attributes of the product or service as they relate to that individual. Thus, different
consumers will express different levels of satisfaction for the same experience or
 JOURNAL OF PROMOTION MANAGEMENT 5

service encounter (Ueltschy, Laroche, Eggert, & Bindl, 2007). In the marketing lit-
erature, customer satisfaction has been recognized as an important part of corpo-
rate strategy (Fornell, Mithas, Morgeson, & Krishnan, 2006). Nevertheless, authors
argue that customer satisfaction is also a cost driver since it requires future cus-
tomer servicing as additional costs. Therefore, insurer should focus on the profit-
ability of customer satisfaction. Satisfied customers purchase more while
dissatisfied customers reduce their portfolios (Terpstra & Verbeeten, 2014) and
moreover, satisfied customers tend to spread a positive word-of-mouth regarding
services offered to them (De Matos, Henrique, & De Rosa, 2013).

Corporate image
Corporate image is an abstract concept that reflects the public’s general evaluation of
a corporation. However, since the concept is very broad, there has long been an
absence of definitions agreed upon by the public, and different scholars have defined
it differently as well. Brown and Dacin (1997) claimed that corporate image derives
from customers’ perceptions of capability and social responsibility. Mazzarol (1998)
pointed out that corporate image is an indicator that attracts potential or existing
customers to be willing to come into contact with a corporation. Nguyen and Leb-
lanc (2001) believed that the factors forming corporate image may come from cus-
tomer perception of the corporation and its behavior, including the corporate name,
traditions, operational visions, and diversity of product services; these are the results
of the interactive influences of all experiences, feelings, ideas, and knowledge of cus-
tomers. Tang (2007) proposed a similar definition, pointing out that corporate image
is the customer’s total offering toward organizations, and is the sum of the public’s
beliefs, ideas, and impressions toward specific organizations. Thus, corporate image
is defined as the set of meanings that customers assign to company and then use to
describe; remember, and relate to it as a net result of their experience; impressions;
beliefs; feelings, and knowledge (Copley, 2004).

Relationship between CSR, Customer satisfaction, and customer loyalty

Over the years, researchers have studied the impact of CSR on customer loyalty in
a direct relationship. Customer loyalty is one of the most essential behaviors of
customers that firms desire to influence through the use of CSR as a marketing
tool. Some researchers question the direct link between CSR actions and loyalty or
consumers’ future behavioral intentions (Lombart & Louis, 2014). However, sev-
eral studies show a positive link between CSR and loyalty (Mohr, & Webb, 2005;
Stanaland, Lwin, & Murphy, 2011; Mandhachitara, & Poolthong, 2011; Ailawadi,
Neslin, Luan, & Taylor, 2014; Chung, Yu, Cuk-Choi, & Shin, 2015). P
erez and
Ignacio Rodr
ıguez del Bosque (2015) demonstrate that the perceptions of cus-
tomer-centric CSR initiatives positively and consistently impact satisfaction,
recommendation, and repurchase behaviors in savings and commercial banks.
Thus, consumers with positive CSR perception had greater purchase intentions,
6 C.-Y. LEE

long-term loyalty, and advocacy behaviors (Du, Bhattcharya, & Sen, 2007). Based
on the preceding discussion, I propose the following hypothesis:
H1: CSR positively affects customer loyalty in life insurance companies.
Brown and Dacin (1997) state that positive CSR associations lead to positive eval-
uations of the firm and consequently have positive effects on product evaluation and
satisfaction. Sen and Bhattacharya (2001) argue that firms are able to better under-
stand and improve their knowledge about their customers when engaging in CSR,
which in turn helps enhance customer satisfaction (Jayachandran, Sharma, Kauf-
man, & Raman, 2005). Luo and Bhattacharya (2006), list three reasons that explain
why a firm’s CSR initiatives lead to better customer satisfaction: first, actions appeal
to multidimensionality of the economic and family member elements; second, strong
CSR records improve customer evaluation of and attitude toward the firm, assisting
consumer identification with the company; third, perceived value as an antecedent
has been empirically shown to increase customer satisfaction. All other things being
equal, customers derive higher satisfaction from a product or service from a socially
responsible company. In a similar context, He and Li (2011) examine this relation-
ship in the mobile telecommunications sector and find that CSR has a direct effect
on customer satisfaction. Hsu (2012) also found that policyholders’ perceptions con-
cerning the CSR initiatives of life insurance companies have positive effects on cus-
tomer satisfaction, corporate reputation, and brand equity in Taiwan. Based on the
preceding discussion, I propose the following hypothesis:
H2: CSR positively affects customer satisfaction in life insurance companies.

The mediating role of customer satisfaction

Andreassen and Lindestad (1998) identify that customer satisfaction and loyalty are
important indicators of market orientation in the public sector influencing govern-
ment performance. Luo and Bhattacharya (2006) argue that customers are likely to be
more satisfied with products and services offered by socially responsible firms and test
their model on Fortune 500 companies. Their findings reveal not only a direct link
between CSR and customer satisfaction, but also that customer satisfaction fully medi-
ates the relationship between CSR and firm market value. Furthermore, many studies
of satisfaction within the marketing literature point out a positive relationship between
customer satisfaction and customer loyalty (e.g., Anderson & Sullivan, 1993; Cronin,
Brady, & Hult, 2000; Oliver, 1999; Suh & Yi, 2006). Thus, the expected effect of CSR
on customer loyalty may be indirect via customer satisfaction. Martinez and Rodriguez
del Bosque (2013) found that CSR can be indirectly affected by the mediating effect of
customer satisfaction on customer loyalty. Thus, based on the preceding discussion,
the following hypothesis is suggested:
H3: Customer satisfaction mediates the relationship between CSR and customer
loyalty in life insurance companies.
 JOURNAL OF PROMOTION MANAGEMENT 7

The moderating effect of corporate image

Johnson, Andreessen, Lervik, and Cha (2001) argue that the corporate image is
considered an attitude that is directly associated with customer loyalty due to its
functional components. Corporate image is positively linked with customer loyalty
in education, retailing, and telecommunication services in different regions
(Nguyen & Leblanc, 2001). Some researchers (Bravo, Montaner, & Pina, 2009;
Sarstedt, Wilczynski, & Melewar, 2012) argue that corporate image is an important
aspect for an organization to maximize its profit, survive in the market, retain
customers, and attract new customers, as well as to increase its market share.
Recent studies reveal the significant impact of corporate image on customer loyalty
(Helgesen, IvarHavold, & Nesset, 2010; Ishaq, 2012). Previous studies indicate that
having a favorable corporate image can provide a company with a distinctive and
credible appeal, as well as a more effective form of differentiation and a source of
competitive advantage. According to Dowling (2004), the attributes of corporate
image give rise to two classes of factors: one is more factual in nature, including
corporate capabilities and financial performance, while the other is more emotion-
ally driven, such as social accountability and the distinctiveness or personality of
the organization. A societal marketing program and corporate communication can
create positive consumer attitudes toward the corporate image (Chattananon, Law-
ley, Trimetsoontorn, Supparerkchaisakul, & Leelatouthayothin, 2007). Thus, based
on the preceding discussion, the following hypothesis is suggested:
H4: Corporate image has a moderating effect on the relationship between CSR
and customer loyalty in life insurance companies.

Research model
Based on the literature review and theory development, a research model is devel-
oped to examine the impact of CSR on customer loyalty in the life insurance sector,
as well as to explore the role of the corporate image and customer satisfaction. The
proposed research framework is illustrated in Figure 1.

Methodology
As the objective of this study is relatively straightforward and Structural Equation
Modeling (SEM) and Partial Least Squares (PLS) are unable to deal with collinear
variables, multiple regression analysis was used to provide a diagnostic message of
co-linearity in this study. Therefore, I did not consider SEM PLS for evaluating
these complex relationships. Instead, I followed researchers, such as Chomvilaiuk
and Butcher (2014), Huang et al. (2014), and Bae and Kim (2013), in using multi-
ple regression and hierarchical regression to explore CSR, corporate image, cus-
tomer satisfaction, and customer loyalty in this study. The further analyses are
detailed below.
8 C.-Y. LEE

Corporate image

CSR H4
Economic, Legal,
Ethical and
Discretionary Customer loyalty
CSR H1

H2ˇ
Customer satisfaction
H3

Figure 1. Research framework.

Sample and data collection

Due to the immense number of customers who purchased life insurance and Tai-
wan’s large population, as well as based on human, time, and material considera-
tions, this research uses purposive sampling to collect data by means of a
questionnaire survey. For the research survey conducted in Taipei, New Taipei,
and Taoyuan, paper-based questionnaires were mainly distributed through life
insurance broker supervisors and staff to consumers who had previously pur-
chased life insurance in Taiwan. A pilot study with a sample size of 30 was con-
ducted to clarify the overall structure of the questionnaire. The participants were
asked to respond to the survey questionnaires based on their most recent experi-
ences, and following the pilot test, the main survey was administered. In the
main survey, 410 questionnaires were distributed and 311 valid responses were
collected after eliminating irrecoverable and invalid responses. The valid question-
naires account for an effective response rate of 75.8%. With regard to demo-
graphics, the majority of respondents were female (58.5%) and younger than
30 years of age (42.1%). With respect to educational level, the highest educational
attainment was primarily university graduate (69.8%). In the occupational back-
grounds, the service industry accounted for 39.2% of the total sample. An extrap-
olation procedure suggested by Armstrong and Overton (1977) assessed the non-
response bias of the data set. No significant differences exist between early (first
quartile) and late (fourth quartile) respondents with respect to the constructs
used in this study. A description of the sample is illustrated in Table 1.

Questionnaire design and measures of constructs

The survey questionnaire consisted of two parts. The first recorded the subject’s per-
ception of each variable in the model, and the definition of the key variables are
 JOURNAL OF PROMOTION MANAGEMENT 9

Table 1. Description of sample (N D 311).

Item Category Number of sample Percentage (%)

Gender Male 129 41.5

Female 182 58.5
Age 20–29 years 131 42.1
30–39 years 91 29.3
40–49 years 56 18.0
Over 50 years 33 10.6
Education Under senior high school 15 4.8
Senior high school 57 18.3
College/University 217 69.8
Graduate school 22 7.1
Occupation Financial sector 81 26.1
High tech and manufacturing 44 14.1
Service 122 39.2
Others 64 20.6
Total 311 100.0

illustrated in Table 2, while the second recorded the subject’s demographic informa-
tion. The following demographic variables were assessed: gender, age, level of educa-
tion, and occupation. The first section asked each subject to indicate his or her degree
of agreement with each item. Data were collected using a seven-point Likert scale to
facilitate measurement. Participants were asked to fill in the questionnaire and indicate
their current situation for each variable item (1 D strong disagreement and 7 D strong
agreement). The questionnaire consisted of 30 items measuring the seven variables.

Reliability and validity analysis

The internal reliability analysis measures the consistency of item content in scales
and the stability of scale measurements for dimensions. This study can apply the
value of Cronbach’s alpha to verify the items’ consistency. The threshold value for
an acceptable Cronbach’s alpha is 0.7 (Nunnally, 1978). All of the coefficient alpha
values, ranging from 0.802 for discretionary responsibility to 0.949 for customer
satisfaction, were higher than threshold value of 0.7. Therefore, a good reliability
of various subscales is ensured.
The contents of this study’s questionnaire are based on relevant theories, refer to
the related literature’s questionnaire contents, and include the scholars’ opinions.
Thus, this study has a considerable degree of content validity. A factor analysis is
deemed appropriate in this study, as the Kaiser-Mayer-Olkin (KMO) measure of
sampling adequacy (0.9) indicates high sampling adequacy and Bartlett’s test of
sphericity (p D 0.000) indicates significance. Therefore, the sample size is adequate
for the data. A factor analysis is performed to assess construct validity. A principal
component analysis (PCA) with a varimax rotation is employed. The results of the
factor analysis indicate that the eigenvalue of each construct exceeded 1, that each
item had significant factor loading > 0.5, and that no item was found to have
cross-loading, showing strong convergent validity (Kaiser, 1958). The results of
factor analysis and reliability analysis are shown in Table 3.
10 C.-Y. LEE

Table 2. Definition of the key variables.

Construct Operational definition Sources

Economic The obligations for business to maintain economic growth, Carroll (1999); Maignan and
responsibility and to meet consumption needs. Ferrell, (2000)
Legal responsibility The businesses must fulfill their economic mission within the Carroll (1999); Maignan and
framework of legal requirements. Ferrell (2000)
Ethical Require that businesses abide by moral rules defining Carroll (1999); Maignan and
responsibility appropriate behaviors in society. Ferrell (2000)
Discretionary Those business activities that are not mandated, not required Carroll (1979); Maignan and
responsibility by law, and not expected of businesses in an ethical sense. Ferrell (2000)
Corporate image The evaluative judgment of the total perception of the Nguyen and LeBlanc (2001)
corporation.
Customer A person the felling of pleasure or disappointment Kotler (2000)
satisfaction attainment, which is derived from consumer expectations
(or result) of the service.
Customer loyalty The mindset of the customers who hold favorable attitudes Pearson (1996); Sanzo, Santos,
toward a company, commit to repurchase the company’s Alvarez, and Vazquez (2007)
product or service and recommend the product or service
to others.

Based on this rule, this study obtained seven dimensions: economic, legal, ethi-
cal, discretionary CSR, corporate image, customer satisfaction, and customer loy-
alty. In addition, Chiou (2006) suggested that cumulative explained variance can
measure validity. When it is higher than 50%, the validity of the construct is good.
The cumulative explained variances of this study’s constructs are all higher than
50%. Hence, the dimensions have good construct validity. Table 4 indicates the
internal correlation, mean, and the standard deviations of the constructs used in
the research.

Common method variance (CMV) test

As with all self-reported data, there is a potential for comment method biases
resulting from multiple sources, such as motif consistency and social desirability.
(Podsakoff, MacKenzie, Lee, & Podsakoff, 2003).A Harman one-factor test
(Podsakoff & Organ, 1986) is conducted on the crucial variables in this study’s the-
oretical model, which include CSR, corporate image, customer satisfaction, and
customer loyalty. The results of this test noted that four factors are present, and
that the most covariance explained by a single factor is 21.69%, indicating that
comment method biases are not a problem in this study’s results.

Empirical analysis and results

Variation analysis of demographic variables, CSR and customer loyalty
A previous study shows that personal background factors have an impact on CSR
and customer loyalty (Patino, Kaltcheva, Pitta, Sriram, & Winsor, 2014). In order
to avoid the interference of exogenous variables, this study incorporated demo-
graphic variables as controls variables. Demographic variables include gender, age,
education, and occupation. This study first analyzes the influence of demographic
 JOURNAL OF PROMOTION MANAGEMENT 11

Table 3. Factor analysis and reliability.

Factor Cumulative percentage
Construct Item loading of variance Cronbach’s a

Economic responsibility ER1 0.648 20.053 0.858

ER2 0.725
ER3 0.543
Legal responsibility LR1 0.609 39.770 0.858
LR2 0.655
LR3 0.722
LR4 0.508
Ethical responsibility ETR1 0.723 59.081 0.820
ETR2 0.474
Discretionary responsibility DR1 0.691 67.563 0.802
DR2 0.518
Corporate image CI1 0.878 65.291 0.949
CI2 0.852
CI3 0.850
CI4 0.844
CI5 0.838
CI6 0.801
CI7 0.792
CI8 0.783
CI9 0.760
Customer satisfaction CS1 0.889 76.443 0.931
CS2 0.880
CS3 0.867
CS4 0.842
CS5 0.795
Customer loyalty CL1 0.924 72.736 0.947
CL2 0.896
CL3 0.892
CL4 0.866
CL5 0.842

variables on cognition of CSR and customer loyalty. Since there are only two gen-
der groups, a t-test is performed. The results show that gender has no significant
effect on the cognition of CSR and customer loyalty. Since age, education, and
occupation are variables with more than three groups, this study uses the analysis
of variance (ANOVA) to test whether they have a significant effect on the aware-
ness of CSR and customer loyalty. The results show that occupation and education
have a significant effect on the cognition of CSR and customer loyalty, indicating
that life insurers can apply these dimensions to developing service marketing strat-
egies. The results of the t-test and ANOVA in terms of the demographic variables,
CSR, and customer loyalty variables are summarized in Table 5.

The effect of CSR and customer satisfaction on customer loyalty

As a higher variance inflation factor (VIF) value represents more significant co-linear-
ity of variables, VIF value above 10 indicate serious problem of co-linearity (Gujarati,
1995). First, in the co-linearity analysis, the VIF values of all variables are less than 4,
indicating that there are no problems of co-linearity between variables. This study
uses multiple regression model analysis to determine the effect of corporate image on
customer loyalty to verify H1.The regression equation has a level of significance
12 C.-Y. LEE

Table 4. Means, standards and construct correlation.

Mean SD 1 2 3 4 5 6 7

1.Economic CSR 5.15 0.95 1

2. Legal CSR 5.16 0.94 0.803** 1
3. Ethical CSR 4.92 1.05 0.699** 0.734** 1
4. Discretionary CSR 4.85 1.02 0.677** 0.718** 0.756** 1
5. Customer satisfaction 4.98 0.98 0.686** 0.705** 0.653** 0.616** 1
6. Corporate image 5.18 0.93 0.726** 0.758** 0.640** 0.616** 0.832** 1
7. Customer loyalty 5.03 1.06 0.656** 0.687** 0.598** 0.579** 0.822** 0.845** 1
 
Notes: Significant at p < 0.05, Significant at p < 0.01 (two tailed).

(F D 80.853, P D 0.000), and the Model 1 predictability (Adj R2) value is 0.507. The
aspect of economic CSR (b D 0.239, p D 0.001) and legal CSR (b D 0.361, p D 0.000),
indicate economic and legal CSR significantly and positively affect customer loyalty.
The aspect of ethical CSR (b D 0.109, p D 0.112) and discretionary CSR (b D 0.076, p
D 0.252), indicate that two variables are not significantly affect customer loyalty. From
the Model 2, uses the simple regression model to determine the effect of customer sat-
isfaction on customer loyalty to verify H3. The regression equation has a level of signif-
icance (F D 369.007, P D 0.000), and the model predictability (Adj R2) value is 0.543.
The customer satisfaction (b D 0.738, p D 0.000), indicates customer satisfaction posi-
tively affect customer loyalty. The result is summarized in Table 6.

The effect of CSR on customer satisfaction

This study uses the multiple regression models to determine the effect of CSR on
customer satisfaction to verify H2. The regression equation has a level of signifi-
cance (F D 92.173, P D 0.000), and the model predictability (Adj R2) value is
0.551. The aspect of economic CSR (b D 0.265, p D 0.000), legal CSR (b D 0.315,
p D 0.000), and ethical CSR (b D 0.137, p D 0.036) indicate three variables are sig-
nificantly and positively affect customer satisfaction. The aspect of discretionary
CSR (b D 0.107, p D 0.091) indicate discretionary CSR is not significantly affect
customer satisfaction. The result is summarized in Table 7.

The mediating effect of customer satisfaction

This study uses the mediating effect confirmation model by Baron and Kenny
(1986) to evaluate whether customer satisfaction is the mediating variable between

Table 5. Demographic variables of the t-test and ANOVA analysis.

Gender Age Education Occupation

Variables F- value P-value F- value P- value F-value P-value F-value P-value

*
CSR 0.550 0.459 0.141 0.936 2.932 0.034 10.169 0.000***
Customer loyalty 0.250 0.617 1.109 0.346 5.835 0.001** 7.240 0.000***

Notes: Significant at P <0.05, Significant at P <0.01, Significant at P <0.001.

 JOURNAL OF PROMOTION MANAGEMENT 13

Table 6. Multiple regression analysis –the effect of corporate image, CSR on customer loyalty.
Dependent variables D Customer loyalty

Model 1 Model 2

Independent variable b value P-value b value P-value

**
Constant 0.014 0.841
Economic CSR 0.239 0.001***
Legal CSR 0.361 0.000***
Ethical CSR 0.109 0.112
Discretionary CSR 0.076 0.252
Customer satisfaction 0.738 0.000***
F value 80.853*** 369.077***
Adj R2 0.507 0.543

Note: ignificant at P <0.05, Significant at P <0.01, Significant at P <0.001. b value: Standardized coefficient.

CSR and customer loyalty; the following four conditions must be met: (1) CSR
must have a significant influence on customer loyalty; (2) CSR must have a signifi-
cant influence on customer satisfaction; (3) When CSR and customer satisfaction
are simultaneous prediction variables in a regression analysis on customer loyalty,
customer satisfaction must have a significant influence on customer loyalty; (4) in
the mediating variable model, the regression coefficient of CSR must be smaller
than the regression coefficient of the independent variable model.
First, this study explores whether CSR would affect customer loyalty through cus-
tomer satisfaction. Table 8 Model 1 shows that there is a significant influence
between CSR and customer loyalty (b D 0.703, p<0.001). In addition, there is a sig-
nificant influence between CSR and customer satisfaction (b D 0.738, p<0.001).
Table 8 Model 2 shows that there is a significant influence between customer satis-
faction and customer loyalty, and there is a significant influence between CSR and
customer loyalty (b D 0.214, p<0.01), but the b value is smaller than 0.703 from the
first step, which means that customer satisfaction has partial mediation between
CSR and customer loyalty. Thus, Hypothesis H3 in this study is supported.

Table 7. Multiple regression analysis –the effect of CSR on satisfaction.

Customer satisfaction

Independent variable b value P-value

Constant 0.001**
Economic CSR 0.265 0.000***
Legal CSR 0.315 0.000***
Ethical CSR 0.137 0.036*
Discretionary CSR 0.107 0.091
F value 92.173***
Adj R2 0.551

Note:

Significant at P <0.05,

Significant at P <0.01,

Significant at P <0.001.
b value: Standardized coefficient.
14 C.-Y. LEE

Table 8. The mediating effect of satisfaction on CSR and customer loyalty.

Customer loyalty

Variables Customer satisfaction Model 1 Model 2

CSR 0.738*** 0.703*** 0.214***

Customer satisfaction 0.822***
Adj R2 0.543 0.493 0.694
F value 369.007*** 302.544*** 352.021***

Note: Significant at P <0.05, Significant at P <0.01, Significant at P <0.001.

The moderating effect of corporate image on the relationship between CSR

and customer loyalty
H4 tested the moderating effect of the corporate image. The research follows
Aiken and West (1991) who used hierarchical regression to explore the moder-
ating effect of the corporate image on the relationship between CSR and cus-
tomer loyalty. Table 9 Model 3 illustrates the moderating effect of corporate
image on CSR and customer loyalty to test the aforementioned hypothesis. The
results show that corporate image positively moderates the relationship
between ethical CSR (b D 0.105, p<0.05), discretionary CSR (b D 0.120,
p<0.05), and customer loyalty. This means that when corporate image is high,
ethical CSR and discretionary CSR would have a significant effect on customer
loyalty. Furthermore, the results in Model 3 indicate that corporate image nega-
tively moderates the relationship between legal CSR (b D -0.167, p<0.01) and
customer loyalty. In other words, if corporate image is high, legal CSR would
have a significant negative effect on customer loyalty. Moreover, a moderating
effect of corporate image in the relationship between CSR and customer loyalty
is identified.

Table 9. The moderating effect of corporate image on CSR and customer loyalty.
Model 1 b value Model 2 b value Model 3 b value

Independent variable
Economic CSR 0.104* 0.077 0.005
Legal CSR 0.194** 0.178** 0.064
Ethical CSR 0.394*** 0.362*** 0.046
Discretionary CSR 0.030
Moderating variables
Corporate image 0.195*** 0.731***
Economic CSR x Corporate image -0.042
Legal CSR x Corporate image -0.167*
Ethical CSR x Corporate image 0.105*
Discretionary CSR x Corporate image 0.120*
D-W value 2.012 1.961 1.727
R2 0.440 0.471 0.741
Adj R2 0.432 0.462 0.730
F value 55.571*** 53.783*** 65.486***

Note: Significant at P <0.05, Significant at P <0.01, Significant at P <0.001. b value: Standardized coefficient.
 JOURNAL OF PROMOTION MANAGEMENT 15

Conclusion and managerial implications

Discussion and conclusion
Overall, the results of this study provide a more comprehensive theoretical
and empirical foundation for understanding the impacts of CSR on customer
loyalty and examining the role of corporate image and customer satisfaction
in the life insurance industry. This study identifies the mediating effects of
customer satisfaction in the relationships between CSR and customer loyalty
and the moderating effect of the corporate image in the relationship between
CSR and customer loyalty in insurance industry. First, life insurers’ CSR posi-
tively affects customer loyalty. The results are consistent with the findings of
Chen, Chang, and Lin (2012). Hence, managers should strengthen and employ
their CSR strategy in order to enhance and increase policyholder numbers in
the short term. Second, in the life insurance industry, CSR has a significant
positive impact on customer satisfaction. This result matches the findings of
Luo and Bhattacharya (2006). Therefore, life insurance companies that prac-
tice CSR have to take into account customers’ attitudes and behavior. These
firms should offer more incentives for establishing and maintaining policies
and marketing plans that incorporate CSR in order to enhance customer satis-
faction. Third, this research proposes customer satisfaction as a partial media-
tor in the relationship between CSR and customer loyalty. These results are
consistent with the findings of Martinez and Rodriguez del Bosque (2013) and
expand the research of Luo and Bhattacharya (2006) by proposing, developing,
and confirming the mediation role of customer satisfaction on the relationship
between CSR and customer loyalty. Finally, a moderating effect of corporate
image in the relationship between CSR and customer loyalty is identified.
These results are not consistent with the findings of Chung et al. (2015). The
findings show that the corporate image can create a positive brand attitude
for consumers and foster a persistent loyal relationship in the life insurance
industry. Additionally, the findings of this study provide an insight into the
importance of corporate image and customer satisfaction as indicators of CSR
and customer loyalty, and of implementing long-term strategies to enhance
customer loyalty in the life insurance industry.

Managerial implications
This study can be useful for practitioners to assess the potential long-run effect of
the CSR-related investments on customer loyalty. Furthermore, the results have
both theoretical and practical managerial implications in developing economics.
First, CSR enhances customer loyalty, which therefore encourages managers of
life insurance companies to invest in CSR activities; this can be seen as a service
marketing strategy providing a business the opportunity to meet its sustainability
goal. Second, the results show that economic, legal, and ethical CSR initiatives
may be beneficial for companies in building customer satisfaction. Furthermore,
16 C.-Y. LEE

discretionary CSR does not significantly affect customer satisfaction in the life
insurance industry. Thus, managers need to be selective and strategic in exercis-
ing discretionary responsibilities and enhance relevant social responsibility activ-
ities. The use of social network services, such as Facebook and Twitter, is
recommended for sharing CSR activities with the community and for communi-
cating with customers in order to enhance their satisfaction. Third, in order for
customer satisfaction to enhance the relationship between CSR and customer
loyalty, managers of life insurance companies may need to implement CSR activ-
ities or programs that are capable of continually building customer satisfaction.
This would provide indirect strengthening effects on customer loyalty and on the
moderating effect of the corporate image in the relationship between CSR and
customer loyalty. Customer expectations toward CSR activities and corporate
image can lead to stronger evaluations and establish a good image. Therefore,
life insurance companies should consider building a good corporate image in
some CSR initiatives, such as community and environment support, as well as
customer relations. Fourth, due to Taiwan’s culture being different from those of
Western societies, uncertainty avoidance and long-term orientation are very sig-
nificant (Hofstede, 2017). Taiwan’s culture implies that life insurers should asso-
ciate their CSR activities with uncertainty avoidance and long-term orientation
dimensions when framing a CSR message. This is very important considering
that Taiwan has a particularly pragmatic, long-term-oriented culture with a
strong propensity to save and invest. In order to create higher insurance penetra-
tion, CSR is a very important aspect in Taiwan’s insurance industry. The tradi-
tional Chinese proverb “doing good and not wanting others to know it,” is not
applicable to this study at all. Rather, this study encourages life insurance compa-
nies to not only implement CSR activities, but also enhance customer satisfaction
and their corporate image in order to achieve their profit goal. Finally, this
empirical result also provides an integrated framework and is applicable to the
some developing Asian counties in insurance industry.

Limitations and future research

Although most of this study’s hypotheses are supported, few limitations per-
sist, which present opportunities for further research. This study tests the
hypotheses with life insurance consumers based on a representative sample
from Taiwan. Future research should test this model with larger random sam-
ples in other contexts. Furthermore, this study has the limitation of having a
cross-sectional research design. With a cross-sectional design, the implications
for CSR activities following a change in customers’ attitudes over time would
not be detected. Future studies should consider a longitudinal and qualitative
study that would provide further theoretical details and application in other
financial sectors. Finally, the way CSR is embedded in the social and economic
system may also differ across cultures and social structures. Future studies can
 JOURNAL OF PROMOTION MANAGEMENT 17

use sample frames of Western cultures to examine the importance of social

and cultural assumptions in relation to CSR and customer behavior.

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