ReplicationFile: The Impact of Life Insurance Companies’ Reputations on Policyholders’ Surrender Behavior

Replication package for the paper: The impact of life insurance companies’ reputations on
policyholders’ surrender behavior.<br>Abstract: The impact of reputation of insurers on its
market performance has long been a significant issue. Using data from China’s
life insurance industry from 2011 to 2021, this study combines ChatGPT with
active learning to construct the perceived reputations of Chinese insurers. We
find that reputation is negatively associated with surrender volume. Further
results show that the negative reputational effect on surrender is more salient
in positive sentiment while the reputational effect with negative sentiment is
mainly realized through the negative events of lawsuits. A positive reputation
matters mainly in financial soundness, customer service, and corporate social
responsibility, while managing negative reputation risks is particularly
important for corporate governance and government relations. Finally, the paper
finds that policyholders prioritize insurers’ reputation when inflation,
unemployment, and interest rates are low or when term spread is high.
Policyholders are also more sensitive to larger insurers’ reputation in a more
dynamic market.