THE INFLUENCE OF BASIC PSYCHOLOGICAL NEEDS ON THE PERFORMANCE OF INSURANCE AGENCIES: A QUANTITATIVE ANALYSIS OF CLIENT ACQUISITION
DOI:
https://doi.org/10.35631/AIJBES.829012Keywords:
Basic Psychological Needs, Self-Determination Theory, Client Acquisition, Insurance Agents, Sales PerformanceAbstract
Background: The role of financial incentives as a major determinant of sales performance is widely explored. However, little research examines the impact of psychological need satisfaction on Client Acquisition (CA) in emerging markets such as Malaysia. Drawing on Self-Determination Theory (SDT), this study conceptualises Basic Psychological Needs Satisfaction (BPNS) as Agent Empowerment (autonomy), Professional Efficacy (competence), and Organisational Synergy (relatedness). Methodology: A quantitative pilot study was undertaken with 50 life insurance agents in Malaysia to examine preliminary relationships, test the reliability of the measures, and assess the viability of the suggested research model. The pilot study was conducted with 50 life insurance agents in Malaysia to investigate preliminary relationships, assess the properties of the measurement scales, and evaluate the feasibility of the proposed research model. Accordingly, data collected from a structured questionnaire were analysed using IBM Statistical Package for Social Sciences (SPSS) Statistics (v.29) through descriptive statistics, Cronbach’s Alpha, Pearson’s correlation, and multiple linear regression. Results: Bivariate correlation analysis indicated that Agent Empowerment, Professional Efficacy, and Organisational Synergy were significantly positively related to CA (p < .001). The total regression model explained 47.7% of the variance in CA (R2 = .477, F = 12.412, p < .001), a moderate effect size. Conversely, in the multivariate model, none of the independent variables was statistically significant (p > .05). This reduction signifies substantial shared variance among the psychological variables, possible multicollinearity, and the role of unmeasured structural and market factors. Conclusion: Findings reveal that satisfaction of basic psychological needs alone is insufficient to explain objective sales performance and underscore the need to couple motivational models with contextual and market-contingency frameworks. Furthermore, insurance companies are encouraged to complement empowerment and motivational efforts with structured sales training, strong leadership support, Customer Relationship Management (CRM) technology, and a competitive commercial positioning to enhance CA.
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