The relationship between intellectual capital on balanced scorecard performance in life insurance agencies in Malaysia: Mediated by innovation leadership culture

The insurance sector assumes a key player in the development of the economy. It contributes to long-term investments, provide employment opportunities, and act as rescuers to households and companies from loss of income and business losses, respectively. However, due to economic issues, changes in regulations, technological advances, and still maintaining the traditional ways of measuring financial performance, some insurance companies are dealing with a few problems. Thus, this study is undertaken to determine the influence of certain variables on life insurance performance in Malaysia. Specifically, the objectives of the study are to (1) determine the relationship between human capital, structural capital, relational capital and balanced scorecard performance, (2) investigate the relationship between innovation leadership culture and balanced scorecard performance, (3) examine the relationship of innovation leadership culture as a mediator between the relationship of human capital, structural capital, relational capital and balanced scorecard performance, and (4) discover the relationship between human capital, structural capital and relational capital with innovation leadership culture. A survey is employed and an online questionnaire is used to obtain information from the agency sales managers of life insurance agencies in Malaysia. Four conclusive findings are established from the study. First, human capital influences the internal and financial perspectives while structural capital influences only the internal perspective. Second, both structural capital and relational capital influence the innovation leadership culture. Third, the innovation leadership culture influences the balanced scorecard performance; and finally, the innovation leadership culture mediates the effect of structural capital and relational capital on the balanced scorecard performance. The findings of this study suggest that innovation leadership culture is a crucial factor for improving the balanced scorecard performance of life insurance agency in Malaysia. The study concludes with a discussion of theoretical and practical implications, limitations of the study, and suggestions for future research.