The Effect of Service Quality on Customer Satisfaction: A Study on Four Selected Insurance Companies in Hossana Town, Hadiya Zone, SNNPR, Ethiopia

Abstract

The liberalization of the economic system in Ethiopia enabled the emergence of private insurance companies and had created competitive environment in the insurance industries. The motives of this study was examiningthe effects of service quality on customer satisfaction in four selected insurance companies of Hosanna town, SNNPR. This research was carried out through cross-sectional survey design and mainly based on data collected through questionnaires. The correlation and multiple regressions were used to analyse collected data. The result of individual companies and total Gap analyses indicates that the mean score of customers’ expectations exceeded perceptions in all five dimensions while, findings suggest that selected insurance companies need to improve all the dimensions of service quality.Therefore,regression analyses responsiveness had relatively strong significant and direct effect on customer satisfaction with beta value of .376 and followed by reliability with beta value of .327, tangibility with beta value of .187, empathy with beta value of .149, and assurance with beta value of .113 respectively.Based on the research results, it is recommended for the selected insurance companies to improve their Service.

Keywords: Tangibility, Reliability, Assurance, Responsiveness, Empathy

DOI: 10.7176/EJBM/11-22-06

Publication date: August 31^st 2019