Procedural Justice Complaints Resolution Strategies and Customer Satisfaction in Kenya’s Insurance Industry

Abstract

Insurance industry is one of the world’s biggest and growing industries in the world and more so a cushion of the economy. Its stability and growth is therefore paramount to economic performance of countries including Kenya. However, with the increasing competition insurance companies have had to refocus on various strategies aimed at maintaining profitability. Maintaining a loyal customer base has seen insurance firms invest in various marketing strategies among them complaint resolution strategies so as to have an ever satisfied clientele. The purpose of this study therefore was to establish the effect of procedural justice customer complaint resolution strategies on customer satisfaction. The study employed an explanatory survey design and targeted 10 insurance companies based in Nakuru Town operating and licensed by the commission of Insurance in Kenya as at December 2014. The study targeted 186 customers of insurance services from a total population of 2400 customers. A self administered questionnaire was used to collect primary data. Descriptive and inferential tests such as Pearson correlation, Exploratory Factor Analysis and Multiple Regression Analysis were performed using SPSS. Exploratory factor analysis was used to validate and test the indicators of the preconceived complaints resolution variables. The study revealed four dimensions of complaint resolution strategies; Procedural justice strategies (Timing Communication, Decision control, and Effort) accounted for 56 % ( R) of the total variance hence justice theory on complaint resolution is valid in developing countries including Kenya. Results of the Hypothesis testing via multiple regression analysis indicated that procedural justice factors were significant (p<0.05) and accounted for 33.5% ( R²) of customer satisfaction. The study concludes that customer complaints resolution strategies are an important feedback mechanism to establish customer satisfaction levels and insurance firms are therefore advised to invest in them. Further, the study recommends that Timing, Effort, Decision Control and communication related strategies should be pursued by business firms in the insurance industry. A comparative study with special emphasis on managers’ perspectives could as well be undertaken.

Keywords: Customer satisfaction, Procedural Justice, Customer complaints resolution strategies