CUSTOMER RELATIONSHIP MANAGEMENT, SERVICE QUALITY AND CUSTOMER SATISFACTION
IN THE LIFE INSURANCE INDUSTRY IN GOA
Thesis submitted in partial fullment of the requirements for the degree of
DOCTOR OF PHILOSOPHY in
COMMERCE to the
GOA UNIVERSITY by
MS. SANTANA FERNANDES Assistant Professor
St. Xavier's College Mapusa-Goa
Under the guidance of
DR. FILIPE RODRIGUES E MELO Associate Professor
St. Xavier's College Mapusa-Goa
MAY 2016
DECLARATION
I, Santana Fernandes, hereby declare that the thesis titled “Customer Relationship Management, Service Quality and Customer Satisfaction in the life insurance industry in Goa”, submitted to the Goa University, Goa for the award of the degree of Doctor of Philosophy is the outcome of the original and the independent research work undertaken by me during the period 2011-2016. The study is carried out under the supervision and guidance of Dr. Filipe Rodrigues e Melo, St. Xavier's College, Mapusa, Goa. It has not previously formed the basis for the award of any degree, diploma or certicate of this or any other universities. I have duly acknowledged all the sources used by me in the preparation of the thesis.
Date:
Place: Santana Fernandes
This is to certify that the thesis titled, 'Customer Relationship Management, Service Quality and Customer Satisfaction in the life insurance industry in Goa', submitted to the Goa University, Goa in the partial fullment of the requirements for the award of the degree of Doctor of Philosophy in Commerce, is the bonade record of the original work done by Ms.
Santana Fernandes during the period 2011-2016 under my supervision. This thesis has not formed the basis for award of any Degree, Diploma, Certicate, Associateship, Fellowship or similar title to the candidates of this University or any other universities.
Date:
Place:
Dr. Filipe Rodrigues e Melo
CERTIFICATE
ACKNOWLEDGEMENT
A heart full of thanks and praise to my Lord for His countless blessings, strength and grace that saw me overcome obstacles and attain my goal. The Lord in His abundance sent His blessings on me in the form of many individuals. I can only render my gratitude and thank you to them, for… “Gratitude is the music of the heart, when its chords are swept by the breeze of kindness”-Author Unknown.
First and foremost I wish to thank the Diocesan Society of Education for permitting me to enrol for the Ph.D. Programme and subsequently for sanctioning me leave to go on a two year Faculty Improvement Programme.
My sincere appreciation to my research guide, Dr. Filipe Rodrigues e Melo for his valuable guidance, suggestions and assistance throughout the study period.
My gratitude to my College Principal, Dr. (Fr.) Walter de Sá for his support and encouragement at all times.
My immense gratitude to the former Head and Dean, Department of Commerce, Goa University, Prof. Y. V. Reddy, present Head, Department of Commerce, Prof.
Anjana Raju and the Subject Expert Prof. Nandakumar Mekoth for your valuable insights, reviews and appraisal that shaped and moulded my research to its realisation.
Due thanks to the Dean Prof. K. B. Subhash and the staff of the Department of Commerce for all help extended.
I am grateful to the UGC for the award of Teacher Fellowship for a period of two years which was much needed to complete the study.
Special thanks to my Mentor, you have been my stronghold. Your prayers, motivation, gentle prodding and unstinting support helped me withstand the most turbulent times.
My dear friends you have been my pillars of strength when condence was shaky, your caring gestures and assurances assisted me to surpass the hindrances.
To my ever supportive friends the Mendonças, you were God-sent angels. I am ever grateful for the timely and seless assistance rendered by you.
My immense gratitude to my parents, my brother and my sister in law for all the
liberties sans responsibilities that made it possible to reach the nishing point.
I duly acknowledge the time and help given by the respondents, both policyholders and insurance advisors of the life insurance companies, viz. Life Insurance Corporation, ICICI Prudential Life Insurance Company, Bajaj Allianz Life Insurance Company and Max Life Insurance Company.
May God bless all of you with all happiness in life and success in all that you do. In the words of Nishan Panwar, “Sometimes it's not about the journey or the destination…
but about the people you meet along the way”. Yes, the journey was long but it was worthwhile because of you.
God Bless You All
Santana Fernandes
TABLE OF CONTENTS
vi
TABLE NO.
PARTICULARS PAGE
NO.
FIGURE NO.
PARTICULARS PAGE
NO.
1.1 2
105 155 158 160 Market share of LIC and the Private Life Insurance Companies for
the last ve years
5.1 Cog Wheel Process of Customer Relationship Management 6.1 Initial Hypothetical Model of CRM and Service Quality 6.2 The Path Design of the Research Model
6.3 Structural Model depicting the interrelationships among Customer Relationship Management, Service Quality and Customer
Satisfaction
LIST OF FIGURES
LIST OF ABBREVATIONS
ABBREVATIONS FULL FORM
FDI Foreign Direct Investment
USD United States Dollar
IRDA/I Insurance Regulatory Development Authority/of India NDA National Democratic Alliance
ICT Information Communication Technology CRM Customer Relationship Management LIC Life Insurance Corporation
IPLIC ICICI Prudential Life Insurance Company BALIC Bajaj Allianz Life Insurance Company
MLIC Max Life Insurance Company
TOPSIS Technique for Order of Preference by Similarity to Ideal Solution TARP Technical Assistance Research Programme Institute
WOM Word of Mouth
SEM Structural Equation Modelling
AVE Average Variances Explained
CHAPTER ONE
CHAPTER ONE
INTRODUCTION AND RESEARCH METHODOLOGY
1.1 Introduction
The insurance industry forms an important sector of an emerging economy like India, as it contributes towards its growth and development. The Indian insurance industry is over 150 years old. The insurance industry in India underwent a sea change with the Liberalisation, Privatisation and Globalisation (LPG) norms and consequently at the opening of the insurance sector to the private sector. This era changed the scenario of the insurance industry.
The monopoly position of the state owned Life Insurance Corporation (LIC) diminished with the entry of foreign insurance providers, which came into India as joint ventures with the Indian counterparts. Till 2015, the stake of the foreign insurance partners had a cap of 26%;
until the Government passed a regulation thereby permitting FDI in the insurance sector to be increased to 49%. In 2014, the insurance sector of the country was ranked at the 11 position in th
the world, in terms of the life insurance volume in USD and later slipped to the 15 position in th
2015 (Swiss Re, 2015). The LPG and the subsequent entry of the private insurance companies, some with their foreign partners made the insurance sector more vibrant and gave a strong boost to the consumer. The consumer now had a choice to choose the provider. Hence, it is pertinent to keep customers satised. LIC also saw its market share declining with the arrival of the private insurance companies. Figure 1.1 depicts the share of LIC and the private life insurance companies from 2011-12 to 2014-15 where the share of LIC on the basis of total premium is steady at around 70%. In 2014-15 the market share of LIC was 73.05% (IRDAI, 2015). The life insurance industry in 2015, had a total of 24 insurance providers; one being LIC and the remainder 23 being private insurance companies.
Figure 1.1: Market share of LIC and the private life insurance companies for the last ve years
Source: IRDAI, 2014-15
The insurance penetration in India i.e. ratio of premium to GDP was pegged at 2.32% in 2000, had scaled to 4.46% in 2009 but later steadily fell and was 2.6% in 2015 (Swiss Re, 2015).The insurance density in India i.e. ratio of premium in USD to the population for the same period has increased from USD 9.1 in 2000 climbed to USD 55.7 in 2010 and in 2014 it reduced to USD 44. This resulted the Indian insurance industry to hike up the global insurance ladder
rd th
from a ranking of 23 in 2000 to 15 in 2015 among 88 countries (Swiss Re, 2015; IRDA, 2000; IRDAI, 2015).
The LPG and the subsequent entry of the private insurance companies, some with their foreign partners made the insurance sector more vibrant and gave a strong boost to the consumer. The consumer, now had a choice to choose the provider. Hence, it was pertinent to keep customers satised. LIC also saw its market share declining with the arrival of the private insurance companies. The Indian life insurance industry in 2015, had a total of 24 insurance providers; one being LIC and the remainder 23 being private insurance companies.
The Indian insurance industry is young, robust and ever growing with a highly untapped market. The penetration rate along with the insurance density is not one which the country can boast about, considering the country being the second largest populous nation in the world.
The Indian insurance industry has one of the largest number of life insurance policies in force
30.22 29.32 27.3 24.61 26.95
69.78 70.68 72.7 75.39 73.05
0 10 20 30 40 50 60 70 80
2010‐2011 2011‐2012 2012‐2013 2013‐2014 2014‐2015
Percentage
Year
Private Life Insurance Cos LIC
Market Share on the basis of total premium
at the global level, making it a highly contending player in the World Insurance Market. Till 1999, prior to the regulatory reforms the life insurance business was solely provided by the state owned corporation – the LIC. Post 2000, the insurance industry made a high sky jump and got the much needed boost. Now with an array of life insurance providers in India, customer has a choice. Hence, insurance companies pay utmost care to deliver best services.
The companies now indulges in customer centric services. Great care and pains are taken to take care of Customer Satisfaction. Thus, the opening up of the sector gives ample opportunities to increase the penetration of insurance as well as the insurance density which at present are only 2.6% and USD 44 respectively (IRDAI, 2014-15). But the potential is magnanimous.
The entry of the private insurance companies also paved the way for technological advancement as there were numerous improved distribution channels. Besides the agents network a need was felt to introduce newer channels that would help to spread the insurance coverage to untapped areas (Nagananthini, 2009). Hence one saw multiplicity of distribution channels from online transactions to tie-ups with banks and corporate agencies.
In a country like India sans social security, income tax is a popular nancial tool among the working class because of the income tax sops that it entails. LIC, which holds the record of having highest number of life insurance policies and caters to different strata of the Indian society; from the High End Individuals to the 'aam admi'. Customers are main pillars of life insurance business (Yadav et al., 2012). In comparison to other small but developed nations the Indian insurance industry is still very much in its nascent stage, due to scepticism from the masses, low means to spend on paying premium coupled with lack of knowledge.
Understanding of the customers' needs and transforming these needs into an available product is just not enough. The insurance companies need to convey the same and bring it to the notice the customers existing and prospective ones (Narayan, 2009).
The Indian life insurance industry has witnessed a change from monopolistic competition wherein LIC was the sole life insurance provider till 1999 to a state of perfect competition in 2015 with a total of 24 life insurance providers in the country. The customer who initially had
no choice but to take what was offered, now is aware of the various choices of products available and is more nancially literate and seeks customized products. The insurance providers are faced with the ardent task of keeping their policyholders satised. The insurance providers need to have in place a well-planned road map to acquire new customers by taking advantage of the highly untapped Indian insurance market as well as take care of the satisfaction of the existing customers, thereby increasing their loyalty and retention.
1.2 Life insurance in the Post - Liberalization era
The 1990s witnessed radical changes in the life insurance industry in India due to the reforms and the opening of the industry to private participation from Indian and foreign insurance providers. This led to the advent of many private insurance players in the life insurance industry and paved the way for a paradigm shift in the insurance scenario; more so in the types of products and marketing of the same via new and multiple channels of distribution. The foreign joint-venture partners who till prior to 2015 could invest up to 26% in the share capital, brought with them innovative ideas and strategies harnessed with latest technological knowledge in their publicity and advertising echoing international trends and standards.
With the inux of the private insurance companies some with international lineage of globally established colossal insurance giants, the magnitude of changes that emerged due to the reforms was immense. The reforms resulted in the enactment of the Insurance Regulatory and Development Authority Act (IRDA) in 1999, on the basis of the recommendation of the Malhotra Committee. Today, the foreign collaborators can increase their stake in the capital of the company up to 49%. With the increase in the much awaited and needed nancial inow the insurance industry will experience a transformation. The projected gures of FDI inow in 2016 in the insurance sector is pegged at ` 12,000 crores (Assocham, 2016). In view of all this, consequently it has been seen that the propensity of the Indian insurance industry is leaning towards becoming “a serious destination in the global insurance market” (Saradha, 2009).
In the post – liberalization era the Indian insurance industry is ever expanding and ever growing and in 2015 has received the much needed llip in terms of insurance coverage,
penetration and density with the NDA Government announcing the Atal Bihari Pradhan Mantri Bima Yojana, 2015. This will gather under its mantle many of the uninsured masses of the country.
The competitive behaviour displayed by the insurance companies in their bid for survival has been extraordinary. The industry has been witnessing a ne diversication in the type of insurance policies offered by the insurance providers, sometimes aggressively in order to maintain or increase their market share. One such advancement that has changed the face and outlook of the insurance industry is the use of technology. The use of multimedia and ICT facilities have revolutionized the insurance industry. ICT is considered as a tool that can be used strategically to spread awareness about insurance and its benets and thus enable to increase the penetration and density of life insurance in the highly potential and untapped market in India. There has also been a highly appreciable entry of multiple channels of distribution different from the traditional age old agency format; which have improved the outreach of the insurance companies.
The four major areas that need to be overhauled by the insurance providers in order to ensure their survival is the introduction of innovative products, versatile distribution, qualitative customer service and protable investments. Designing of insurance products to satisfy the needs of the policyholders needs to be carried out by the use of technology. Technology can also aid in sieving out those prospective policyholders who will prove to be loyal customers to the company. Investing in the right kind of technology can also help build up a strong clientele. Life insurance is a service where customers are treated cautiously as “winners in this business are those who ensure customer delight” (Thyagaranjan et al, 2009)
1.3 Research Questions
The research dwells on the following research questions.
1. Quality of services rendered is very crucial differentiating factor for the life insurance providers in the current era of cut throat competition. Are the life insurance companies able to provide such qualitative products and services to the knowledgeable policyholders?
2. The life insurance providers not only have to extend their customer base but also curb spending on acquisition costs by retaining the existing policyholders by taking care of their satisfaction. Are the life insurance companies successful in maintaining the satisfaction levels of their respective policyholders?
3. Do the life insurance companies selected for the study have a strong Customer Relationship Management strategy in place? What are the main pertinent factors that strengthen and contribute towards building a robust Customer Relationship Management as perceived by the policyholders?
4. Customer Relationship Management has an effect on Service Quality as well as on the Customer Satisfaction of the life insurance companies. How are the three constructs interrelated to one another and how strong a relationship exists between them?
5. The insurance advisors are the face of the insurance providers and the connecting link between the insurance providers and policyholders. As per their perception what are the factors that contribute towards a good Client Relationship Management.
1.4 Research Objectives
The protability of the life insurance companies is founded on three cornerstones, viz.
Customer Relationship Management, Service Quality and Customer Satisfaction. If the life insurance providers take cognisance of the same and ensure that all three strongly work in tandem, the success of the company is denite. The research study incorporates the following research objectives.
1) To evaluate and measure the Service Quality and its dimensions of LIC and the select private life insurance companies.
2) To assess the Customer Satisfaction levels of the policyholders of LIC and the select private life insurance companies.
3) To study the perceptions of the policyholders towards the Customer Relationship Management of LIC and select private life insurance companies.
4) To investigate the interrelationships in Customer Relationship Management, Service Quality and Customer Satisfaction.
5) To analyse the role and perception of insurance advisors of LIC and select private life insurance companies towards Client Relationship Management.
1.5 Research Hypotheses
A hypothesis is a statement of some feature of an item or variables of a factor in a research study. (Agresti & Finlay 1997). The hypotheses of the research study are based on the theoretical background that governs the research study. A good hypothesis states the probable relationship between two or more variables and denes these variables in an effective and assessable way (Gay, 1996). Hypotheses may be expressed as Null Hypotheses (H ) or 0 Alternate or Research Hypotheses (H ).1
The testing of Hypotheses either accepts or rejects the Hypotheses. This testing is carried out by adopting various statistical tests and as per their level of signicance the hypotheses are either accepted or rejected.
The alternate or research hypotheses have been framed for the research study.
1. There is a signicant difference in the perception of the policyholders about Service Quality and its dimensions in the life insurance companies.
2.a. There is a signicant difference in the levels of Customer Satisfaction of the life insurance companies.
b. There is a signicant difference in the Customer Satisfaction levels of the life insurance companies across various demographics of the policyholders
3. There is a signicant difference in the perception of policyholders about Customer Relationship Management of the life insurance companies
4.a. There is a signicant relationship between CRM and Service Quality of the life insurance companies
b. There is a signicant relationship between Service Quality and Customer Satisfaction of the life insurance companies
c. There is a signicant relationship between CRM and Customer Satisfaction of the life insurance companies
d. There exists an interrelationship in CRM, Service Quality and Customer Satisfaction
5.a. There exists a signicant difference in the perception of the Insurance Advisors about Client Relationship Management of the life insurance companies.
b. There is a signicant relationship between Service Delivery and Client Relationship Management
c. There is a signicant relationship between Effective Training and Client Relationship Management
d. There is a signicant relationship between Innovation and Client Relationship Management
e. There is a signicant relationship between Client Satisfaction and Client Relationship Management
The study answers the research questions, the research objectives and the research hypotheses.
1.6 Research Methodology 1.6.1 Research Design
A research design may be described as a master plan or a blue print of framework and methods that may be adopted to attain the research objectives. Research design is necessary to determine the various aspects of research methodology, such as sampling, sources of data, analysis of data, hypotheses testing and adoption of required statistical tools and techniques required to achieve the solution to the research problem. The research study on the Customer Relationship Management, Service Quality and Customer Satisfaction in the life insurance industry is descriptive in nature, and attempts to determine the strength of the interrelationships between the three core areas of research in context of the life insurance industry in Goa.
1.6.2 Sampling Area
The sampling population is the entire state of Goa, which comprises of two districts, North and South. It considers only the individual policyholders of the life insurance companies
selected for the study. The LIC set up its base in Goa in 1986 and as such had a head start of around 15 years before the advent of the private life insurance companies in Goa from 2000 onwards with or without a foreign joint venture partner. At present there are eighteen private life insurance companies operating in Goa. The LIC has a substantial amount of coverage in the state with its many branch ofces, satellite ofces and mini ofces. Some of the private life insurance companies also have at least one ofce in each of the districts of Goa.
1.6.2.1 Brief prole of the state of Goa
Goa, often known as the 'Rome of the east' or 'Pearl of the orient' is famous worldwide as one of the top tourist destination. Geographically Goa has a geographical area of 3,702 sq. kms and boasts of a 101 kms coastline. Goa nests itself between the states of Maharashtra, Karnataka and the Arabian Sea. The state has two districts; north and south, with Panaji as its capital. The demographics of Goa are such that it has a population of 14,58,545 (2011 census) with 8,18,008 (56.08%) of it living in North district. The literacy rate is 87% and the state is well connected by air, road and rail. Goa has one of the highest per capita income in the country of US $ 5512 in 2014-15 and the Net State Domestic Product (NSDP) for the same period was US $ 7.24 Billion (ibef.org). Goa was an erstwhile colony of the Portuguese till 1961, therefore it has a lot of Portuguese inuence in its lifestyle, culture, customs and traditions, cuisine, etc. Though Goa is the smallest state of the country it was one of the top contributor to the national economy till the ban imposed on mining. Tourism and mining are the main backbone of the state economy. It is considered to be one of the richest state in the country and also pepped to be the fastest developing state.
On the life insurance front in the state, there are 18 life insurances Co.'s operating in the state including LIC and have a total of 36 branch ofces as on 31st March, 2015 (Handbook of Insurance Statistics, 2014-15)
1.6.3 Sampling Method
Sampling can be Probability Sampling or Non Probability Sampling. Choosing of respondents to a survey on a random basis without any kind of consideration is a type probability sampling. The sampling method adopted for the research study is convenience sampling. In convenience sampling, the researchers picks respondents that typically t the requisites or are chosen to meet the research objectives. Respondents were selected after asking them a lter question whether they were policyholders or insurance advisors of the life insurance companies selected for the study. The sample was selected without any personal bias and comprised of both genders and covered both the districts of the state of Goa. The respondents belonged to various age groups from across various occupations, educational qualications and income earning levels.
1.6.4 Population
Population may be said to be a set of individuals from whom the required and necessary data maybe acquired to full the research objectives of the researcher. At times it is not possible to measure the entire population; hence responses may be sought from a group of individuals, representing the entire population. The sample is constituted by this group. Sample is picked from the population to collect the required data for the research study. (Weiss, 1999).
1.6.5 Sample Size
On determining the sampling method the next step is the determination of the sample size of the research study. On the basis of the extensive review of literature, the sample size for the study was determined. The selected sample size should be considered after taking into account the population as well as the statistical tools and techniques to be adopted to analyse the gathered data. For the sample companies selected from the existing life insurance companies in Goa, the market share, coverage of both the districts of the state, the number of branches in Goa, premium collected and the country of the foreign partner were considered.
Life Insurance Corporation, being the sole public sector insurance company was selected by
default. From the top ve private life insurance companies, ICICI Prudential Life Insurance Company (IPLIC), Bajaj Allianz Life Insurance Company (BALIC) and Max Life Insurance Company (MLIC) were selected for the study. The number of respondents selected were 400 in case of LIC, and 200 each from IPLIC, BALIC and MLIC totalling to 1000. In case of life insurance advisors 125 each from LIC, IPLIC, BALIC and MLIC were selected on convenience basis equalling to 500 (based on the population of life insurance agents existing in Goa as on 31st March, 2013)
1.6.5.1Brief proles of the life insurance companies i. Life Insurance Corporation (LIC)
Life Insurance Corporation is the sole state-owned and government run life insurance company established in 1956 by merging around 245 insurance companies. The headquarters of LIC are situated in Mumbai. LIC had a total work force of 1,17,453 employees and an active individual agent force of 11,63,604 as on 31 March, 2015. LIC has 8 zonal ofces in st
Delhi, Mumbai, Chennai, Kolkata, Hyderabad, Bhopal, Patna and Kanpur. It had 113 divisional ofces to monitor and control the functioning, 2048 fully computerised branches that help in acquiring business and interact with the policyholders in relation to all services.
LIC has 1381 satellite ofces that help in acquisition and service customers and policies efciently in areas where branch ofces do not exist. The 1245 mini ofces are set up in areas with a population of over 10,000 in order to spread awareness and also improve the insurance density in the country. LIC will complete 60 years of its existence and caters to the insurance needs in both rural and urban areas of the country with its branch ofces spread across the 36 states and union territories. The Corporation has raked a prot of ` 11,000 crores during the
nancial year 2015-16 through its investments. LIC also had the highest claim settlement ratio (98.19%) during the year 2014-15 (IRDAI Report, 2015). In Goa, LIC commenced operations in 1986 and now has a total of 19 ofces which include branch ofces, mini ofces and satellite ofces and a total of 3965 advisors. Recently LIC has started a digital repository system for policies which has evoked a satisfactory and favourable response in the trial phase.
LIC has an extremely good network of 4877 ofces which has enabled it to spread the benet of lie insurance to the rural areas of the country. Besides conducting business in the country LIC has branches in its international operations in the countries of Fiji, Mauritius, UK, Bahrain (which caters to ve Arab countries), Nepal, Sri Lanka, Kenya and Saudi.
ii. ICICI Prudential Life Insurance Company (IPLIC)
This joint venture between the ICICI Bank and Prudential plc, a group of nancial services headquartered in UK began operations in December 2000. It was one of rst private life insurers to set up business in India. The ICICI Bank Ltd. holds 74% stake and 26% by Prudential plc. In the nancial year 2014-15 the insurance company collected a total premium of 153.07 billion. ICICI Prudential Life Insurance Co. has been the leading private life insurance Co. in India for over a decade and a half. It has diverse products to ensure coverage of risk commensurating the requirements of the policyholders. ICICI Prudential Life Insurance Co. has to its credit of having the largest distribution network among the private life insurers. It holds a strong prevalent position in India with 545 branches in 32 states and union territories and a force of 1,32,463 insurance advisors. The claims settlement ratio during 2014-15 was 93.8%. In the state of Goa IPLIC has 3 branch ofces in Panjim, Margao and Ponda and an agent force of 155 (Handbook of Insurance Statistics, 2014-15).
iii. Bajaj Allianz Life Insurance Company (BALIC)
Bajaj Allianz Life Insurance Company was established on 12 March, 2001 and is th
headquartered in Pune. BALIC is a joint venture between Bajaj Finserv Limited of India and Allianz SE of Munich, Germany. 'Bajaj' is a trusted concern in India and Allianz SE is the global giant of nancial services and insurance. Allianz SE is in business of nancial services for over 115 years and its operations are spread across 70 countries globally. Delighting the customer is its principle. Its offers insurance products and solutions which are as per the requirements of policyholders with a lot of transparency in benets. The products range from ULIPS to health insurance suiting the needs of all age and income prole groups. It has a high
penetration across the country in 29 states and union territories with a total of 750 branches.
In Goa, BALIC has two branch ofces and an insurance advisor force of 282. The claim settlement ratio for the nancial year 2014-15 was 96.66%. (Handbook on Indian Insurance Statistics, 2014-15).
iv. Max Life Insurance Company (MLIC)
This insurance Co. was initially Max New York Life when incorporated in 2001 as a joint venture. It was renamed as Max Life Insurance Company Limited in 2012 when the stake in it was bought by Mitsui Sumitomo Insurance Company Ltd, Japan. Now it is a joint venture between Mitsui Sumitomo Insurance Co. a member of MS & AD Insurance group which is one of the top global general insurers and Max Financial Services Limited of India, a multi- business corporation of India. Max Life Insurance commenced operations in April, 2001. In 2011 it was termed as the largest non-bank private life insurance company in India. Its headquarters are in New Delhi. It has a total paid up capital of 2,014 crores and the total sum assured (individual business) is 2,56,115 crores while the total number of policies in force in individual business category is 36,80,527 as on 31.12.15. The insurance company has an advisor force of 43,505. The claims settlement ratio during 2014-15 was 96.03% (Handbook of Insurance Statistics, 2014-15). It has made an impact in the life insurance sector in India through its 215 branch ofces spanning across 25 states and union territories. Max Life Insurance is in business since 2001 and is nancially stable for over a decade and a half. It offers a widespread insurance products in the form of protection and retirement plans and policies as well as long term saving plans. It has a highly efcient agency distribution network and multiple channel partnerships. The Max Life Insurance Co. has four ofces in the state of Goa with an agent force of 703 (Handbook of Insurance Statistics, 2014-15).
1.6.6 Response Rate
Of the selected sample of 1000 life insurance policyholders the responses were collected from 908 respondents; of which 10 were not considered as they were not complete in all respects.
Therefore the study considered 898 responses, giving a response rate of 89.8%. The number
of valid responses from life insurance policyholders as per the life insurance companies are as follows: LIC-366, IPLIC-178, BALIC-173 and MLIC-181. The data collected from the policyholders was used to analyse the rst four objectives of the study. In case of insurance advisors, 343 responses were collected and 23 were discarded as they were not completely
lled by the respondents. A total of 320 questionnaires were considered for the study and the responses from the same are utilised to analyse data in respect of Chapter 7 of the study. The response rate being 64%. The number of valid responses from insurance advisors of the selected life insurance companies being LIC-85, IPLIC-77, BALIC-83 and MLIC-75.
1.6.7 Scope of the study
The research attempts to study the Customer Relationship Management, Service Quality and Customer Satisfaction, in the life insurance industry in Goa. The research study takes into consideration the perception of life insurance policyholders with regards to Customer Relationship Management, Service Quality and Customer Satisfaction. Similarly it also studies the success of Client Relationship Management of the life insurance companies from the viewpoint of the insurance advisors. The study incorporates only the responses of the individual policyholders and takes into account only 4 of the total 18 life insurance companies operating in the state of Goa, i.e. 50% of the total of eight life insurance companies having at least two ofces in the state. The policyholders who possess at least one of the life insurance policy of either Endowment or Whole Life or Money Back or Pension Plan or ULIP are considered for the study.
1.6.8 Sources of data
The research study is basically based on primary data but secondary data is also considered to substantiate the theoretical and conceptual framework. The sources of data utilised for the study are:
i. Primary sources of data
To gather the required data for the fullment of the research objectives of the study two
sets of Questionnaires were prepared. One to procure responses from the individual life insurance policyholders and the other from the life insurance advisors.
ii. Secondary sources of data
The study takes into consideration valid facts and gures related to the life insurance industry and the selected life insurance companies for the study from sources as such the Annual Reports of IRDAI as well as Annual Reports of LIC, IPLIC, BALIC and MLIC have been used. Also various doctoral theses of India and abroad, research based studies and journals; both in online and print format have been considered. Information from various websites is also taken into account to add value to the theoretical bases for the research study.
1.6.8 Data Collection Instruments
1) Questionnaire for life insurance policyholders
A Questionnaire was framed to gather the opinion and perception of the policyholders on various aspects of the research study viz. Customer Relationship Management, Service Quality and Customer Satisfaction. The Questionnaire is sub-divided into four parts. Part A takes into account the various demographics related to the policyholders. Part B has 22 items related to the ve dimensions of Service Quality, Part C has only one item on Customer Satisfaction. Part D has 18 items related to the four factors of Customer Relationship Management (CRM). All responses of the above are measured on a 5 point Likert Scale where 5 being 'Strongly Agree' and 1 being 'Strongly Disagree'. Data culled from this Questionnaire is used to analyse research objectives 1 to 4.
2) Questionnaire for insurance advisors
A Questionnaire schedule was prepared to gather the required responses from the insurance advisors. It consists of Parts A and B. Part A covers the demographic details of the advisors and Part B deals with their responses with regards to their perception of Client Relationship Management of the life insurance companies. All responses are
measured on a 5 point Likert Scale where 5 is for 'Strongly Agree' and 1 being 'Strongly Disagree'. Responses gathered this Questionnaire is utilised to meet research objective no. 5 of the research study.
Both the Questionnaires were self administered to the respondents by the researcher.
1.6.9 Pilot Study
Before embarking on the data collection related to the research study, the Questionnaire that was framed for the policyholders, was pilot tested on 60 policyholders of LIC and ICICI Prudential Life Insurance Company. The feasibility and practicability of the questionnaire and the data so gathered was checked. As per the suggestions received, the nal questionnaire was drafted with due modications. Thereafter the questionnaire was nalised for the actual data collection.
1.6.10 Data Collection Period
The data collection with regards to the individual life insurance policyholders was collected from January 2014 to December 2014. The data related to the perception of the life insurance advisors was collected from December 2014 to May 2015.
1.6.11 Data Analysis, Techniques and Statistical Tools
On collection of the required data for the study, the responses of the respondents were coded accordingly and data entry was made in SPSS. The use of SPSS 20.0 was made of to analyse the data related to objectives 1, 2, 3 and 5. Data Analysis related to objective 4 was carried out with the help of AMOS 22.0 to bring out the interrelationships in Customer Relationship Management, Service Quality and Customer Satisfaction.
Techniques and Statistical Tools
To attain the Research Objectives of the study and to prove the research based hypotheses, various techniques and statistical tools have been made use of:
1. Descriptive Statistics
Descriptive Statistics basically organises, describes and summaries the data in the form of tables and frequencies and also considers the measures of Central Tendency (Mean, Median and Mode). In the research study descriptive statistics were used in order to tabulate the demographic proles of the respondents; both the policyholders as well as the insurance advisors. The data gathered from the primary survey, when described and summarised by way of numbers and in a form which adds value to the data is referred to as descriptive statistics.
Descriptive statistics are used while analysing data in various forms such as means, range and graph. The data collected from primary sources is often organised in tables by calculating the frequency distribution. Descriptive statistics is expressed by way of graphs, charts and tables and it often accompanied by descriptive measures such as average, percentage, etc.
2. Mean Analysis
Mean is the most commonly used measure of centre for quantitative variable. Mean is synonymously used for an average. Mean is the total sum of the data collected from the respondents and divided by the total responses.
3. TOPSIS
TOPSIS is a technique of Operations Research. The full form of TOPSIS is Technique for Order of Preference by Similarity to the most Ideal Solution. Its origin is traced to the 1980's and was originally propounded by Hwang and Yoon. TOPSIS was initially widely used in the
eld of engineering but has slowly made its presence felt in contemporary social sciences research. It is used in cases or situations where multi-criteria decision making choices are to be made in various elds, such as government agencies (Mehrbakhsh et al., 2012), telecom (Chaudhary & Uprety, 2013), nancial services (Vazifedost & Taghipouryan, 2011; Vibha &
Jain, 2011; Havinal & Jayanna, 2013; Hui & Abdullah, 2013; Havinal, 2014; Sehhat et al., 2015) automobiles (Srikrishna et al., 2014), education (Choudhury, 2014), etc. Its use can also be seen in marketing and management as well. One such usage of TOPSIS is to assess Service Quality measurement. It is an aptitude method for determining the ultimate best option from a given alternatives, wherein each option is based on several criteria. In the research study,
TOPSIS is used as a complimentary technique to SERVPERF to assess the dimensions of the Service Quality made up of 22 different variables. While SERVPERF assesses the perception of the policyholders, TOPSIS helps to measure, rank and prioritise the various dimensions and variables cumulatively as well as individually (Company wise). Ranking and prioritization of various options is done on the basis of their closeness to the most 'Ideal Solution'. As per this method, the best alternative is one that has the shortest distance from the positive ideal solution and the lengthiest distance from the negative ideal solution (Raoul et al., 2011). The ideal solution is composed of the best criteria, and the ideal solution comprises the worst. In TOPSIS, “n” different alternatives are evaluated on the basis of “m” different attributes. The attributes being common to the alternatives. It takes into account the alternative which has the shortest distance from the Positive Ideal Solution (PIS) and the one which is the most farthest away from the Negative Ideal Solution (NIS). The most ideal solution would get a rank of 1 and a 0 would denote the worst negative alternative.
Characteristics of TOPSIS
1. It is a practical technique that picks the optimum level of service quality specications and simplies reaching the customer satisfaction. This technique is many times utilised in designing a service.
2. TOPSIS can solve the problem of positive and negative deviations which results in unrealistic results by using the positive and negative ideal solutions. Main aim of TOPSIS is to prioritise the Service Quality dimensions by ranking them.
3. TOPSIS is one the most popular techniques in multi-criteria decision-making. Thus it provides for predicting a long term preference.
4. Multiple attribute or criteria is one of the main basis for evaluation.
Advantages of TOPSIS
1. It is a sound logic that takes into account the reasoning of human choice.
2. It helps in differentiating single values from a matrix that accounts for the best and
3. The computation process is simple.
4. The measures of performances of the alternatives on attributes can be seen on at least for any two dimensions.
5. The high exibility of the technique makes it able to accommodate further extensions and applications to make better choices in various situations.
Why TOPSIS is better than Mean Analysis and advantageous in research studies
Mean analysis only performs the arithmetic mean and gives an average value considering the origin as 0. Thus, mean analysis only gives for approximate answer or an average answer. For
st nd
e.g. If a student scores 100/100 for the 1 exam and then scores 0/100 for the 2 exam, the average is 50%. Whereas TOPSIS performs geometric mean and aims at shortest distance. In TOPSIS calculations the following steps are considered:
First the performance matrix is constructed.
Next the performance matrix is normalized to convert the original data to values.
The ideal and anti-ideal points are then dened.
Weights are assigned to the criteria to represent the relative importance of the criterion. Entropy is made use of.
Finally, the nal overall performance is obtained and or the various criteria is ranked.
“0” is the score or rank for the worst performer and “1” is for the best performer.
Thus, coming back to the example of marks obtained by a student in TOPSIS method, it is possible to rank the student according to the performance of both the terms separately and also where and which term the student has to work harder.
The steps involved in the calculation of TOPSIS as given by Hwang and Yoon, 1995:
1. Normalisation of the Decision Matrix – Equation 1
m 2
Y = X / (√Σij ij i=1 X )ij
th
Where m is the number of alternatives; Xij denotes the performance score of the i alternative in terms of the j dimensionsth . Normalisation of the matrix transforms the different values and scales amongst the criteria into uniformly measurable units to
facilitate comparisons of various alternatives. Assuming Xij is the appraisal Matrix R of alternative 'i' under appraisal criterion 'j'; where, X r of the normalised appraisal ij matrix R be calculated by normalised method to attain the objective.
2. Construction of the Weighted Normalised Decision Matrix WY – Equation 2 W*Y = W *Yj ij
Where, W denotes the weight of the j dimension. Each criterion to be appraised j th
assumes different levels of importance and hence weights are to be used to determine the level of importance. Entropy is one such method. Weights is denoted by Wj. The Weighted Normalised Matrix is built by multiplying the normalised appraised matrix Yij with the weight W so determined to attain Yj ij
3. Determination of the Ideal and Negative Ideal Solution – Equation 3 & 4 Where, S = Max (W *Y ) j+ j ij
S = Min (W *Y )j- j ij
This step allows the determination of A and A – in order to calculate the distances. The +
A denotes the most preferred alternative, whereas the negative ideal solution A- . +
Weights are assigned on the basis of Entropy. Entropy is an important concept in elds of research of social sciences, physics and I. Theory. Appraisal of weights on the basis of decision making weights determined. Entropy facilitates to x importance on that criterion which shows more divergence (Abololvand et al., 2013). Knowledge of the relative importance of each criterion is required to tackle Multi Criteria Decision Making problems (Ibid., 2013). Entropy calculations comprises of three measures.
Entropy (Ej), Degree of Divergence (dj) and importance weight (wj).
4. Finding the Euclidean Distance of each alternative. Here, the Euclidean distance of an
+ -
alternative S and Sj j Equation 5 & 6
+ n + 2
D =√ Σi i=1(S -W Y ) where i= 1,2………mj j ij
- n - 2
D = √Σ i=1(W Y – S ) where i= 1,2………mi j ij j
5. Calculate the relative closeness to the ideal solution. The relative closeness of the ith
alternative to the ideal solution Equation 7
- + -)
C = D / (D + Di i i i
6. Selection of the Preference Order 4. Analysis of Variance (ANOVA)
A statistical technique which is used to analyse the quantum of variance existing in the research data set in order to test the inequality among the means of population. This test was propounded by Sir R. A. Fisher and the test statistic of ANOVA is the 'F' statistic. ANOVA tests the signicance of the existing difference between more than two sample means at a given time. Through simultaneous testing it can conclude whether the samples have been drawn from populations having similar mean. Through ANOVA homogeneity is tested by checking out the difference among the different groups of data. Investigation of factors which are likely to inuence the dependent variable is carried out in ANOVA.
5. Regression Analysis
Regression is used to determine the statistical relationship between variables. In simple Regression, there are only two variables, one variable is the independent one and is the cause of the behaviour of the dependent variable. Regression Analysis tests whether there is a physical occurrence in which the independent variable can have an impact on the dependent variable. The fundamental relationship between the independent and dependent variables is given by the following equation:
Y= a + bX
Regression Analysis is a statistical method to deal with the formulation of mathematical model depicting relationship among variables which can be used for the purpose of prediction of the values of dependent variable, given the independent variables. Where there exists two or more independent variables such kind of relationship is termed as Multiple Regression.
6. Structural Equation Modelling (SEM)
A statistical technique for multivariate can be studied by use of SEM. Standard multivariate analysis techniques such as Regression Analysis, Factor Analysis and Analysis of Variance are made use of in SEM. SEM analyses multi relationships between dependent and independent variables, both observed and unobserved (latent) simultaneously. Software's such as STATA, LISREL and AMOS (Analysis of Moments) facilitate the SEM Analysis.
SEM is a methodology for representing, estimating and testing a series of relationships existing between variables, both measured and latent.
Specication of a model and its path design is one of the major pre-requisite of SEM. A model diagram shows the specied path of the multi relationships existing between the variables.
(Suhr, 2006 ). SEM is a technique which represents, estimates and tests a theoretical path of linear relations between constructs (Rigdon, 1998).
Two goals of SEM are:
1) To understand the patterns of correlation among a set of variables.
2) To explain as much as their variance as possible with the model specied (Kline, 1988).
The purpose of the model, in the most common form of SEM, is to account for variations and covariation of the measured variables. Path Analysis (e.g. Regression) tests models and relationships among measured variables. Conrmatory Factor Analysis (CFA) tests models of relationship between latent variables and measured variables which are indicators of common factors.
SEM is a highly exible and comprehensive methodology. This methodology is appropriate for investigating various concepts. Multiple Models can be tted in a single analysis. AMOS examines each pair of models wherein one model can be derived by putting restrictions on the parameters of the other. It delivers a test of univariate normality for every observed variable along with a test of multivariate normality and helps in detecting outliers. IBM SPSS AMOS prepares a path design and a diagram as a model specication and indicates parameter estimates graphically on a path diagram.
SEM is also called as covariance structure analysis or covariance structure modelling. Some other names that it is known by are Causal Modelling and Path Analysis. SEM basically deals with testing of hypotheses about relationships that exist between variables. SEM is a very
exible statistical technique. It is comprehensive in nature and incorporates within it many other statistical tests and techniques like Multiple Regression, Conrmatory Factor Analysis, Path Analysis and ANOVA. In the running of SEM the two main requisites being formal
specication of a model and a covariance or observed relationship between variables in the model. Another plus point of SEM is that it allows running of multiple Dependant Variables (DVs).
Steps involved in SEM Analysis
Step 1 – Model Specication which is done by drawing pictures using SEM procedure.
Step 2 – Parameter Estimation is performed by the SEM software. It is an iteration process.
The nal result that shows is a set of parameters that produces the best t.
Step 3 – Assessment of Fit is done through the software which facilitates the proper model specications before estimation of Parameters. The estimates of the parameters are run and are generated on the AMOS / Path Diagram as well as in the text output. Model Fit Statistics are generated after the estimation of Parameters.
1.7 Structure of the Thesis
The research study is sub-divided into a total of eight chapters, each dealing exclusively with the research objectives. The chapters encompasses the theoretical works related to the objective, the data analysis by adopting various techniques and statistical tools, which is followed by the testing of Hypotheses.
Chapter 1: Introduction and Research Methodology
This chapter introduces the proposed research study with an overview of the life insurance industry in India; its growth and future. Further the chapter spells out the research objectives and the research methodology adopted in the fullment of the research objectives.
Chapter 2: Review of Literature
The existing doctoral works and literature in the form of research papers and articles in various books, journals have been thoroughly reviewed. Viewpoints of various researchers have been incorporated to create a strong theoretical and conceptual framework for the study.
The chapter covers the main concepts related to Customer Relationship Management, Service
Quality and Customer Satisfaction in the insurance industry, as well as the inter dependence of these concepts. The role of insurance advisors in the success of Client Relationship Management is also covered.
Chapter 3: Service Quality in the life insurance industry
This chapter entails the various Service Quality Measurement Scales existing and the differences between them. It also discusses the various elements of Service Quality and the importance of Service Quality in the life insurance industry. Analysis with respect to the measurement, importance and ranking, both company wise and dimension wise, is covered in the chapter.
Chapter 4: Customer Satisfaction in the life insurance industry
Customer Satisfaction plays a dominant role in the success and retention of the customers.
The chapter includes the above as well as the analysis with regards to the perception of policyholders towards Customer Satisfaction across various demographic factors.
Chapter 5: Customer Relationship Management in the life insurance industry
The Chapter highlights the nuances of Customer Relationship Management and the perception of the policyholders on various factors that contribute towards its successful implementation in the insurance industry. The various Customer Relationship Management strategies practised by the select life insurance companies is briefed in this chapter. Adoption of the Customer Relationship Management, Measurement Scale, the Factor Analysis and the relation to Customer Satisfaction and Service Quality is presented in the chapter.
Chapter 6: Interrelationships among Customer Relationship Management, Service Quality and Customer Satisfaction in the life insurance industry
This Chapter integrates the inter dependence of Service Quality and Customer Satisfaction on Customer Relationship Management and the inter existing relationships among the three
main constructs of the study, i.e. Customer Relationship Management, Service Quality and Customer Satisfaction, where Service Quality acts as the intervening variable. as the intervening variable. The interrelationships are brought by with the help of Structural Equation Modelling. The chapter brings out the core or the crux of the research study undertaken.
Chapter 7: Role and perception of insurance advisors on Client Relationship Management Incorporation of the role played by the insurance advisors in the success of Client Relationship Management Programmes of the insurance company is done in this chapter.
Data analysis with the factors contributing to the success of Client Relationship Management is brought out with series of Multiple Regression Analysis.
Chapter 8: Summary and Conclusion
The study culminates in this chapter where it summarises the ndings of the research objectives, states the conclusions, gives the theoretical contributions, limitations of the study, directions for further research and the managerial implications,.
CHAPTER TWO
CHAPTER TWO
REVIEW OF LITERATURE
2.1 Introduction
Review of literature is needed to give a theoretical base to the research problem to be studied.
The review of literature also helps in pointing out the research gap which can be explored fully by the researcher. Review of literature gives a selection of research works that are similar to one's area of research. A review describes, summarises, evaluates (Boote & Beile, 2005) and gives a strong base of theoretical framework to base one's research study. Review of literature presents previous research works which are related to the research questions and research objectives. It provides an insight to logically proceed with the research study as well avoid overlapping of content. It is also an important aid to be aware of various statistical tools and techniques used by researchers and academicians in the research studies (Gay L.R. et al., 2006).
This chapter presents the reviews from doctoral theses, research works in various journals;
both print and online associated with the thrust of the research topic. The areas covered are related to the insurance industry, service quality, use of TOPSIS and the service quality measurement scales, customer satisfaction, customer relationship management. The reviews are also related to the relationships between customer relationship management and service quality, service quality and customer satisfaction, customer relationship management and customer satisfaction and the link between customer relationship management, service quality and customer satisfaction and the role of advisors in the enhancement of CRM.
2.2 Insurance Industry of India
Wadekar Laxman Ashok (2001) assessed the potential for innovativeness and adoption of technology in the public sector of the insurance industry. The sample constituted of 524 managers of LIC and GIC. A sample of employees of LIC and GIC were also selected. One questionnaire was given to the managers to measure the focus of control and the other to the
employees to assess people's perception of innovation and people's sense of ownership of the organisation. It was found that the perception of organisational climate as support for innovation and change was found to be low in both LIC and GIC. It was found that the attributes of conict management, communication and problem management were not paid much heed to by the managers.
Mushtaq Ahmed R. (2007) evaluated the perception product portfolio and product mix in the existent competitive environment created by the entry of the private life insurance companies. The responses of the policyholders in different segments of life insurance market were assessed in Bangalore city. The sample comprised of 200 policyholders, (100 each of LIC and 100 of two private insurance companies) and 50 agents: 25 each of LIC and private insurance companies. Data analysis showed that all insurers assigned due weightage to the properly formed protable marketing mix for the insurance business. All insurance companies acknowledged the importance of agents as the prime channel of distribution of insurance products. It was found that the insurance market was dominated by personalised and customised selling of products. LIC and the private life insurance companies have developed their own Customer Relationship strategies to strengthen their relations with policyholders as well as to acquire new customers.
Singh Harikrishna Hemendra (2009) assessed the impact of liberalisation on LIC, while understanding the reasons for change. The customer satisfaction, pre and post liberalisation was also assessed and a new operational framework to market the life insurance services in the changed environment was developed. The primary data was collected from a sample of 247 customers from Pune selected by way of stratied sampling. 59 agents were considered and a total of 63 executives of LIC and private life insurance companies. The statistical tools of descriptive frequency analysis, Z test, one tailed test were used to validate the hypothesis of the study. The study found that the competition had intensied every year since liberalisation and the entry of private insurers. The data analysed indicated that the customer satisfaction of
LIC has improved from 2.44 from pre-liberalisation on a 7 point scale to 4.39 in the post- liberalisation period. It was noted that the customer satisfaction of the private insurance companies was rated higher at 5.07. The study concluded that liberalisation had a positive effect on the insurance sector.
Manickavasagam V. & Pandi Kumar M.P. (2010) researched on the preferences of life insurance policyholders towards acquisition of products. The main objectives were to study the preferences of the policyholders towards acquisition and to identify age, gender, qualications and income differences during the acquisition of policies. The statistical tools used were Mann Whitney, Krusal Wallis and Weighted Average Methods. It was concluded that personal life risk cover, and reduction of tax burden was given topmost preference by the policyholders. It was proved that there is no signicant difference among various age groups while personal life risk cover is a very important factor.
2.3 Service Quality
Cronin J. & Taylor F. (1992) re-examined and measured the service quality. The researchers considered only the 22 performance items of the SERVQUAL. They also founded the SERVPERF scale. Data was collected from two rms each of four service industries, viz.
Banking, pest control, dry cleaning and the fast food. LISREL 7.0 was made use of to analyse the data. The results suggested that the service quality was a strong antecedent of satisfaction of customers and it was customer satisfaction that inuenced the buyers repurchase intention rather than service quality. The SERVPERF measured service quality as an attitude. The
ndings showed that besides service quality, price, availability of product and convenience could help in increasing customer satisfaction.
Sangale Tukaram Gorakh (1993) studied the marketing of services of LIC in the Satara division. The researcher evaluated the preferences and awareness of the policies among the policyholders. The promotional measures, the market segment and the distribution channels
were studied and the service quality was assessed. A total of 650 policyholders from every branch in the ve districts of Satara division constituted the sample for the study. The statistical tools used for analysing the data were mean analysis, standard deviation, Chi Square and STATPAL software package was used. Most of the policyholders were not aware of the premium calculation and innovative products unless they were made aware by the agents. The study concluded that the customers were satised with the services of LIC and its agents.
Ruyter Kode et al., (1996) integrated the service quality and service satisfaction and tested the same in a healthcare set up in Netherlands. The number of respondents were 291. The SERVQUAL scale was used to measure service quality. The study ndings proved that service quality is an antecedent of service satisfaction. The perception of the performance of service was found to be the most important factor of service quality. It not only had a direct effect with service quality but also an indirect effect with service quality. The study concluded that the service satisfaction was a strong inuencer of market performance and service quality.
Brady Michael K. et al., (2002) extended the study of Cronin and Taylor (1992) and suggested that service quality may be studied only by the performance component (SERVPERF) and not SERVQUAL. Two studies were conducted in service industries of sports and entertainment and study three in healthcare, long distance carriers and fast food.
Satisfaction was measured on a 10 item scale. The study proved that relationship did exist between service quality and customer satisfaction. It also justied the use of the 22 item SERVPERF scale. Clarication of the relationship between service quality and satisfaction was done and they extended the SERVPERF to other service forms.
Ahmad Afaine & Sungip Zalina (2008) conducted a study on Service quality in the Malaysian insurance industry. The researchers identied the gap between the perceptions and
