Topic – “The impact of service quality on

customer satisfaction in the insurance

industry”

Research Report
Submitted By
Siddhant Pandit
MAM – 5th Semester
(2017-22)

Under the guidance of

Prof. Ishvinder Singh Ahuwalia
In partial fulfilment for the award of
“Masters in applied management”
Doon Business School
Affiliated to Uttarakhand Technical University
Dehradun, Uttarakhand

1
 Certificate
This is to certify that Siddhant Pandit student of Doon Business School
from Uttarakhand Technical University has done his semester project on
Marketing of Services from 20th September 2019 to 5th December 2019.

This project work entitled “The impact of service quality on customer

satisfaction in insurance industry” embodies the original work done by
him.

Date :

Prof. Ishvinder Singh Ahuwalia

2
 Acknowledgement

I would like to express my special thanks of gratitude to

my teacher Mr. Ishvinder Singh Ahuwalia, who gave me
the golden opportunity to do this wonderful project of
Marketing of services on the topic – “The impact of
service quality on customer satisfaction in insurance
industry”.
It provided me the opportunity to learn at deep level to
prepare this report and supported me throughout this
project with utmost cooperation and patience.
Thank you, Date :
Siddhant Pandit
0171MAM039

3
 Table of contents

Topic No. Title Page No.

1 Executive summary 5
2 Introduction 6-7
- Service quality
- Measuring the quality of
service
- Service quality &
customer satisfaction
3 Literature review 8-19
4 Research Methodology 20-21
- Statement of the problem
- Objective of the study
- Geographical scope
- Research design
- Data collection method
5 Data analysis & 22-29
Interpretation
- Experience with the life
insurance industry
- Customer satisfaction
analysis
- Service quality dimension
interpretation
6 Conclusion 30
- Recommendations
Annexure 31-37
Bibliography 38-39

4
‘’A study on impact of service quality on
customer satisfaction in insurance
industry’’

1. Executive Summary:

Liberalization of the financial services sector has led to insurance

companies functioning increasingly under competitive pressures; so
companies are consequently directing their strategies towards
increasing customer satisfaction and loyalty through improved
service quality.
The study aimed to investigate the impact of service quality on
customer satisfaction of Kotak Mahindra, Max Life and Aditya Birla
Sun Life. These were randomly selected from customers of
insurance companies located in Dehradun. The primary data has
been collected from 150 respondents from Dehradun City. The study
found that customer expectations and perception towards
dimensions of service quality have more impact on customer
satisfaction.
The gap scores of Kotak Mahindra’s responsiveness & reliability
factor has ample room of improvement. These results would help the
service managers to efficiently allocate attention and resources
among these dimensions on the differential basis, consistent with
their customer priorities. These findings can be transformed into
effective strategies and actions for achieving competitive advantage
through customer satisfaction and retention.

5
2. Introduction:
The service industry has witnessed rapid growth in the past few
decades in both the developed as well as developing countries. Also,
the insurance industry like many other service industries (Finance,
Marketing, etc) is facing a rapid growth. Meeting and exceeding
customer’s needs and expectations, and providing the best
satisfaction experience in various market sectors, is a necessity,
which is challenging the industries globally today.

Service quality:
Service quality takes a prominent position in the marketing
management literature. Service quality is usually defined as the
customer’s impression of the relative inferiority/superiority of a service
provider and its services, and is often considered similar to the
customer’s overall attitude towards the company.
It is necessary that managers in the various administrative levels, and
the staff who provide the service know how to measure the quality of
service, know the specification of high quality service which meets the
needs of clients and work to meet these needs, in order to get client’s
satisfaction to achieve the goal sought by companies to increase their
profitability. Recently, researchers have demonstrated that service
quality is determined by customer satisfaction or dissatisfaction with
service experiences and that service quality, in turn, influences
customer loyalty.

Measuring the quality of service:

The achievement of the quality of services is a goal and a marketing
tool at the same time, because achieving high quality services leads
to achieving the clients’ satisfaction, so companies must measure the
quality of services. Parasuraman and other researchers developed a
sample called SERVQUAL for measuring the quality of service.
SERVQUAL evaluates these five distinctive dimensions; these
researchers have also felt that these five dimensions are able to
access the aspects of the original ten dimensions, and these
dimensions are:
Tangible things – material facilities, equipment, tools and the
appearance of the workers and employees.

6
Reliability – the ability to perform the promised service accurately and
reliably.
Responsiveness – the desire to help customers and provide good
service.
Safety – knowledge and politeness of staff, their ability to inspire and
create confidence for the consumer.
Empathy – personal care about the consumer and personal attention
provided by the company to its customers.

Service quality and Customer Satisfaction:

Research has shown that the quality of services and the achievement
of customer satisfaction and loyalty are fundamental for the survival
of insurers. Life insurance consists largely of credence properties and
insurance providers should engage themselves in relationship-
building activities that emphasize buyer-seller interaction and
communication.
The service quality dimensions could be a basis for differentiation of
the insurance players that could be developed into a sustainable
competitive advantage for the players in the long run and they also
concluded that non-price differentiation instruments have a better
potential than price differentiation, because any reaction from the
competitors to match non-price differentiation may require changes in
the entire service strategy.
Just as customer satisfaction and delight can lead to customer
repurchase, retention and loyalty; customer dissatisfaction can also
lead to customer complaints, service discontinuance, service-switch,
and higher customer-loss rates.
Satisfaction is therefore a psychological state that ensures when the
emotion surrounding prior expectations of service quality is
contrasted with the customer’s evaluative post-consumption
experience with the service.

7
3.Literature Review:
S.No. TitleTitl Author Publish Objective Findings
. e er
1. The Agustina America Its objective is Five
level of Hanafi; n to identify: dimensions of
service Universit Journal  The level the quality
Indonesia.pdf
quality y of of of quality service:
and Sriwijaya Applied of service,  Physical
custome , Science  Client evidence
r Indonesi s satisfactio  Reliability
satisfact a n,  Responsive
ion of  The image ness
the of the  Assurance
insuranc company,  Empathy
e while dealing Depicts that
industrie with the they are not at
s in insurance the optimum
Indonesi companies in level, where it
a. Indonesia. should be.
So, the
customers are
not satisfied
with the
insurance
industries.
2. Impact Students IOSR  To study  It was found
of of M.Sc. Journal the effect that all
service in of of service SERVQUAL
quality Service Busines quality on dimensions
on Manage s and consumer have
custome ment, Manage satisfactio significant
Sri Lanka.pdf r Institute ment n. effect on the
satisfact of HR  To level of
ion with Advance determine customer
referenc ment, whether satisfaction
e to life Universit gender in life
insuranc y of and insurance
e Colombo profession industry.
services , Sri are  Customers
in Sri Lanka influence of public
Lanka. on sector are

8
 customer more
satisfactio satisfied
n. than private
sector.
 Assurance
is the key
factor to
decide to
purchase
life
insurance
policy.
 Intangible
factors
influence
the
customers
to satisfy
with their
life
insurance
policies.
3. The Dr. Internati To find out There is a
impact Kamal onal the impact of variation in the
Jordan IC.pdf of Ahmad Journal service attitudes of the
service Al of quality in its sample
quality Qudah, Manage dimensions individuals
on America ment & (COMPETEN towards the
custome n Informati CE, dimensions of
r Universit on CREDIBILIT service quality.
satisfact y of Technol Y,
ion of Madaba ogy RELIABILITY
Jordan ,
Insuran RESPONSIV
ce ENESS,
Compan ASSURANC
y. E,
TANGLIBLE
S,
COMMUNIC
ATION) on
customer
satisfaction.
9
4. Relation Dr. Journal  To study  It shows that
ship Sunayna of the customer’s
between Khurana; Researc relationshi perception
Chandigarh.pdf
service Chandig h in p between toward
quality arh Marketin service tangibility
and Group of g quality and dimension
custome Colleges customer of service
r , Mohali satisfactio quality has
satisfact n. the greatest
ion: An  To study impact on
empirica the effect customer
l study various satisfaction
of dimension followed by
Indian of service competency
Life quality on and
Insuran customer credibility.
ce satisfactio  Responsive
Industry n. ness,
. reliability,
empathy
and
assurance
dimension
of service
quality have
the
negligible
impact.
 The results
also show
that
customer
expectation
toward
credibility
dimension
of service
quality has
the greatest
impact on
customer
satisfaction
followed by
10
 assurance
and
competency
.
5. Analysin Masood Journal  The  It
g Siddiqui; of purpos confirms
custome Jaipuria Targetin e of this the need to
Lucknow.pdf r Institute g, article tailor research
satisfact of Measure is to techniques of
ion with Manage ment explore determining
service ment, and and service quality
quality Lucknow Analysis Consequently attributes,
in life for , confirm the developed
insuranc Marketin underlying in the West to
e g dimensions the context of
services of consumer Indian life
. perceptions Insurance.
of service  The
quality vis- à - better the
vis life perceive
insurance d service
sector. quality,
 It has the
been higher the
attempt satisfaction
ed to with agents,
underst functional
and and services and
measur company and
e therefore with
the complex overall
and satisfaction.
interdepende  For
nt improvin
relationships g
between customer
service- satisfacti
quality on of life
dimensions, insuranc
satisfaction e
dimensions industrie
and overall s, it
satisfaction should
11
 with life incorpora
insurance te
services. necessar
y
changes
in service
quality aspects
in accordance
with
socio-
economic
environment of
that nation.
6. Custom Norazah UKM It empirically  Consum
er Mohd Journal examines the er
Satisfac Suki; Article effects of confiden
Malaysia.pdf
tion with School Reposito service ce in the
service of ry quality on insuranc
delivery Internati customer e
in the onal satisfaction industry
life Business with service is
insuranc and delivery in expande
e Finance the life d when
industry: Labun, insurance consume
An Universit industry. rs notice
empirica y and
l study. Malaysia experien
Sabah ce an
increase
in
product
transpare
ncy and
service
standard
s by life
insuranc
e
providers
.
 The
empirical
examinat
12
 ion of the
factors
that
influence
customer
satisfacti
on with
service
delivery
in the life
insuranc
e
industry
(i.e.
assuranc
e,
reliability,
tangibles
,
empathy
and
responsi
veness)
advance
s the
understa
nding of
these
construct
s and
their
linkage
to
deploym
ent
behaviou
r for
purchasi
ng life
insuranc
e.
7. Effects Edinburg Journal  To  Custome
of h of examin r’s
13
 perceive Researc Financia e the expectati
d cost, h l anteced ons of
service Explorer Services
Effects of perceived
cost, service quality, and customer satisfaction on health insurance service continuance.pdf
ents of service
quality, Marketin customer quality
and g satisfaction in and
custome the health especiall
r insurance y their
satisfact service perceptio
ion on context, n of the
health including total cost
insuranc customers’ associate
e prior d with the
service expectations service
continua of their will
nce. insurance significan
service tly
quality; their determin
perception of e how
the total costs they
of the perceive
services; and the
their quality of
perception of that
the quality of service.
the services  Custome
received. r’s
 To service-
examin quality
e the perceptio
influenc n will
e of the substanti
custom ally
ers’ determin
satisfac e their
tion level of
on their satisfacti
behaviour on with
al intention the
toward service.
continuing  Custome
or r’s
discontinui satisfacti
ng with on will in
14
 their turn
current influence
insurance their
providers. behaviou
ral
intention
toward
continuin
g or
discontin
uing with
their
current
service
providers
.
8. A study Dr. Global  First  Life
of Shamsh Journals objectiv Insurers
3-A-Study-of-Custo
custome er Singh, Inc. e is to should
r
mer-Perception-towards-Service-Quality.pdf
Dr. (USA) find out carefully
percepti Naveen the focus
on J Sirohi factors upon the
towards & Ms. that factors
service Kumkum affect (Respon
quality Chaudha the siveness,
of Life ry; service Assuranc
Insuran BCIPS, quality e,
ce GGSIP of Life Convenie
compani Universit Insuran nce,
es in y, India ce Tangible
Delhi provide &
NCR rs. Empathy
region, It also ) which
studied the significan
effect of tly
demographic determin
factors on es the
customer customer
perception ’s
and service perceptio
delivery. n of
service
quality.
15
  The age
of
responde
nts
significan
tly
determin
es the
customer
perceptio
n of
service
quality of
life
insuranc
e
compani
es.
 The
other
demographi
c
characteristi
cs such as
gender,
education
and annual
income do
not have
significant
impact on
customer
perception
towards
service
quality of
life
insurance
providers.
9. The Dr. K. Internati  The  Analysis
service Anandhi; onal purpos of the
IJM_07_05_009-2.pd
f
quality School Journal e of the resultant
gap of of study is two
16
analysis Business Manage to factors
–A Studies, ment; explore revealed
study on Madurai Volume the that most
selected Kamaraj 7, level of of the
Life Universit Issue5, custom tangible’s
Insuran y, July 5 – er items
ce Madurai, August satisfac were
Compan Tamil 2016 tion regarded
ies in Nadu, with by
Madurai India service customer
. s s as least
provide important
d by the .
insuran  There is
ce a
compan perceive
ies d service
sector. quality
 Second gap in
objectiv the Life
e is to Insuranc
underst e
and the Compan
current y
nature industry.
and  It shows
opinion that the
about Life
the Insuranc
custom e
ers Compan
towards y staff
the was
service. aware of
the
expectati
ons of
customer
s. At the
same
time,
consume
rs and
17
 Life
Insuranc
e
Compan
y staff
have
their
expectati
ons
differentl
y.
10. Measuri Tripti Internati  The  The gap
ng the Ghosh onal first scores
9efcf29e082bbd605
custome
c5a9a05c58772a65000.pdf Sharma; Busines objectiv show
r Academ s e is to that there
perceive y of Researc investig is ample
d Business h; Vol. 3, ate room for
service and No. 3, service service
quality Engineer July quality quality
for life ing 2010 structur improve
insuranc Sciences e for life ment in
e – IT insuran life
services Group of ce and insuranc
– An Institutio then e
empirica ns relative industry
l importa in India.
investig nce of
ation. these
service
quality
dimensi
ons
from
custom
er’s
perspec
tive, so
as to
ensure
optimal
deploy
ment of
resourc
18
 e
among
these
dimensi
ons,
and
thereby
best
values
to the
custom
er.
 It also
aims to
measur
e how
well
service
s are
being
delivere
d i.e.,
up-to
what
level
perform
ances
are
meeting
the
expecta
tions.

19
4.Research Methodology:

A. Statement of the problem:

Through conducting survey by questionnaires, the data gathered
interprets certain aspects related to customer satisfaction. The
problems which are being identifies are as under:
 Kotak Mahindra Life Insurance Co. is not focusing upon its
customer relationship management. Thus, which is directly
responsible for its customer base.
 The company is not properly working on reliable and
responsiveness factor.
Both the factors are crucial in making positive customer base.

B. Objectives of the study:

The objective of this study includes:

 Comparative study of service quality of Insurance companies like

Kotak Mahindra Life Insurance, Aditya Birla Sun Life Insurance
and Max Life Insurance, on customer satisfaction.
C. Geographical scope:
The study is limited to the investigation of relationship of service
quality and customer satisfaction. The life insurance companies which
have been selected for collecting the responses customers include
Max Insurance Co. Ltd., Aditya Birla Sun Life Insurance Co. Ltd. and
Kotak Mahindra Life Insurance Co. Ltd. The geographical scope of
the study is restricted to Dehradun city.

D. Research Design:
o Population – Customers of life insurance in Dehradun city served
as the population for the study.
o Sample and Sampling Technique – A sample of 150 customers of
life insurance was selected for this study. Sampling units were
selected using sample random table.
o Data – Primary & Secondary data, both were utilized for the
purpose of this study. The primary data related to life

20
 insurance companies were collected from the customers of 3
life insurance companies located in Dehradun region. The
secondary data was obtained from journals, newspapers and
magazines.
o Research Hypothesis – Primary, there is no relationship
between customer perception and customer satisfaction in
life insurance services. Secondary, there is no relationship
between customer expectation and customer satisfaction in
life insurance services.
E. Data Collection Method:

Structured questionnaire based on service quality model (servqual) is

being used.
The main instrument used for data collection in this research was the
questionnaire. The responses have been collected through online
survey using – google forms.

21
5.Data Analysis & Interpretation:

The questionnaire is divided into three parts – demographic

background, experience with the life insurance industry and
satisfaction with service delivery in the life insurance industry. The
questionnaire items, as presented in this report, are adapted from
Parasuraman (1988) with some modifications to suit the area of
investigation and are measured on a five-point Likert scale, ranging
from 1(strongly disagree) to 5(strongly agree).

Demographic profile of the respondents

Variable Frequency Percentage
Gender Male 96 64
Female 54 36
Age (years old) <26 20 13.33
26-43 95 63.33
43-57 35 23.33
Monthly income Up to Rs. 20000 25 16.66
Rs. 21000-60000 80 53.33
Rs. 61000 & 45 30
above
Occupation Business 55 36.66
Service 45 30
Agriculture 25 16.66
Other 25 16.66

A. Experience with the life insurance industry:

Almost 42% of the respondents have a life insurance policy with

the Aditya Birla Sun Life Insurance Co. Ltd. 27.9% signed
insurance policies with Kotak Mahindra Life Insurance Co. Ltd.
While 30.2% hold a life insurance policy with Max Insurance Co.
Ltd.

22
 B. Customer satisfaction analysis:
Customer satisfaction is measured by using the Linkert scale which
was being used for scoring the dimensions of service quality of the
three selected life insurance companies.

SERVQUAL scores of the customers of;

(scoring from 1 to 5 as strongly disagree to strongly
agree)
Dimensions No. Max Aditya Kotak
of Insura Birla Mahindr
items nce Sun Life a
Tangibles 5  Latest equipment & 5 5 3
technology
 Physical infrastructure 4 4 2
 Attractive appearance 4 4 2
of employees
 Information about 3 5 3
products
 Clean service area 4 4 2
Reliability 5  Promised service at 4 5 3
promised time
 Understanding the 4 5 3
needs
 Good corporate image 5 5 4
 Personalized financial 4 4 2
planning structure
 Good tangibles quality 4 4 4
Responsiveness 6  Information related to 4 5 3
rendering of service
 Employees willing to 3 4 2
help
 Giving personal 3 5 2
attention
4 5 2

23
  Employees never too
busy 3 4 3
 Employees provide
prompt service 4 4 3
 Taking actions
immediately by the
employees
Assurance 5  Confidence building by 4 5 4
the employees
 Safety while dealing 4 4 3
with the company
 Courtesy of the 3 5 3
employee
 Knowledge of the 4 5 2
employee
 Knowledge about their 3 4 4
products
Empathy 4  Individual attention 4 5 3
 Understanding specific 3 5 2
needs of the customers
 Convenient operating 4 5 4
hours
 Company having best 4 4 3
interest at heart.

From the SERVQUAL score by using Likert scale for measuring the
service quality of the selected insurance companies, it can be
observed that Kotak Mahindra Co. is the company lagging behind
from other selected companies.
Based on the responses, it can be concluded that Aditya Birla Sun
Life is the leading player in this insurance sector and its service
quality is being highest ranked. Max Insurance is the second largest
player in the insurance industry. Kotak Mahindra, on the other hand,
is the least ranked among the three selected companies.
The reason for the Kotak Mahindra’s lower performance is due to
their lower service quality. The company should mainly focus on
Responsiveness & Reliability dimension of their service quality.

24
Tangible factor interpretation:
Q1. Q2.

Q3. Q4.

Q5.

25
Reliability factor interpretation:
Q6. Q7.

Q8. Q9.

Q10.

26
Responsiveness factor interpretation:
Q11. Q12.

Q13. Q14.

Q15. Q16.

Assurance factor interpretation

Q17. Q18.

27
 Q19. Q20.

Q21.

Empathy factor interpretation:

Q22. Q23.

28
Q24. Q25.

29
6. Conclusion:

This study was conducted to find out the impact of provided service
quality represented in its dimensions (Empathy, Assurance,
Responsiveness, Reliability & Tangible) on customer satisfaction.
The study found that there is a variation in the attitudes of the
sample individuals towards the dimensions of service quality.
Through the research, it can be concluded that:
o Kotak Mahindra is the least ranked insurance company from the
selected three companies.
o The responsiveness and reliability factor of Kotak Mahindra is
lagging behind from others.
o Aditya Birla is the leading one and Max Life is the second rivalry.
o An important conclusion of this study is that the impact of the
quality dimensions examined is similar to customer satisfaction,
so we advocate that managers pay similar attention to quality
factors.

Recommendations:

Based on our research in which a modified SERVQUAL model

was applied, it can be recommended that the model be modified
to the area where it is used.
Kotak Mahindra should build up strategies to improve more the
responsiveness and reliability factor in order to build up more
customer base and increase the goodwill of the company.
The main limitation of the study is the timeframe and the location
of data collection and consequently the generalizability and
applicability of the results.
Kotak Mahindra should be recruiting employees of a high level of
efficiency and being familiar with the procedures of obtaining the
required services by customers in order to inform the client about
how to get the required service, and to make sure that the
customer understands what is required from him.

30
 Annexure:
The questionnaire attached below is used for collecting data from the
customers of three selected insurance companies:

31
32
33
34
35
36
37
 Bibliography:

1) Marketing Management: Analysis, Planning and Control; Philip

Kotler.

2) Research Methodology – Methods & Techniques; C. R.

Kothari.

3) Dr. Shamsher Singh, Dr. Naveen J Sirohi & Ms. Kumkum

Chaudhary, BCIPS, GGSIP University, India; A study of
customer perception towards service quality of Life Insurance
companies in Delhi NCR Region; Volume 14 issue 7 version
1.0-year 2014, Global Journals Inc. (USA).

4) Dr. Masood H Siddiqui, Jaipuria Institute of Management;

Measuring the customer perceived service quality for Life
Insurance services: An empirical investigation; Vol. 3, No. 3;
July 2010, International business research.

5) Dr. Sunayna Khurana, Chandigarh Group of Colleges, Mohali;

Relationship between service quality and customer
satisfaction: An empirical study of Indian Life Insurance
industry; Journal of Research in Marketing, 01, 35-42.

6) Abu-salim, T, Onyia, OP, Harrison, T & Lindsay, V 2017,

'Effects of perceived cost, service quality, and
customer satisfaction on health insurance service continuance'
Journal of Financial Services Marketing, vol.
22, no. 4, pp. 173-186. DOI: 10.1057/s41264-017-0035-4.

7) Shubhada Mohan Kulkarni, KCES’s Institute of Management &

Research, Jalgaon; Service quality and customer satisfaction:
An empirical study of LIC’s policyholders in Jalgaon
District; Vision Research Journal Volume III, No I, ISSN 2250-
2025.

8) Dr. K. Anandhi, Madurai Kamaraj University, Tamil Nadu; The

service quality gap analysis – A study on selected Life

38
 Insurance companies in Madurai; International Journal of
Management, Vol. 7, Issue 5, July-Aug 2016, pp.106-115,
Article ID: IJM_07_05_009.

9) Agustina Hanafi, University of Sriwijaya, Indonesia; The level

of service quality and customer satisfaction of the insurance
industries in Indonesia; American Journal of Applied Sciences
2017, 14(4):462.468.

10) Kamal A.M. Al-Qudah, American University of Madaba; The

impact of service quality on customer satisfaction of Jordan
Insurance companies; International Journal of Management &
Information Technology. 5. 517-527. 10.24297/ijmit.v5i2.4442.

11) Norazah Mohd. Suki, School of International Business and

Finance Labuan, Universiti Malaysia Sabah; Customer
satisfaction with service delivery in the Life Insurance industry:
An empirical study; Jurnal Pengurusan 38(2013) 101 – 109.

12) Samarasinghe, Uj1 , Thushari, Cdn2 ,Weerakkodi P3 ,

Sandaruwan, Mka4 ,Rathnayake, Kpjpk5, Mathotaarachchi,
Kp6; Impact of service quality on customer satisfaction, with
reference to Life Insurance Services in Sri Lanka; IOSR
Journal of Business and Management (IOSR-JBM)
e-ISSN: 2278-487X, p-ISSN: 2319-7668 PP 55-62.

39