Effects and Prospects of Customer Handling in the Insurance Industry in Ethiopia (A Case Study at Nile Insurance Share Company)

Abstract

The main aim of this thesis was to assess the effects and prospects of customer handling in the insurance industry in Ethiopia with a particular reference at Nile Insurance Company S.C as a case study. It tries to identify the level of customer satisfaction by measuring customers’ perception with regard to quality service delivered by the insurance using the five service quality dimensions which are Tangibles, Reliability, Responsiveness, Assurance and Empathy plus three additional variables, i.e. Underwriting, Claims Service and Complaint Handling. The study is basically a survey that used both quantitative and qualitative approaches. For the purpose of data collection SERVQUAL model questionnaire was adopted, pre-tested and personally administered to the targeted population by following the appropriate ethical procedure. In total 100 respondents were sampled from the total population of 15,936 customers of Nile Insurance S.C that are found in Addis Ababa City branches, using the sample size determination table developed by Yamane, 1967. Out of the distributed 100 questionnaires, 94 were returned constituting 94% response rate. More over ten frontline customer service employees from the ten selected branches, one from each, and four managers from both the head office and branches were also sampled. Out of the distributed questionnaires to front line employees and interviews conducted with managers, all were returned, which constituted 100%. The findings of this study showed that customers of Nile Insurance S.C in Addis Ababa branches were moderately satisfied in the service quality dimensions which showed expectations of customers’ perception exceed the actual performance of the insurer. Therefore, it is recommended that Nile Insurance Company S.C should give greater attention to improve its customer handling service quality and satisfy its customers by meeting or exceeding customers’ expectation through assessing and improving the gaps on all the service quality dimensions which will result in reputation of purchase, positive word of mouth, and customer loyalty that can help the company to stay competitive in the insurance industry and increase its market share, profit and its financial position