Does loyalty and satisfaction support customer retention in life insurance sector - An empirical study

Abstract

Life insurance is a contract between a policyholder and an insurance firm. This study aims to assess the attributes for customer retention and to determine the factors affecting customer satisfaction and loyalty. Four items for customer satisfaction, five items for customer loyalty and three items for customer retention are used for the measurement of the retention potential of life insurance policy holders. The data was collected from respondents residing in sub urban locations in Tamilnadu holding life insurance policies issued by top five life insurance service providers in India. The total size of the sample was 462 and data were analysed using the SmartPLS 3 for measuring reliability and validity of data. The results indicate high expectations of policyholders in terms of service. The results of the quantitative assessment of customer retention offer insights on how customers rate the service and their extent of satisfaction of the insurance firm. Satisfied customers maintain continuous business with the particular firm and also encouraged their friends and family members to buy insurance policies from a specific insurance company. Insurance firms retain the existing customers through the delivery of quality service that the customer expects of them.