Key Determinants of Life Insurance Customer Satisfaction in Emerging Markets

Abstract

Purpose: This study examines the determinants of customer satisfaction with life insurance services in Sri Lanka, a nation with an emerging middle-class population and increased competition among insurance firms. With an appreciation that customer satisfaction leads to policy renewal and long-term profitability, the purpose of this study was to identify whether customer awareness, type of policy, insurance firm reputation, and claim settlement have an effect on the satisfaction level of policyholders throughout the country.

Design/methodology/approach:  A systematic, quantitative approach was employed to collect and analyse the data from three hundred and eighty-five life insurance policy holders across Sri Lanka using the proportionately stratified sampling technique to ensure representation from each of Sri Lanka's nine provinces. Descriptive statistics, correlation and stepwise multiple regression analyses were used the find out the level, relationship, and collective impact of the variables.

Findings: The results showed that all the independent variables had a statistically significant correlation with customer satisfaction. Step wise multiple regression analysis revealed that the proposed determinants collectively explained a substantial portion of the variance in customer satisfaction (R² = 0.921, p <0.001) in the life insurance sector in Sri Lanka.

Originality:  The study addresses the limited empirical evidence on the combined influence of customer awareness, type of policy, insurance company reputation, and claim settlement on customer satisfaction among life insurance policyholders in Sri Lanka.

Implications:   The results underscore the fact that increasing customer awareness, offering appropriate policy types, maintaining a good company reputation, and streamlining claims settlement processes are the main steps for increasing customer satisfaction in Sri Lankan life insurance. While the research has compelling evidence of such associations, its restrictions as being cross-sectional and self-reported caution in generalizing over time and across places. Overall, this study offers practical advice for insurers that seek to have long-term, trust-based relationships with policyholders in Sri Lanka's evolving insurance marketplace.