The Effect Of Service Quality On Customer Satisfaction In Selected Insurance Companies In Addis Ababa

The liberalization of the economic system in Ethiopia enabled the emergence of private insurance companies and have created competitive environment in the insurance industry. This study focused to examine the effect of service quality on customer satisfaction in selected insurance companies in Addis Ababa by applying SERVEQUAL model comprising five dimensions: Tangibility, reliability, responsiveness, assurance and empathy. The data collected from 141 questionnaires were analyzed using gap score, statistical tools such as mean, correlation and multiple regression analysis. The gap score between perception and expectation of customers of the insurance companies showed that there is a negative gap score in all service quality dimensions meaning those customers‟ expectations exceeds their perception. The study also indicated that the five service quality dimensions have positive and significant relationship with customer satisfaction. The study showed that the selected insurance companies in Addis Ababa were not providing the level of service quality demanded by customers. The findings suggested that the insurance companies need to improve all the dimensions of service quality. Keywords: SERVQUAL, Tangibility, Reliability, Responsiveness, Assurance, Empathy and customer satisfaction.

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