The objective of this study is to investigate the influence of internal marketing on externalrnservice quality in Nyala Insurance Company (NISCO).rnEventhough the growing importance of people in service sectors are supported in mainrnliteratures there are still problems where traditional approaches of managing business that dullyrnfocus on external customers’ satisfaction is still a believes of many firms.rnThe population of interest in this study was professional frontline staffs of NISCO. One hundredrnsixteen questionnaires were distributed and 108 questionnaires were returned, yielding arnresponse rate of 93.1%. The regression analysis shows that Internal communication, Employees’rntraining, and Empowerment are significant to explain the variation in external service quality.rnThe findings reveal that there is significant influecne of internal marketing dimention: Internalrncommunication, Training, and empowerment; on external service quality except for onerndimention only i.e. reward/performance incentive which has insignificant influence. It isrnrecommended that there is need for NISCO to sensitized of their role in spearheading internalrnmarketing initiatives, for a more proactive approach and for effective implementation of internalrnmarketing strategies. The study will be of value to future scholars by stimulating furtherrnresearch to develop a better understanding of internal marketing best practices applied inrnEthiopian insurance industry