Investigating the Challenges of Customer Retention by Ethiopian Insurance Corporation, Ethiopia
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Date
2021-07
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A.A.U
Abstract
The Ethiopian Insurance Corporation plays a crucial role in Ethiopian Insurance Industry by contributing more in the economy of the country. As the financial institution and service sector the activities of Ethiopian Insurance Corporation mainly depend on customers. By delivering quality service customer retention has become the issue of success for the insurance industry. This research has considered critical literature reviews of studies which were done with related to customer retention with the objective of examining customer retention factors and the impact on customer retention. And this study used a quantitative research approach with purposive sampling technique to select target respondents that is the managerial members of the Ethiopian insurance Corporation those directly involved customer handling. Primary data source (questionnaire) was used with a total sample size of 112 respondents. For this study the dependent variable is customer retention whereas the independent variables are; customer satisfaction, customer trust, employees‟ commitment, service recovery and service quality. And the questionnaire data which was collected by using likert scale was analyzed by using descriptive and inferential statistics (ANOVA, correlation and multiple linear regression models). ANOVA was used to test the relationship between factors of customer retention and customer retention Ethiopian Insurance Corporation and the result showed that there customer satisfaction, customer trust, employees‟ commitment, service recovery, and service quality and dependent customer retention. And based on the regression analysis, there is significant relationship between the identified customer retention factors: customer satisfaction, customer trust, employees‟ commitment, service recovery, and service quality and dependent customer retention. And there is significant impact between these five explanatory variables (customer satisfaction, customer trust, Employees commitment, service recovery, and service quality) and customer retention in Ethiopian Insurance Corporation. Thus to satisfy and to retain existing customers Ethiopian Insurance Corporation should improve service quality, employees commitment, service recovery system. Lack of competent employees and gaps in awareness creation for the insurance service to the customers in easy and understandable manner are the causes for poor service quality. Therefore, to achieve the objectives and goals the corporation should give appropriate solutions for the identified problems to overcome customer dissatisfaction so as retain them.
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Customer satisfaction, customer trust,, employees‟ commitment and customer retention, Quality of Service, Service recovery