Antecedents of Loyalty in the Insurance Industry of Ethiopia (A Special Emphasis on Private Insurance Companies)

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Addis Ababa University


It is essential for insurance companies to understand the critical factors that influence customer loyalty in order to be successful in this competitive marketing environment. The general objective of the study is to investigate the determinants of customer loyalty in the private insurance industry of Ethiopia. More specifically, the study tries to see the relationship of factors such as perceived service quality, perceived price, perceived value and trust with customer loyalty. Primary data was obtained through structured questionnaire from customers of three insurance companies namely Awash, Africa and Nib. A multi stage non probability sampling technique was used to sample insurance companies, branches of insurance companies and customers. Purposive sampling technique was used to sample insurance companies and branches whereas convenience sampling was used to sample customers. 150 questionnaires were distributed by the researcher to the insurance policy holders and 136 of the questionnaires were returned, properly filled. The questionnaires were analyzed using SPSS version 21. Pearson Correlation and multiple regressions were used to establish the relationship between the independent and dependent constructs of the research. The findings revealed that all the independent variables (i.e. service quality, price perception, perceived value and trust) are statistically important determinants of customer loyalty in the private insurance industry of Ethiopia. A conclusion was drawn to the effect that since factors influencing customer loyalty have been established, private insurance companies should note these and emphasize them in their marketing strategy



customer loyalty, Service quality, price perception