The Effects of Customer Relationship Management on Customer Retention in the Insurance Industry in Ghana: The Mediating Role of Customer Satisfaction

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August, 2016
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Today, there is a fierce competition in the insurance industry in Ghana, and one of the key issues is the company‟s ability to practice effective Customer Relationship Management to achieve customer satisfaction in order to retain its existing customers and look for more. The subject of Customer Relationship Management, Customer Satisfaction and Customer Retention has become a global issue. The study sought to examine the effect of customer relationship management on customer retention, with customer satisfaction playing the mediation role. Questionnaire was the main data collection tool used to gather data from 450 customers of the fifteen Non-life selected Insurance Companies in Kumasi. The estimation tool used to test the study hypothesis was Structural Equation Model and STATA 12.0 software was used for analyses. Findings revealed that customer relationship management has a significant positive effect on customer retention. Also, there is a positive and significant correlation between customer satisfaction and customer retention. This shows that the more satisfied customers are the more likely they will stay or stick to a particular policy. Thus, the study result declares that, partial mediation is achieved. The study concluded that both customer relationship management and customer satisfaction are antecedents to customer retention. Customer relationship management is also a significant driver of customer satisfaction in the insurance industry.The study recommended that, the insurance practitioners should invest resources and capacity to intensify the management of customer relationships as this has been shown to impact on profitability. The researcher recommends there should be a further study on the effects of CRM on Customer retention in the life sector of the insurance industry. Another research can be conducted to assess the impact of CRM practises in the insurance industry in Ghana.
A Thesis Submitted to the Department of Marketing and Corporate Strategy, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements of the degree of Master of Philosophy in Business Administration (Marketing).