The Impact of Quality Customer Service Delivery on Customer Retention in Ghanaian Insurance Industry: A Case Study of SIC Life Insurance Company Limited-Kumasi

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The Insurance industry is beginning to assert itself in Ghana’s economy, but it is faced with the problem of quality service provision. There is the general perception that insurance companies especially life insurance providers are only interested in the money (that is premium ) that clients pay and are reluctant to fulfil their obligations when it comes to payment of claims. This negative perception has affected the image of the insurance industry. However, there has not been any scientific research to either confirm or reject this assertion. It is against this backdrop that this study assessed the impact of quality service delivery on customer retention of SicLife Insurance; to determine the extent to which Quality service delivery impact on the operations of SicLife. A survey was conducted using the servqual survey instrument on quality dimensions among customers and staff of Sic life. The study covered 150 customers and 30 members of staff of SicLife Insurance Company Ltd. Both primary and secondary data were used. Issues relating to turn-around time, Staff participation in decision making, management response to staff concerns, training needs for frontline staff, customers satisfaction and retention levels as well as why customers surrender their policies were investigated from the perspectives of the staff and customers SicLife. It was discovered that customers were satisfied with the services received from Sic life on four dimensions of quality but the levels vary. This according to the survey has led to the high customer retention of 99.7%.The study revealed a weak correlation between customers expectation and perception of service quality as depicted by the Paired Samples Correlation in the Hypothesis. The study also revealed that, SicLife is doing well on four dimensions of quality, except the reliability dimension. The quality gap in the reliability dimension is attributed to the frequent break in the network and technical software ‘Cebas’ as well as frequent power outages which causes delays leading to customers dissatisfaction. Non delivery of policy documents by some of the Sales representatives and issue on mis-representation of the policy terms and benefits given to customers by some of the Sales representatives were identified as a major problem which causes customers to surrender their policies. The study recommended that management of SicLife as a matter of urgency upgrade or improved its IT software or if possible find a much improved version of the ‘‘Cebas’’ software to avert the frequent breakdowns. It is further suggested that the technicians or the experts who management the software, should be decentralized to the branch for quick restoration of the system for smooth operation and service delivery.
A Thesis submitted to the Institute of Distance Learning, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the degree of Commonwealth Executive Masters in Business Administration, June, 2011