6

Effect of Relationship Management on Customer

Satisfaction: A study of some Selected Nigeria Insurance
Firms in FCT, Abuja

Osanaiye Juliana Idowu

Department of Business Administration,
Faculty of Administration,
Nasarawa State University, Keffi
Nigeria

Barnabas, E. Barde Ph.D

Department of Business Administration,
Faculty of Administration,
Nasarawa State University, Keffi
Nigeria

Abstract

D
espite several relationship management measures adopted by various insurance firms such as
shared values, communication and trust aimed at influencing consumer interests, they are still not
satisfied with the activities of the insurance firms. The study thus investigates the effect of
relationship management (RM) on customer satisfaction using survey research design and Kruskal-Wallis
(KW) statistical tool. Structured questionnaires were administered to the 276 customers to generate data
meant for the empirical analysis. Findings from the study revealed that trust has a significant effect on
customer satisfaction of insurance services. In addition, communication was found to have a significant
influence on customer satisfaction with insurance services. Lastly, shared value was found to have a
positive and significant effect on customer satisfaction of insurance services. Based on these findings, the
study recommends that insurance firms should enhance the process and procedures of communicating
directly with the customers which can foster RM and customer satisfaction. This would help sustain the
trust customers have with the services of insurance firms. In order to enhance customer satisfaction and
decreasing customer loss, the firm should focus on sustaining an effective communication that aim to seek,
gather, and store the right information; validated and share it through the entire organization levels; in
order to create unique experience and deliver quality services. There is a need for organizations, especially
insurance firms, to have a sustainable and effective shared value services with their customers, so as to
sustain their satisfaction with the firm’s services and obtain competitive advantage.

Keywords: Trust, Shared values, Communications, Customer satisfaction and CRM

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INTRODUCTION
Companies are facing their toughest competition ever; and to win customers and encourage them
to stay loyal or repurchase the service, most companies have resorted to meeting and satisfying
customer needs by not being only reactive but proactive. They are also interested in finding new
ways and means to satisfy the customer. Most companies are aiming for good customer
relationship which means better service to the customer thereby preventing the customer from
being promiscuous (Chen, & Popovich, 2013). A lot of companies are not just attracting customers
but are working at building long term relationships with customers (both local and foreign
customers), suppliers, employees, distributors and the general public. These companies are
striving to satisfy the maximized expectations of each stakeholder group. Based on the nature of
marketing, it involves voluntary “exchange” relationship where both sides must be willing
parties. The parties must be able to communicate which could be through different instruments.

In today‟s highly competitive environment, businesses need better understanding of their

customers. This understanding meets different channels of which one is customer relationship
management. CRM helps companies make sense of customer needs, manage these relationships
more intelligently and help predict the future (Dominici and Guzzo, 2010).

Consequently, customer relationship management (CRM) is a concept for managing a company‟s

interactions with customers, clients, and sales prospects through trust, shared values,
communications, empathy and bonding (Long,2013). Parvatiyar and Sheth (2012) sees CRM as a
comprehensive strategy that includes the process of acquiring certain customers, keeping them
and cooperating with them through bonding, empathy, shared values, communicating and trust
to create a distinguished value for both the company and the customer. The objectives of CRM
are to enhance income, customer satisfaction and profitability. To attain CRM, many
organizations use set of tools, technologies, and procedures to support the relationship with the
customer to enhance sales.

Customer satisfaction is a business philosophy which tends to the creation of value for
customers, anticipating and managing their expectations, and demonstrating ability and
responsibility to satisfy their needs, (Dominici and Guzzo, 2010). Qualities of service and
customer satisfaction are critical factors for the success of any business (Gronoos, 2015). As
Valdani (2009) points out: enterprises exist because they have a customer to serve. The key to
achieve sustainable advantage lies in delivering high quality service that results in satisfied
customers (Shemwell, 1998).

In recent times, insurance companies have had to device different relationship management
strategies due to the increased competition posed by the emergence and growth of new financial
institutions in Nigeria and the changing needs of customers. Others include: the changing
economic and business environment that followed the expansion of business, the high percentage
of money outside the banking system and the low level of public awareness. Effective
relationship management is thus becoming important in the insurance industry because if an
insurance company develops and sustains a long-term relationship with its customers, its
competitors cannot easily poach them. This therefore offers sustained competitive advantage
(Gruen et al., 2015).

Nigerian insurance firms are also re-strategizing to meet current customers‟ expectations and
where possible exceed such expectations through robust customer relationship management
(CRM) policies and program to remain in business. However, despite several relationship
management measures utilized by various insurance firms such as empathy, responsiveness,

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shared values, communication and trust aimed at influencing consumer interests, they are still
not satisfied with the activities of the insurance firms. This is a problem this research aims to
investigate and to find out why.

Most studies on relationship management and consumer satisfaction as Kolis & Jirinova (2013);
Vasiliu (2012); Feinberg and Kadam (2002); Wang and Lo (2004) dwelt only on manufacturing
industry and banking industries. This study seeks to fill this research gap identified in the
previous studies by paying attentions to how relationship management influences consumer
satisfaction in the insurance industry through shared values, communication and trust.
Hence, it is imperative for this study to investigate the effect of CRM on customer satisfaction in
Nigeria using some selected insurance firms in Abuja as a study.

Based on the above stated problem, the following questions were raised:
i. What effect does trust have on customer satisfaction with insurance services?
ii. What influence does communication have on customer satisfaction with insurance
services?
iii. How has shared values impacted on customer satisfaction with insurance services?
In line with the research questions, the following hypothesis were tested:
H01: Trust has no significant effect on customer satisfaction with insurance services
H02: Communication has no significant influence on customer satisfaction with insurance
services
H03: Shared values has no significant effect on customer satisfaction with insurance services

LITERATURE REVIEW
Conceptual Framework
Concept of Customer Relationship Management (CRM): As a logical result of the appearance of
the concept „‟Relationship Management‟‟ since the 1920s, the concept “Customer Relationship
Management” (CRM) has been brought to attention in late nineties, especially among the
academics and partitions (Chen & Popovich, 2013). The new concept has directed attention
towards various vital aspects, including the necessity of direct relationship between customers
and markets, the importance of keeping current customer, as well as the inevitability building
long-term relationships with customers instead of the customer-oriented transaction method in
order to augment the profitable of the institutions, especially in today‟s increasingly competitive
economy (Jayachandran & et. al, 2015). Therefore, the organization have directed their attention
to CRM by abundantly investing in the necessary infrastructure, with special concern on the
advancement of information technology. Some considered, therefore, that improving the
performance could be achieved through directing more attention to CRM (Malmi et. al, 2014).
Now, CRM is considered one of the most important targets in about 60% of the projects around
the world. Great advancement in technology helps to better divide market territories, therefore
enhancing communications with customers by providing an environment rich with information
so as to contribute in improving efficient strategies to deal with customers.

Parvatiyar and Sheth (2012) mentioned that CRM is a comprehensive strategy that includes the
process of acquiring certain customers, keeping them and cooperating with them to create a
distinguished value for both the company and the customer. As it shows, this definition regards
CRM as a strategy with a main goal of delivering a distinguished value to the customers through
improving the marketing productivity and satisfaction.

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On the other hand, Payne and Frow (2016) demonstrated that there are various points of view
related to the concept of CRM. Whereas, some points of view were in favor of regarding CRM as
correspondence in direct mail, a diagram for customer satisfaction and loyalty programs or
databases, other points of view regarded it as an assistant office work or a call center. Still, some
considered it data storage or taking care of data search and processing.

Finally, some considered it gaining the systems that make it able to perform e-commerce Payne
and Frow (2016) mentioned that the obvious lack of accepted and appropriate definition of CRM
may lead to the failure of the project of CRM, particularly if organizations adopt the limited point
of view, which is related to specific technology (the technological dimension). Therefore, the two
researchers tried to put a more comprehensive definition which pays attention to the strategy
point of view. Lindgrin (2015) defined CRM as a strategic method related to creating a
distinguished value for the contributors through improving good relationships with the main
customer‟s categories, as it (CRM) seeks to unify the strategies of marketing using relationships
and information technology to create profitable, long-term relations with customer and other
parties. This value is created through providing good chances to use data information to
understand customers and provide them with value. Consequently, this requires the integration
of customers, individuals and management abilities, which happens through information,
technology and applications.

Kumar & Reinartz (2016) agree with the above definition that CRM is merely a strategic process
by which the institution‟s more profitable customers are chosen, and interactions between this
institution and customers are determined, in order to achieve the goal of maximizing the present
and future values for customers. Unlike other researchers, Ramaseshan (2016) defined CRM from
the employment point of view as a process of reaching agreement with each customer or their
own, using all the available means to know the quantitative expected response of that customer
as a result of practicing marketing activities to the degree that maximize the general profitability
of the organization.

Brink (2016) defined CRM as a definite marketing activity by which the institution prepares its
customers to use its resources to produce and market a valuable product for them. CRM aims at
two goals: supporting the cause and improving the marketing performance. In an attempt to
summarize the most important concepts of CRM, Zablah (2014) demonstrated that there are five
proxies for CRM and they are trust, bonding, empathy, communication, responsiveness and
shared values.

Concept of Customer Satisfaction: Satisfaction is derived from the Latin satis (enough) and
facere (to do or make). Thus, satisfying products and services have the capacity to provide what
is being sought to the point of being enough. Two related words are satiation, which loosely
means enough up to the point of excess, and satiety, which can mean a surfeit or too much of
enough, as if to say that too much is necessarily undesirable. These terms illustrate the point that
satisfaction implies a filling or fulfillment (Masrujeh, 2009).

Customer satisfaction is a statement to the buyer about the appropriateness of the reward,
received in exchange for the service experienced. Every firm tries to fulfill customers‟ needs,
desires, wants, aims and expectations as customer are assumed to be the king. Therefore,
production and marketing department collaboratively produce economic utility for customers.
Customer satisfaction is generally understood as the pleasure of using product and service.
Customer satisfaction is the voice of customer that will differ from person to person. It is an
appraisal of how products and services of a company meet up or exceed customer anticipation

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which is achieved through research findings of the customers‟ needs and wants at affordable
price and at the door step of the customer.

Clearly, defining and understanding customer satisfaction can help any company identify
opportunities for product and service innovation and also serve as a basis for performance
appraisal and reward systems. It can also serve as the basis for a customer satisfaction surveying
program that can ensure that quality improvement efforts are properly focused on issues that are
most important to the customer (Li, 2012).

Jamal and Naser (2013) stated that if customers were satisfied with the services of the firm, they
are more likely to give more credit to this firm if compared to those firms they were not satisfied
with, hence less likely to engage in repeat purchases. Similarly, if the customers are satisfied with
the services of the firm, then they will be more willing to engage in repeat purchases and develop
their relationship with that firm. However, satisfying customers is not enough to retain them
because even satisfied customers defect at a high rate in many industries, therefore companies
must be ready to go extra mile to keep them. Customers Behavior is mainly shaped by their
needs and expectations. The desired outcome of expectations is getting what one anticipates from
a service encounter as a consumer. Needs focus on obtaining what one seeks from life as a
person, therefore the firm should understand that people strive to satisfy core needs in life at a
level more fundamental and compelling than meeting their expectations as consumers
(Schneider, 1999).

Kotler (2009), defined satisfaction as a person feeling of pleasure or disappointment resulting

from comparing a product perceived performance or outcome in relation to his or her
expectation. Tse(2016) described satisfaction as " the consumers response to and evaluation of the
perceived discrepancy between prior expectation (or some other norm of performance) and the
actual performance of the product as perceived after its consumption". This implies that if
services provided is better than what is expected, the customer is satisfied. However, if services
provided is worse than the customer expectation, the customer is unsatisfied. While Hunt
defined consumer satisfaction "as an evaluation rendered that the consumption experience was at
least as good as it was supposed to be." Westbrook and Reilly (1983) defined satisfaction as not
just a response but "an emotional response to the experiences provided by, associated with
particular products or services purchased, retail outlets, or even molar patterns of behavior such
as shopping and buyer behavior, as well as the overall marketplace."

Kumar (2016) defined consumer satisfaction as "the summary psychological state resulting when
the emotion surrounding disconfirmed expectations is coupled with the consumer's prior feelings
about the consumption experience".
Referring to the above definition, the concept of customer satisfaction is a pleasurable fulfillment
response, while dissatisfaction is an unpleasurable fulfillment response. The experience of some
parts of the component of the definitions allows the satisfaction evaluation to be directed at any
or all elements of the customer‟s experiences. This can include product, service, process and any
other component of the experiences.

The most common way of operational sizing satisfaction is to compare the customer‟s perception
of an experience, or some part of it with their expectation. This in known as, the expectation
disconfirmation model of customer satisfaction. Basically, the model suggests that if customers
perceive their expectation to be met, they are satisfied. If their expectation is underperformed,
this is negative disconfirmation and they will be dissatisfied. Positive disconfirmation occurs
when perception exceeds expectation. The customers may pleasantly be surprised or even

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delighted. This model of customer satisfaction assumes that customers have expectations, and
that they are able to judge performance.

Customer satisfaction is a state of mind that a customer has about a company when their
expectations have been met or exceeded over the lifetime of the product or service. The
achievement of customer satisfaction leads to company loyalty and product repurchase.
However, customers who are merely satisfied are only at the first stage and they can easily
switch to other companies. At most, customers range from being moderately satisfied to
moderately dissatisfied, which means that most customer are essentially ambivalent in their
loyalty to a particular business. These customers would likely defect in the presence of even a
modest motivator; such as getting a better price or finding a more convenient store location
(Masrujeh, 2009).

The company can make calls to her customers pretending to be another company. The company
will now try to convince the customer to switch. If the customer insists on not switching, then the
company will know that she is still winning the loyalty of the customer. The company needs to
launch various campaigns to have more communication with their customers and provide
services that reach their expectation which can upgrade the relationship to the next level and
reach customer loyalty which consequently lead to more business performance.

Kotler (2009) pointed out that it is important to measure customer's satisfaction regularly through
survey to determine customer's level of satisfaction. He said this is because firms may think that
they are getting a sense of customer satisfaction through customer's complaints. However, in
reality, 95 percent of dissatisfied customer's do not make any complaints, they just leave. As a
result, it is important for firms to make it easy for the customers to complain. About 54 to 70
percent of dissatisfied customers who usually complain will continue to do business again with
the organization, if their complaints are taken care of and resolved and may even be 95 percent if
the complaints receive quick response and action (Kotler, 2009).

Unfulfilling customers expectation may be reflected to customer's willingness to pay which lead
to insufficient revenue stream to cover the monthly expenses. Therefore, reaching customer's
satisfaction considered to be the corner stone of any implementation means of customer
acquisition and retention strategies.

The study thus utilizes the working definition of customer satisfaction given by Parvatiyar and
Sheth (2012) which can be interpreted as an overall evaluation of service quality attributes which
includes bonding, trust, communication, shared values and empathy.

EMPIRICAL STUDIES
Gilaninia (2011) studied the CRM application effect on customer satisfaction in financial and
credit institutions. They adopted the descriptive method of study – analytical and causal analysis
and statistical community is customers of financial and credit institutions in Iran (Guilan) and
measurement tools is questionnaires. Regression analysis was run and found that the elements of
CRM (quality of service, service features, and service availability and system complaints) have an
effect on customer satisfaction.

Using chi-square statistical techniques, Srinivasan and Moorman (2015) researched if the
investments in CRM influence customer satisfaction. The results of their research showed that if

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the firm was strategically committed to CRM, effects of the investment would prove to be
positive on customer satisfaction.

Minghetti (2013) in her study performed on the hospitality industry supports the fact that deep
knowledge of customers ‟needs, behavior, and preferences and its proper management
stimulates customer loyalty.

Sofi, Bhat, and Rather (2013) in their research using multiple regression method of analysis found
that improvements in CRM Technology can influence positively customer satisfaction in the
tourism industry. This study takes into consideration CRM only as technology and it failed at
recognizing other dimensions of CRM.

Lien (2010) examined the relationship between shared values, guest satisfaction and guest
behavioral intentions. The respondents were guests who stayed in hotels in Ho Chi Minh City,
Vietnam. First, the research proposed a model analyzing the effect of service quality factors in
hotel industry on perceived service quality. Results showed that shared values have a positive
effect on guest satisfaction and guest behavioral intentions.

Vasiliu (2012) in his research discussed customer relationship management strategies which
includes marketing, operations, sales, customer service, human resources, finance and
information technology and implementing CRM as strategic concept is a necessity as in recent
times our economy is “Customer centric” where the success of any company is based on
customer relationship, the authority provided by any company to the customer to decide and
also the personal experience of the customer with the company. Thus, Customer Relationship
Management (CRM) as a strategy aims to satisfy and build long term relationship with
clients/customers. He further found that through regular communications, customers were much
satisfied with their purchase and this strategy helps to generate sales by contributing good
service quality as expected by the customers.

Using regression analysis, Kaura, Datta and Vyas (2012) there exist at least three reasons why
customer relationship management can affect customer satisfaction; such as, CRM support firms
in customizing their offerings for each customer, by accumulating information from customer
interactions with the firm. Following, trust applications, firms customize their offers to match the
individual tastes of their customers. These trust applications improve the perceived quality of
products and services from a customer's perspective. Since perceived quality is a determinant of
customer satisfaction, it continues to point out that trust applications directly influence customer
satisfaction through their effect on perceived quality.

Empirical evidence of Palmatier (2009) revealed that RM enhances both customer trust and
commitment, which in turn influence customer behaviours, leading to superior seller
performance in both Business-to-Customer and Business-to-Business markets.
Croteau and Li‟s (2013) empirical study, in the context of manufacturing, transportation and
communication, retail, finance and insurance and service in Canada, supported a positive impact
of customer knowledge management (CKM) capability on customer satisfaction. This is based on
the rationale that CKM capability helps achieve a comprehensive view of the customers
internally and provides a unified face to all customers externally.

Further supporting evidence from Jayachandran (2015), in the context of both services and goods
firms in B-to-B and B-to-C markets in US, declared that CKM capabilities has a positive
association with customer satisfaction and customer retention. By integrating and sharing

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customer knowledge throughout the organizations, firms are more likely to provide
consumption-related fulfilment and quick and effective responses to customers‟ specific needs
and complaints.

Similarly, Campbell‟s (2013) empirical finding, in the financial services industry in Canadian,
showed that the gaps between customer requirements and the firm‟s offering can be closed, when
firms can effectively acquire customer knowledge, convert it into useful form and apply it.

Using logistic regression technique and survey research design, Yim (2014) empirical finding, in
the context of financial service company in Hong Kong, supported that customer knowledge
capability exhibits a significant and direct effect on customer satisfaction.

Sin (2015) empirical finding, in the context of service firms in Hong Kong‟s financial industry,
revealed that by interacting with customers in a satisfactory manner, firms can provide right
offerings to meet customers‟ changing needs and thus gain the increase in customer satisfaction.

THEORETICAL FRAMEWORK
Theory of Services
Services include intangible duties that satisfy the needs of consumers or commercial users. In
other words, services and products can be assumed on two ends of a continuum, as most cases
are a combination of these two features (Nasehifar & Haghbayan, 2009). Most authors have
pointed out five fundamental principles that distinguish service activities from non-service ones.
These five principles include: intangibility, instability, heterogeneity, inseparability and non-
possessiveness of the services (Mousavi & Rezaeian, 2007). Here, it needs to be pointed out that a
complaining customer is not an enemy to the organization. Those customers who complain about
specifications of a product or the services provided by the company are more likely to come back,
as compared to those customers who never express any complain about the organization. That is
to say an appropriate response to the complaining customers will make them 50% faithful to the
organization; otherwise, they will go to the rivals (John, 2006). Thus, complaints should be
addressed as opportunities to improve relationships with the customers. They should be used as
instruments for satisfying the changeable demands of the customers (Ranjbaran, 2012). The
studies show that only 10% of the personnel in the industrial sectors are directly in contact with
the customers. However, this increases to 90% or even 100% for the service-providers (Nasehifar
& Haghbayan, 2009).

Commitment-Trust Theory
The commitment-trust theory was advanced by Morgan and Hunt (1994). The theory asserts that
relationship marketing involves establishing, developing, and maintaining successful relational
exchanges. The foregoing constitutes a major paradigm shift from marketing theory and practice.
The authors conceptualized relationship management and its ten forms, which are: reliability,
tangibility, responsiveness, communication, access, courtesy, credibility, competence, security
and understanding of customers. The scholars theorized that successful relationship marketing
requires relationship commitment and trust. They modeled relationship marketing and trust as
crucial mediating variables. They tested this model and compared it with rivals that do not allow
relationship commitment and trust to function as mediating variables.

Commitment-trust theory is founded on political economy paradigm (Thorelli, 1986). It is stated

that power is the central concept in network analysis since its mere existence can condition
others. In tandem, it is argued that since about a third of strategic alliances are outright failures

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(Sherman, 1992), what ought to be central to understanding relationship marketing is whatever

that distinguishes productive, effective, relational exchanges from those that are unproductive
and ineffective. It is posited that though there are no doubt many contextual factors that
contribute to the success or failure of specific relationship management efforts, the presence of
relationship commitment and trust is theorized to be central to successful relationship
management, not power and its ability to condition others.
Commitment and trust are noted to be key because they encourage marketers to work at
preserving relationship investments by cooperating with exchange partners, resist attractive
short-term alternatives in favour of the expected long-term benefits of staying with existing
partners, and view potentially high-risk actions as being prudent because of the belief that their
partners will not act opportunistically. Therefore, when both commitment and trust, not just one
or the other, are present, they produce outcomes that promote efficiency, productivity, and
effectiveness. In other words, commitment and trust lead directly to cooperative behaviours that
are conducive to relationship marketing success (Morgan & Hunt, 1994).
This study however adopts the commitment-trust theory propounded by Morgan and Hunt
(1994). The choice for this theory is that it captures the aspect of relationship marketing which
involves establishing, developing, and maintaining successful relational exchanges between a
firm and a customer.

METHODOLOGICAL FRAMEWORK
Research Design: The design method adopted for this research takes the forms of survey study.
A survey research is one in which a group of people or item is studied by collecting and
analyzing data from only a few people or items (Samples) considered to be true representation of
the entire group. Survey research method was used because it deals mainly with opinions of
respondent (the opinion of respondent over a phenomenal) and also, because it is widely used in
the management and social science research due to the complex relationships that exist between
variable. This design style permits the collection of original data meant for describing large
population with individuals or unit of analysis.
Population and Sample: The population of this study is restricted to the customers who operate
with Law Union & Rock. Plc and Great Nigeria Ins. Plc located in the FCT, Abuja. The population
for the study is 896 customers of these insurance firms.
The study adopted convenient sampling technique. Convenience sampling is one in which the
researcher selects a sample consisting of only those sampling units which are conveniently
available. Mugenda and Mugenda (2003) advises that to use convenience sampling, one must
first decide on the criteria under which the population should fall.
Yamane (1967) sample size formula technique was used to estimate a sample of 276 customers
out of the population of 896 customers as shown below:
Thus, the sample size was estimated from the Yamane (1967) sample size formula given as:
N
n
1  Ne2

Margin error = 5%
Where;
N = population size
3 = is constant
e = is Margin of error (5%)
896
n
1  896(0.05) 2

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896
n
1  896(0.0025)
896
n
3.24
n = 276

Method of Data Collection: The data were collected through primary sources which involved
the use of questionnaires. According to Kothari (2006) the information obtained from
questionnaires is free from bias and researchers influence and thus accurate and valid data was
gathered. The questionnaire employed contained closed-ended structured questions in a five-
Likert scale format ranging from strongly agree to strongly disagree.
The preliminary analysis of this study shows that the research instrument is reliable for further
analysis as shown in Table 1.

Table 1: Result of Reliability Test

Variable Alpha

Customer satisfaction 0.8421

Trust 0.7012

Shared value 0.9854

Communication 0.8841

Test to scale 0.8451

Field Survey, 2018

In the case of this study, the levels of alpha are well above the 0.60 typically accepted level,
demonstrating a high level of internal consistency. As shown in Table 2 the alpha levels for the
different indicators averaged alpha coefficient of 0.8451 is greater than 0.60, fully supporting the
reliability of the constructs.
Method of Analysis: Before processing the responses, the completed questionnaires were sorted,
checked and edited for completeness and consistency. The data was then coded to enable the
responses to be grouped into various categories. The estimation was carried out using the
Kruskal-Wallis (KW) test statistic.
The KW test statistic is given by:
N 1 
2

g
12
K  ni  T i 
N ( N  1) i 1  2 

Where:
ni is the number of observations in group i; Tij is the rank (among all observations) of
observation j from group I; N is the total number of observations across all groups and
1
T  N  1 is the average of all the Tij .
2

RESULTS AND DISCUSSION

In line with the statistical research, the three hypotheses formulated in this study were
approached with the aid of KW test-statistics. The decision rule for accepting or rejecting the null
hypothesis for any of these tests will be based on the Probability Value (PV). If the PV is less than

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5% or 0.05 (that is PV < 0.05), it implies that the variable in question is statistically significant at
5% level; otherwise, it is not significant at that level.

Test of Hypotheses One:

H01: Trust has no significant effect on customer satisfaction with insurance services

Table 2: Kruskal Wallis Result on Trust and customer satisfaction with insurance services
Kruskal Wallis (KW)Test Statistic
Value Df Probability Value (PV)

Kruskal Wallis (KW)Test Value 7.114a 4 0.0004

Likelihood Ratio 4.465 4 0.0021
Linear-by-Linear Association 3.166 1 0.0000
N of Valid Cases 276
Source: Authors Computation (2018), SPSS, 24

From regression result in Table 2, the calculated Kruskal Wallis (KW)value for the effect of Trust
on customer satisfaction with insurance services is 7.11; with an associated p-value of 0.0004.
Since the p-value (of 0.004) is less than 0.05 used as the level of significance, we reject the null
hypothesis (H01) and conclude that trust has a significant effect on customer satisfaction with
insurance services
H02: Communication has no significant influence on customer satisfaction with insurance
services

Table 3: Kruskal Wallis Result on communication and customer satisfaction with insurance services
Kruskal Wallis (KW)Test Statistic
Value Df Probability Value (PV)

Kruskal Wallis (KW)Test Value 2.245a 4 0.2417

Likelihood Ratio 1.124 4 0.3159
Linear-by-Linear Association 1.193 1 0.2124
N of Valid Cases 276
Source: Authors Computation (2018), SPSS, 24

In the Kruskal Wallis result presented above, the Kruskal Wallis test value was found to be 2.245,
with an associated Probability Value of 0.2417. Since the Probability Value of 0.2417 is greater
than the alpha value of 0.05 (under 5% confidence level), we thus accept the second null
hypothesis and conclude that communication has no significant influence on customer
satisfaction with insurance services.

Test of Hypotheses Three:

H03: Shared values has no significant effect on customer satisfaction with insurance services

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Table 4: Kruskal Wallis Result on shared values and customer satisfaction of insurance services
Kruskal Wallis (KW)Test Statistic
Value Df Probability Value (PV)

Kruskal Wallis (KW)Test Value 5.359a 4 0.0011

Likelihood Ratio 4.114 4 0.0033
Linear-by-Linear Association 3.747 1 0.0047
N of Valid Cases 276
Source: Authors Computation (2018), SPSS, 24

Lastly, from the Kruskal Wallis result presented above, the Kruskal Wallis test value was found
to be 5.359, with an associated Probability Value of 0.012. The Probability Value of 0.0011 is less
than the alpha value of 0.05 (under 5% confidence level), we thus reject the third null hypothesis
and conclude that shared values has a significant effect on customer satisfaction of insurance
services

Discussion of findings
Findings from the study revealed that trust has a significant effect on customer satisfaction of
insurance services. The implication of the finding is that the greater the trust insurance providers
repose on their customers, the more loyal and satisfied they are to the insurance firm. This
finding is consistent with the findings of earlier studies which had positively correlated trust
with customer satisfaction in banks and retail industries (Lee& Chao, 2011).

In addition, communication was found to have a positive and significant influence on customer
satisfaction of insurance services. The implication of the findings from this study showed that
most customers complaints, queries, and suggestion are usually well circulated to the concerned
department at the right time and which do not take long delay during processing the complaints.
This is in agreement with the findings of Ndubuisi (2016) whose study showed that ineffective
communications about services provided by several financial firms to their customers have often
left them dissatisfied.

Lastly, shared value was found to have a positive and significant effect on customer satisfaction
of insurance services. As the relationships are considerably strengthened by the means of
common values, customers are considerably satisfied. Shared value has long been considered as
an important component in building buyer–seller relationships. This is in-line with findings of
Esposito, Kapoor and Goyal (2012) who found that when institutions want to focus on shared
value that involves creating economic value, it leads to intrinsic goal of value creation for society
with addressing its needs and challenges.

CONCLUSION AND RECOMMENDATIONS

Insurance firms should be viewed as a source to provide additional value-added services which
is developed based on customer needs and wants, and not only to consider CRM as customer‟s
record only. Since competition in the insurance industry is very tense, financial institution should
give greater importance to CRM as a tool to gain competitive advantage through customer
satisfaction.

It can thus be concluded that customer relationship management has a positive and significant
effect on customer satisfaction of insurance services.
Based on the findings, the following recommendations were made:

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Insurance management should enhance the process and procedures of solving customer
complaints and problems directly which can foster CRM and customer satisfaction. This would
help sustain the trust customers have with the services of insurance firms.

In order to enhance customer satisfaction and decrease loss of customers, insurance firms should
focus on adopting and implementing communication strategies that aim to seek, gather, and
store the right information, validate and share it through the entire organization levels; in order
to create unique experience and deliver high services quality, especially during post sales
services e.g. survey of insured properties and claims payment. The insurance firms are
encouraged to develop its organizational structure, in a way that ensure the full support from the
various technical and administrative departments to the customer service department so as to
ensure that the customers complaints, queries, and suggestion will be circulated to the concerned
department in the right time and no delay will take place during processing the complaints.

There is a need for organizations especially insurance firms to have a sustainable and effective
shared value services with their customers so as to sustain their satisfaction with the firm‟s
services and obtain competitive advantage by producing the right product at the right place, with
the right price (premium) and the right promotion.

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