THE EFFECT OF MOTOR INSURANCE CLAIM MANAGEMENT ON CUSTOMER SATISFACTION AT ETHIOPIAN INSURANCE CORPORATION

Abstract

The objective of this research was to examine the effect of motor insurance claims management process on customer satisfaction at EIC. The research identified five elements of the motor insurance claim management process at EIC, which are ‘claim reporting’, ‘response to a claim’, ‘towing damaged vehicle’ ‘damage assessment’ and ‘repair handling’. The motor insurance claim management included a sixth process ‘complaint or dispute settlement’ for those raising any. Taking a sample of 102 customers selected using a convenience sampling technique from EIC customers; the research examined the relationship between the elements of the claim management process and customer satisfaction. The results indicated that there is a statistically significant correlation between customer satisfaction and motor insurance claim management processes presented in their order of Pearson correlation coefficient (repair handling (0.783), damage assessment (0.745), complaint settlement (0.705), damaged vehicle towing (0.632), claim reporting (0.540), and response to a claim (0.205) with p< 0.05 or more). The regression model also confirmed that the model was significant with F ((6,95) = 38.914, p < 0.001), with an R2 of 0.843. The model also identified ‘repair handling’ with coefficient 0.341, ‘damage assessment’ with coefficient 0.270 as strong predictors of customer satisfaction at p<0.01 followed by ‘complaint and dispute settlement’ with coefficient 0.156 at p< 0.05. This implies that improving motor insurance claim management process could improve the overall customer satisfaction, which can also translate into policy renewals and further recommendation to others increasing the word of mouth advertising. Prioritizing and improving elements of the motor insurance claim management process specifically ‘repair handling’ and ‘damage assessment’ followed by ‘complaint and dispute settlement’ should result in higher level of customer satisfaction quickly.