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Presenter Name Tabbasum Layla 09-14113-2 Nazia Nabila 09-13478-1 Sharmin Nujhat 09-14598-2 G.C: Islam Md. Asif 09-14114-2 “PERCEPTIONS OF THE CUSTOMERS TOWARDS INSURANCE COMPANIES IN BANGLADESH-A STUDY BASED ON THE SURVQUAL MODEL” Financial Management Course Teacher: DR. Abdullah Ibneyy Shahid
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Perceptions of the customers towards insurance companies in bangladesh a study based on the survqual model

Aug 18, 2015

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Economy & Finance

Asif Islam
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Page 1: Perceptions of the customers towards insurance companies in bangladesh a study based on the survqual model

Presenter Name Tabbasum Layla 09-14113-2 Nazia Nabila 09-13478-1 Sharmin Nujhat 09-14598-2

G.C: Islam Md. Asif 09-14114-2

“PERCEPTIONS OF THE CUSTOMERS TOWARDS INSURANCE COMPANIES IN BANGLADESH-A STUDY BASED ON THE SURVQUAL MODEL”

Financial Management Course Teacher: DR. Abdullah Ibneyy Shahid

Page 2: Perceptions of the customers towards insurance companies in bangladesh a study based on the survqual model

Presentation covered with

Introduction

Objective of the article

Service Quality Gap Model

Results/ Findings

Conclusion and recommendations

Page 3: Perceptions of the customers towards insurance companies in bangladesh a study based on the survqual model

Introduction

Insurance:Insurance is defined as the equitable Insurance is defined as the equitable transfer of the risk of a loss, from one transfer of the risk of a loss, from one entity to another, in exchange for a entity to another, in exchange for a premium,premium,

An insurer is a company selling the An insurer is a company selling the insurance; an insured is the person or insurance; an insured is the person or entity buying the insuranceentity buying the insurance

Page 4: Perceptions of the customers towards insurance companies in bangladesh a study based on the survqual model

Objective of the article:

This study addresses clients’ behaviors and attitude regarding insurance companies in public and private sectors in Bangladesh.

To do this study they use “SERVQUAL and Model of Service Quality Gaps”- through this model weakness area of delivering quality service can be identifiable

Page 5: Perceptions of the customers towards insurance companies in bangladesh a study based on the survqual model

Service Quality Gap Model

The Wrong Service- Quality StandardsThe Wrong Service- Quality Standards

Not Knowing What Customers ExpectNot Knowing What Customers Expect

When Promises Do Not Match DeliveryWhen Promises Do Not Match Delivery

The Service- Performance GapThe Service- Performance Gap

The discrepancy between customer expectations and their perceptions of the service delivered

The discrepancy between customer expectations and their perceptions of the service delivered

The discrepancy between customer expectations and employees’ perceptions

The discrepancy between customer expectations and employees’ perceptions

The discrepancy between employee’s perceptions and management perceptions

The discrepancy between employee’s perceptions and management perceptions

Gap 2Gap 2

Gap 3Gap 3

Gap 4Gap 4

Gap5Gap5

Gap6Gap6

Gap7Gap7

Gap 1Gap 1

Page 6: Perceptions of the customers towards insurance companies in bangladesh a study based on the survqual model

Gap 1:Not Knowing What Customers Expect

the lack of a marketing research orientation

inadequate upward communication

too many layers of management.

Customers’ expectations versus management perceptions are the result of

Page 7: Perceptions of the customers towards insurance companies in bangladesh a study based on the survqual model

Gap 2: The Wrong Service- Quality Standards

management is aware of customers’ expectations but may not be willing or able to put systems in place that meet those expectations.

Discrepancy between what managers perceive that customers expect and the actual standards that the managers set for service delivery.

Page 8: Perceptions of the customers towards insurance companies in bangladesh a study based on the survqual model

Gap 3:The Service- Performance Gap

Gap 3 is the difference between organizational service specifications and actual levels of service delivery.

Service specifications versus service delivery is the result of

Role ambiguity and conflict, Poor employee- job fit Poor technology- job fit Inappropriate supervisory control systems Lack of perceived control and lack of teamwork.

Page 9: Perceptions of the customers towards insurance companies in bangladesh a study based on the survqual model

Gap 4: When Promises Do Not Match Delivery

The gap appears between promised levels of service and the service that is actually delivered.

Service delivery versus external communication may occur as a result of

inadequate horizontal communications propensity to over- promise.

Page 10: Perceptions of the customers towards insurance companies in bangladesh a study based on the survqual model

Gap 5:The discrepancy between customer expectations and their perceptions of the service delivered

the influences exerted from the customer side and the gaps on the part of the service provider.

Customer expectations are influenced by the extent of personal needs, word of mouth recommendation past service experiences.

Page 11: Perceptions of the customers towards insurance companies in bangladesh a study based on the survqual model

Gap 6:The discrepancy between customer expectations and employees’ perceptions

as a result of the differences in the understanding of customer expectations by front- line service providers.

The differences in the understanding of customer expectations between managers and service providers.

Gap 7:The discrepancy between employee’s perceptions and management perceptions

Page 12: Perceptions of the customers towards insurance companies in bangladesh a study based on the survqual model

Results/ Findings

Survey did on 500samples.

40.4% (168 out of 416) of the respondents prefer private but foreign insurance companies where as private but local insurance companies are least preferred (27.4%) by the respondents. 32.2% respondents like government owned insurance companies

People like foreign companies because of experience and reputation

Page 13: Perceptions of the customers towards insurance companies in bangladesh a study based on the survqual model

Table- 1: Frequency of the preference of insurance companies by the clients

Types of insurance company

Frequency Percentage

Government

Private but local Private but foreign

134

114

168

32.2

27.4

40.4

Page 14: Perceptions of the customers towards insurance companies in bangladesh a study based on the survqual model

Table- 2: Frequency of the preference of insurance policies by the clients

Types of insurance policy

Frequency( Yes)

Frequency( No)

% (Yes)

%(No)

Life insurance

Vehicle insurance Property insurance Insurance for kids Business insurance

291

63

54

99

65

125

353

362

317

351

70.0

15.1

13.0

23.8

15.6

30.0

84.9

87.0

76.2

84.4

N. B: For any client a combination of six factors generally influences the insurance policy

Page 15: Perceptions of the customers towards insurance companies in bangladesh a study based on the survqual model

Table- 3: Factors influencing in choosing an insurance company

Reasons of choice Frequency Percentage

Reference by family/ friends Regulation of the government

Reputation/ reliability Low service/ processing cost

Influence of the sales people

No other options

High return on investment

Reference by workplace

Political and legal situations Miscellaneous

206

87

249

50

102

12

112

56

30

14

49.5

20.9

59.9

12.0

24.5

2.9

26.9

13.5

7.2

3.4

N. B: For any client a combination of ten factors generally influences the choice of an insurance company

Page 16: Perceptions of the customers towards insurance companies in bangladesh a study based on the survqual model

Table- 4: Frequency of the source of information regarding insurance companies

Source of information Frequency Percentage

Advertisement

Sales people

Family/ friends/ relatives

127

125

164

30.5

30.0

39.4

Page 17: Perceptions of the customers towards insurance companies in bangladesh a study based on the survqual model

Table- 5: Association between gender and type of insurance company

Insurance company Gender

Male Female Total

Public

Private but local

Private but foreign

Total

85

82

129

296

49

32

39

120

134

114

164

416

Page 18: Perceptions of the customers towards insurance companies in bangladesh a study based on the survqual model

Table- 8: Reasons of non- popularity of the insurance companies.

Reasons of non popularity Frequency Percentage

1.Lack of trustworthiness

2. Low income of the people

3. Unattractive offerings

4. Lack of information about the insurance companies

5. Less interest earnings

6. Inefficiency in problem solving

7. High service/ processing cost

8. Less convincing sales people

9. Lengthy process to get payment after incidents

10. Lack of marketing research

11. Lack of quality controlling process

299

179

141

178

60

67

53

89

254

94

52

71.9

43.0

33.9

42.8

14.4

16.1

12.7

21.4

62.0

22.6

12.5

Page 19: Perceptions of the customers towards insurance companies in bangladesh a study based on the survqual model

Conclusion and recommendations

People of Bangladesh chose insurance companies depend on trustworthiness. But between the private local and foreign insurance company choice, clients are mostly considering foreign private insurance companies due to its trustworthiness, experience in operation and wide area coverage.

Less number of branches of the public insurance companies may be another prime reason of not being preferred by the local clients.

Insurance companies have some lacking in marketing policy though they invest more on sales representative.