Relationship marketing, customer satisfaction and customer loyality in Insurance companies in Uganda.

Abstract

The insurance industry in Uganda, though steadily growing, has the least penetration rate (computed as the ratio of total life and non-life premium to GDP). According to UIC Annual report (2008), Uganda’s penetration rate stood at 0 .54% compared to South Africa (15.97%), Morocco (2.89%), Nigeria (.64%) and Kenya (2.47%). The fact that penetration rate is determined, among others, by the premium paid by clients; the number and loyalty status of clients maintained by any insurance company is key in realizing the value of premium desired. The study established the relationship between relationship marketing, customer satisfaction and customer loyalty in the insurance firms in Uganda The research mainly encompassed various insurance firms with operation in Kampala. The study mainly consisted of insurance firms which are legally registered under the Uganda Insurance Association and insurance firms with main / head offices within Kampala business area. The design comprised of descriptive and explanatory in which descriptive design helped in describing the relationship marketing strategies and the background information about the respondents A sample population of 109 respondents was selected from the insurance company. It shall be broken down to accommodate respondents from five insurance premiums selected for the study. The study specifically used two basic methods and these included questionnaires and interviews. They were used because respondents who were involved i.e. employees and employers were thought to be literature thus able to interpret and answer questionnaires and besides they were perceived to be unable to attend interviews due to their nature of work. After the data had been collected, the results were compiled, sorted, edited and classified and thereafter entered into the computer for analysis. The data was analyzed using Statistical Package for Social Science (SPSS). The study confirmed the connection between customer satisfaction and customer loyalty, the relationship between relationship marketing and customer satisfaction and relationship between relationship marketing and customer loyalty. It was concluded that, due to relationship marketing, customers have been satisfied with the insurance services provided to them. This has been greatly manifested by more clients asking about the insurance services; more repeat customers, limited complaint about services and increased stability. Therefore, both the company and the customers have enjoyed the benefits of relationship marketing since customers can easily get the required services and the company being able to maintain and retain its clients It was strongly recommended that in an environment of risky and sensitive information, insurance companies should communicate with customers directly and clearly. It would be very helpful if insurance companies let their marketing staff contact customers directly. The officers’ personal touch and relationships can make communication more intelligible.