Evaluating customer satisfaction with motor vehicle insurance services in hung vuong assurance corporation

RESEARCH PROJECT BMBR5103 EVALUATING CUSTOMER SATISFACTION WITH MOTOR VEHICLE INSURANCE SERVICES IN HUNG VUONG ASSURANCE CORPORATION STUDENT’S FULL NAME : DOAN THI NGUYET STUDENT ID : CGS00018501 INTAKE : SEPTEMBER, 2014 ADVISOR’S NAME & TITLE : ASSOC.PROF.DR PHAN DINH NGUYEN December, 2015 Advisor’s assessment Advisor’s signature Declaration I hereby declare that this submission is my own work towards the MBA and that, to the best of my knowledge, it contains no material previously published by another person nor material which has been accepted for the award of any other degree of the University, except where due acknowledgment has been made in the text ABSTRACT This is a descriptive study that assessed the expectations of customers of their insurers and the level of satisfaction that their insurers have been able to provide them The general objective of the study was to examine customer satisfaction levels among clients’ of insurance companies and the strategies companies have in place to achieve customer satisfaction The specific objectives of the study include the examination of customer expectation, assessment of customer satisfaction levels, assessment of service quality impact on satisfaction, evaluation of insurance companies’ customer satisfaction strategies and identification of challenges confronting insurance companies in their bid to satisfy their customers The study showed that customers’ expectations have not been adequately met Customers expect a high level of service delivery from insurance companies The challenges of internal bottlenecks and inadequate resources have been identified by insurance companies as accounting for their inability to deliver the kind of service that will satisfy their customers Recommendation offered by the study is that insurance companies should aim at building durable teams Various units and departments of the organizations should work as a team with a focus to satisfy customers Companies should automate their processes to shorten the time that clients spend trying to purchase insurance or make claims ACKNOWLEDGEMENTS At the first of my thesis, I would like to thank all those people who made this thesis possible and an unforgettable experience for my studying Foremost, I would like to express my sincere gratitude to my supervisor, Dr Nguyen Phan, for the continuous support of my study, for her patience, motivation, enthusiasm, and immense knowledge Her guidance helped me in all the time of research and writing of this thesis Besides my supervisor, I would like to thank Hung Vuong Assurance Corporation for their encouragement, and their insightful comments Moreover, I also wish to acknowledge customers and respondents in who filled out the questionnaire of this study These findings made the research completely and reliable Last but not the least; I also wish thank all those people who spent through their time and generous support made this thesis project a dream come true Grateful thanks to them who have encouraged me, not only within this dissertation but my entire academic life as well Contents ABBREVIATION LIST OF FIGURES 10 LIST OF TABLES 11 CHAPTER ONE 12 INTRODUCTION 12 1.1 Background of the study 12 1.2 Research Objectives 13 1.2.1 General Objective 13 1.2.2 Specific Objectives 14 1.3 Research questions 14 1.4 Scope of the study 14 1.5 Implications of the study 15 LITERATURE REVIEW 16 2.1 Overview of the Insurance Industry in Vietnam 16 2.2 Definition of relevant concepts 18 2.2.1 Customer 18 2.2.2 Insurance 18 2.2.3 Customer expectations 19 2.3 Assessment of Customer Satisfaction Levels 19 2.4 Customer satisfaction and service quality 20 2.4.1 Definition of Customer Satisfaction 22 2.4.2 Definition of Service Quality 22 2.4.3 Relationship between service quality and customer satisfaction 24 2.5 Service Quality Models 25 2.6 Customer satisfaction challenges 28 2.7 Conceptual framework 30 2.8 Elements of the service quality 31 2.8.1 Tangibles 32 2.8.2 Service reliability 32 2.8.3 Responsiveness 32 2.8.4 Assurance 32 2.8.5 Empathy 33 CHAPTER THREE 34 RESEARCH METHODOLOGY 34 3.1 The Study Area 34 3.2 Overview about Insurance 36 3.3 Research process 39 3.4 Research model and hypotheses 41 3.5 Data sources 42 3.5.1 Questionnaire Design 42 3.5.2 Sampling Method 43 3.5.3 Sample and Sample Size 43 3.6 Research Method 44 3.7 Data Processing and Analysis 45 CHAPTER FOUR 46 DATA ANALYSIS AND RESULTS 46 4.1 Sample Demographic 46 4.2 Reliability Analysis 48 4.3 Exploratory Factor Analysis 50 4.4 Descriptive Analysis 57 4.4.1 Tangibles 57 4.4.2 Reliability 57 4.4.3 Responsiveness 58 4.4.4 Assurance 59 4.4.5 Empathy 60 4.5 Correlation Analysis 60 4.6 Multiple Regression Analysis 62 CHAPTER V 66 CONCLUSION AND RECOMMENDATIONS 66 5.1 Main Findings 66 5.2 Recommendations 67 5.2.1 Improve satisfaction through reliability of service provider 67 5.2.2 Improve satisfaction through Responsiveness of service provider 68 5.2.3 Improve satisfaction through Assurance of service provider 69 5.2.4 Improve satisfaction through Tangibles of service provider 70 5.2.5 Improve satisfaction through Empathy of service provider 70 5.3 Limitations and Further Research 70 APPENDICES 74 APPENDIX 1: QUESTIONNAIRE 74 APPENDIX 2: RELIABILITY ANALYSIS 78 ABBREVIATION HCMC Ho Chi Minh City BHV Hung Vuong Assurance Corporation TAN Tangibles REL Reliability RES Responsiveness ASS Assurance EMP Empathy GEN The general satisfaction with service MOF Ministry of Finance LIST OF FIGURES Figure 1: Model of e-service quality (Santos, 2003) 26 Figure - Model of perceived quality and satisfaction (Spreng and Mackoy, 1996)27 Figure - Determinants of Service quality perceived by customer (Parasuraman et al., 1990) 28 Figure : The relationship between service quality and customer satisfaction 31 Figure 5: BHV’s operating structure 35 Figure : Research process in flow chart 39 Figure : Research model 41 10 Component Transformation Matrix Component 510 463 468 412 369 -.257 -.295 -.217 100 889 -.693 465 -.074 532 -.124 -.063 -.690 437 536 -.201 435 -.076 -.733 500 -.135 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization TANGIBLES Case Processing Summary N Valid Cases % 261 100.0 0 261 100.0 a Excluded Total a Listwise deletion based on all variables in the procedure Reliability Statistics Cronbach's Cronbach's Alpha Alpha Based on N of Items Standardized Items 742 755 Item Statistics Mean Std Deviation N TAN1 4.46 1.429 261 TAN2 4.72 1.314 261 TAN3 4.90 1.013 261 TAN4 4.80 1.066 261 84 Summary Item Statistics Mean Minimum Maximum Range Maximum / Variance Minimum N of Items Item Means 4.721 4.460 4.904 444 1.100 036 Item Variances 1.482 1.025 2.042 1.016 1.991 233 620 554 702 148 1.268 003 Inter-Item Covariances Item-Total Statistics Scale Mean if Scale Variance Corrected Item- Squared Cronbach's Item Deleted if Item Deleted Total Multiple Alpha if Item Correlation Correlation Deleted TAN1 14.43 7.422 501 258 714 TAN2 14.16 7.807 522 283 692 TAN3 13.98 8.903 568 342 674 TAN4 14.08 8.524 595 365 657 Scale Statistics Mean Variance 18.89 Std Deviation 13.364 N of Items 3.656 RELIABILITY Case Processing Summary N Valid Cases a Excluded Total % 261 100.0 0 261 100.0 a Listwise deletion based on all variables in the procedure 85 Reliability Statistics Cronbach's Cronbach's N of Items Alpha Alpha Based on Standardized Items 858 859 Item Statistics Mean Std Deviation N REL1 4.95 1.136 261 REL2 5.22 1.108 261 REL3 5.15 1.080 261 REL4 5.18 1.103 261 REL5 4.91 1.022 261 Summary Item Statistics Mean Minimum Maximum Range Maximum / Variance Minimum N of Items Item Means 5.083 4.908 5.222 314 1.064 020 Item Variances 1.189 1.045 1.290 245 1.234 008 651 592 691 098 1.166 001 Inter-Item Covariances Item-Total Statistics Scale Mean if Scale Variance Corrected Item- Squared Cronbach's Item Deleted if Item Deleted Total Multiple Alpha if Item Correlation Correlation Deleted REL1 20.46 12.495 645 416 836 REL2 20.19 12.417 682 465 827 REL3 20.26 12.626 674 474 829 REL4 20.23 12.626 653 436 834 REL5 20.51 12.682 720 528 818 86 Scale Statistics Mean Variance 25.41 Std Deviation 18.967 N of Items 4.355 RESPONSIVENESS Case Processing Summary N Valid Cases % 261 100.0 0 261 100.0 Excludeda Total a Listwise deletion based on all variables in the procedure Reliability Statistics Cronbach's Cronbach's N of Items Alpha Alpha Based on Standardized Items 849 851 Item Statistics Mean Std Deviation N RES1 4.60 1.079 261 RES2 4.76 1.139 261 RES3 4.64 937 261 RES4 4.72 1.131 261 87 Summary Item Statistics Mean Minimum Maximum Range Maximum / Variance Minimum N of Items Item Means 4.680 4.598 4.762 165 1.036 006 Item Variances 1.155 877 1.297 420 1.478 038 674 570 779 210 1.368 006 Inter-Item Covariances Item-Total Statistics Scale Mean if Scale Variance Corrected Item- Squared Cronbach's Item Deleted if Item Deleted Total Multiple Alpha if Item Correlation Correlation Deleted RES1 14.12 7.616 659 448 820 RES2 13.96 7.264 675 471 814 RES3 14.08 8.082 703 496 806 RES4 14.00 7.062 726 528 791 Scale Statistics Mean Variance 18.72 Std Deviation 12.702 N of Items 3.564 ASSURANCE Case Processing Summary N Valid Cases Excludeda Total % 261 100.0 0 261 100.0 a Listwise deletion based on all variables in the procedure 88 Reliability Statistics Cronbach's Cronbach's N of Items Alpha Alpha Based on Standardized Items 759 761 Item Statistics Mean Std Deviation N ASS1 4.26 1.117 261 ASS2 4.36 1.116 261 ASS3 4.18 1.049 261 ASS4 4.33 980 261 Summary Item Statistics Mean Minimum Maximum Range Maximum / Variance Minimum N of Items Item Means 4.281 4.176 4.356 180 1.043 006 Item Variances 1.138 960 1.247 287 1.299 019 502 415 568 153 1.369 003 Inter-Item Covariances Item-Total Statistics Scale Mean if Scale Variance Corrected Item- Squared Cronbach's Item Deleted if Item Deleted Total Multiple Alpha if Item Correlation Correlation Deleted ASS1 12.86 6.089 588 364 686 ASS2 12.77 6.372 525 281 722 ASS3 12.95 6.512 554 311 705 ASS4 12.79 6.734 567 335 700 89 Scale Statistics Mean Variance 17.12 Std Deviation 10.577 N of Items 3.252 EMPATHY Case Processing Summary N Valid Cases % 261 100.0 0 261 100.0 Excludeda Total a Listwise deletion based on all variables in the procedure Reliability Statistics Cronbach's Cronbach's Alpha Alpha Based on N of Items Standardized Items 863 863 Item Statistics Mean Std Deviation N EMP1 4.89 1.037 261 EMP2 4.97 1.173 261 EMP3 5.00 1.069 261 EMP4 4.89 1.061 261 EMP5 5.03 1.076 261 90 Summary Item Statistics Mean Minimum Maximum Range Maximum / Variance Minimum N of Items Item Means 4.953 4.885 5.027 142 1.029 004 Item Variances 1.175 1.076 1.376 300 1.279 014 655 542 728 186 1.343 004 Inter-Item Covariances Item-Total Statistics Scale Mean if Scale Variance Corrected Item- Squared Cronbach's Item Deleted if Item Deleted Total Multiple Alpha if Item Correlation Correlation Deleted EMP1 19.88 12.800 687 493 833 EMP2 19.80 11.947 697 495 831 EMP3 19.77 12.839 652 437 842 EMP4 19.88 12.828 660 449 839 EMP5 19.74 12.378 718 529 825 Scale Statistics Mean Variance 24.77 Std Deviation 18.972 N of Items 4.356 GEN Case Processing Summary N Valid Cases a Excluded Total % 261 100.0 0 261 100.0 a Listwise deletion based on all variables in the procedure 91 Reliability Statistics Cronbach's Cronbach's N of Items Alpha Alpha Based on Standardized Items 833 836 Item Statistics Mean Std Deviation N GEN1 4.77 966 261 GEN2 4.97 1.086 261 GEN3 4.95 999 261 Summary Item Statistics Mean Minimum Maximum Range Maximum / Variance Minimum N of Items Item Means 4.895 4.766 4.973 207 1.043 013 Item Variances 1.037 934 1.180 246 1.264 016 647 629 672 043 1.068 000 Inter-Item Covariances Item-Total Statistics Scale Mean if Scale Variance Corrected Item- Squared Cronbach's Item Deleted if Item Deleted Total Multiple Alpha if Item Correlation Correlation Deleted GEN1 9.92 3.436 732 549 733 GEN2 9.71 3.275 646 419 821 GEN3 9.74 3.393 707 524 754 Scale Statistics Mean 14.69 Variance 6.993 Std Deviation 2.644 N of Items 92 Descriptive Statistics N Minimum Maximum Mean Std Deviation Variance TAN1 261 4.46 1.429 2.042 TAN2 261 4.72 1.314 1.725 TAN3 261 4.90 1.013 1.025 TAN4 261 4.80 1.066 1.137 TAN 261 1.50 6.50 4.7213 91391 835 Valid N (listwise) 261 Descriptive Statistics N Minimum Maximum Mean Std Deviation Variance REL1 261 4.95 1.136 1.290 REL2 261 5.22 1.108 1.227 REL3 261 5.15 1.080 1.166 REL4 261 5.18 1.103 1.217 REL5 261 4.91 1.022 1.045 REL 261 1.40 6.60 5.0828 87101 759 Valid N (listwise) 261 Descriptive Statistics N Minimum Maximum Mean Std Deviation Variance RES1 261 4.60 1.079 1.164 RES2 261 4.76 1.139 1.297 RES3 261 4.64 937 877 RES4 261 4.72 1.131 1.279 RES 261 1.50 6.75 4.6801 89101 794 Valid N (listwise) 261 93 Descriptive Statistics N Minimum Maximum Mean Std Deviation Variance ASS1 261 4.26 1.117 1.247 ASS2 261 4.36 1.116 1.246 ASS3 261 4.18 1.049 1.100 ASS4 261 4.33 980 960 ASS 261 1.50 6.25 4.2807 81307 661 Valid N (listwise) 261 Descriptive Statistics N Minimum Maximum Mean Std Deviation Variance EMP1 261 4.89 1.037 1.076 EMP2 261 4.97 1.173 1.376 EMP3 261 5.00 1.069 1.142 EMP4 261 4.89 1.061 1.125 EMP5 261 5.03 1.076 1.157 EMP 261 1.20 6.80 4.9533 87114 759 Valid N (listwise) 261 Descriptive Statistics N Minimum Maximum Mean Std Deviation Variance GEN1 261 4.77 966 934 GEN2 261 4.97 1.086 1.180 GEN3 261 4.95 999 997 GEN 261 1.00 6.67 4.8953 88149 777 Valid N (listwise) 261 KMO - CUSTOMER SATISFASTION Descriptive Statistics Mean Std Deviation Analysis N GEN1 4.77 966 261 GEN2 4.97 1.086 261 GEN3 4.95 999 261 94 Correlation Matrix GEN1 Correlation GEN2 GEN3 GEN1 1.000 610 697 GEN2 610 1.000 580 GEN3 697 580 1.000 KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy .713 Approx Chi-Square Bartlett's Test of Sphericity 311.402 df Sig .000 Communalities Initial Extraction GEN1 1.000 792 GEN2 1.000 698 GEN3 1.000 770 Extraction Method: Principal Component Analysis Total Variance Explained Component Initial Eigenvalues Total % of Variance Extraction Sums of Squared Loadings Cumulative % 2.259 75.295 75.295 440 14.664 89.959 301 10.041 100.000 Extraction Method: Principal Component Analysis 95 Total 2.259 % of Variance 75.295 Cumulative % 75.295 Component Matrixa Component GEN1 890 GEN3 877 GEN2 835 Extraction Method: Principal Component Analysis a components extracted Correlations TAN REL Pearson Correlation TAN Sig (2-tailed) N Pearson Correlation REL 000 261 261 261 261 261 ** ** ** 729** 261 261 ** ** 579 679 000 000 000 261 261 261 261 ** ** 638** 000 000 000 261 261 261 ** 652** 000 000 579 000 000 N 261 261 261 ** ** ** 509 509 000 Sig (2-tailed) 548 548 642 606 Sig (2-tailed) 000 000 000 N 261 261 261 261 261 261 ** ** ** ** 814** 494 679 642 606 Sig (2-tailed) 000 000 000 000 N 261 261 261 261 261 261 ** ** ** ** ** Pearson Correlation GEN 515** 494 000 465 443 443 GEN ** 000 N Pearson Correlation EMP 429 EMP ** 000 ** 429 ASS ** 000 000 Pearson Correlation ASS 261 465 Sig (2-tailed) Pearson Correlation RES RES ** 515 729 638 652 000 814 Sig (2-tailed) 000 000 000 000 000 N 261 261 261 261 261 ** Correlation is significant at the 0.01 level (2-tailed) 96 261 Variables Entered/Removeda Model Variables Variables Entered Removed Method EMP, TAN, ASS, RES, Enter b REL a Dependent Variable: GEN b All requested variables entered Model Summary Model R 867a R Adjusted Std Error Square R Square of the R Square Estimate Change 752 748 Change Statistics 44290 F Change df1 df2 Sig F Change 752 154.984 255 a Predictors: (Constant), EMP, TAN, ASS, RES, REL ANOVAa Model Sum of Squares Regression Residual Total df Mean Square F 152.006 30.401 50.020 255 196 202.026 260 Sig 154.984 000b a Dependent Variable: GEN b Predictors: (Constant), EMP, TAN, ASS, RES, REL Coefficientsa Model Unstandardized Standardized Coefficients Coefficients B Std Error (Constant) 153 191 TAN 157 036 REL 263 RES t Sig Collinearity Statistics Beta Tolerance VIF 600 424 159 2.588 013 596 1.436 045 260 5.815 000 487 1.855 173 043 174 2.708 009 518 1.632 ASS 194 045 179 4.324 000 569 1.758 EMP 458 050 453 9.128 000 404 1.937 c Dependent Variable: GEN 97 000 98 [...]... factors to customer satisfaction for motor vehicles insurance services of BHV (3) Proposed solutions to enhance customer satisfaction with motor vehicles insurance services of BHV 1.3 Research questions The main research question in this study is defined as follows: (1) What is the satisfaction of customers, methods of assessment of customer satisfaction with the quality of insurance services? (2) The... assessment of the quality of customer service in motor vehicle insurance of BHV? What factors affect customer satisfaction for motor vehicle insurance service of BHV? (3) How to improve customer satisfaction for service quality of motor vehicles insurance of BHV? 1.4 Scope of the study Study subjects were identified as: customer satisfaction for service motor vehicle insurance in BHV Scope of the study:... of extreme competition Investigating what customers’ awareness and thinking about the services offering, Hung Vuong can redesign, modify or revise the products providing to its users Doing this Hung Vuong can bring the satisfaction to the customers and make them stay with company while attracting new ones Nowadays customers have more chances approaching many information so becoming quality conscious,... offerings and then choose what they perceive the better quality services Therefore, it is necessary to conduct this study to find out the problems in service delivery and then enhance customer satisfaction The findings of this study can help the managers in other Insurance Companies operating in Ho Chi Minh City in general catching the main dimensions affecting on Insurance service quality Bringing... existing relevant literature and models 2.1 Overview of the Insurance Industry in Vietnam The insurance industry provides protection against financial losses resulting from a variety of perils By purchasing insurance policies, individuals and businesses can receive reimbursement for accidental losses Vietnam started liberalising its insurance market by allowing foreign insurers to participate in the... Ministry of Finance (MOF) annually, insurance business revenue increased by an average annualised rate of 13% to 15% a year Growth is likely to continue for the years to come Non-life insurance products include: (i) Property and damage insurance, (ii) Insurance for goods in transit by road, sea, waterway, rail and air, (iii) Aviation insurance, (iv) Motor vehicle insurance, 16 (v) Fire and explosion insurance, ... customers Customer satisfaction arising from customer service is a business priority today and is vital to future growth and success (Smith, 1991) According to Hofstee (2006), the importance of customer satisfaction in the insurance industry includes: survival of businesses in a competitive environment, meeting the ever-increasing demands made by the customers, contributing to the robust growth of the businesses... improving service quality and efficiency for Hung Vuong Assurance Corporation (BHV) 13 1.2.2 Specific Objectives This study has the following specific objectives: (1) The system of theoretical basis and practical customer satisfaction for insurance services (2) Assess the level of customer satisfaction for motor vehicles insurance services of BHV, measure the degree of influence of the factors to customer. .. (vi) Marine hull insurance and ship-owners’ civil liability insurance, (vii) Liability insurance, (viii) Credit and financial risks insurance, (ix) Business loss insurance, and (x) Agriculture insurance Unlike life insurance products, the rules, terms and premium scales of non-life insurance products do not have to be approved by the MOF before they may be sold However, the MOF may request an insurer... and financial matters; The work of internal audit; Monitoring and addressing economic contracts; Control costs of company operations 3.2 Overview about Insurance Insurance industry is business operating the risk, shares losses with customers, insurance is a product of service and has its own specific characteristics , very abstract but concret For customers, they buy insurance for the peace of mind in ... the Insurance Industry in Vietnam The insurance industry provides protection against financial losses resulting from a variety of perils By purchasing insurance policies, individuals and businesses... and Raulin, 1997) Sample size can be chosen in applying method: firstly, based on a list of customers collecting from Hung Vuong for individuals buying insurance of Hung Vuong Assurance in HCMC... customer satisfaction with the quality of insurance services? (2) The situation assessment of the quality of customer service in motor vehicle insurance of BHV? What factors affect customer satisfaction