Assessing the Impact of Customer Relationship Management Practices on Customer Loyalty in Insurance Sector

Abstract

Insurance sector in India seems to be dynamic in nature. During past few decades, there was a revolutionary change witnessing segments of speedy growth but in the current scenario, insurance industry in India is serving with a number of new national and international players facing escalating antagonism which leads to sluggish growth, increasing cost, etc. To continue its existence in a competitive business situation and achieve advantageous growth for long term sustainability, insurance industry needs to focus on building and maintaining good relationships with their esteemed customers. The main objective of this research paper is to assess the impact of various Customer Relationship Management (CRM) practices on customer loyalty in insurance sector. The responses of 224 customers from four public general insurance companies operating in Jammu district of J&K state are considered for this study. Based on the findings of the empirical investigation using statistical tools namely, exploratory factor analysis, confirmatory factor analysis, and structural equation modeling, the study has revealed that there is a significant and positive impact of CRM practices on customer loyalty. Further, all the dimensions of CRM significantly affects customer loyalty. Only four CRM practices were considered in the present study so the future research should focus on rest of the practices. This paper encourages managers of insurance companies to focus their attention on customer redressal machinery in order to ensure long term relationship with their customers.

Keywords: CRM, Customer Loyalty, Conflict Handling, Communication

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