A Comparative Analysis of Customers’ Satisfaction for Conventional and Islamic Insurance Companies in Pakistan

Abstract

Islamic finance and insurance are penetrating in international markets especially after world economic crisis since 2008. This research is an attempt to analyze customers’ satisfaction for the services of conventional and Islamic insurance companies in Pakistan. A modified SERVQUAL model is used to measure the service quality in the constructs of reliability, responsiveness, empathy, convenience and Sharī ʻ ah compliance. For this purpose primary data of 400 customers, 173 from conventional and 227 from Islamic insurance companies, is estimated through propensity score matching as well as linear, non-linear and non-parametric classification techniques. The results on service quality indicate significant gap between expectation and perception of overall insurance industry. No significant difference of service quality is found between conventional and Islamic insurance companies in the constructs of reliability, responsiveness, convenience and empathy. The findings suggest a significant improvement in the service quality of conventional and Islamic insurance industry. Particularly, the conventional insurance companies need to focus on young people, private employees and lower income groups, whereas the Islamic insurance companies have to put more efforts to improve Sharī ʻ ah compliance and to attract self-employed and higher income groups.