Antecedents of Customer Retention with Special Reference to Motor Insurance Industry in Sri Lanka

Abstract

This study examines the antecedents of customer retention with special reference to motor insurance industry in Sri Lanka and identifies appropriate retention strategies. To achieve these objectives, six hypotheses were developed and tested. Based on the literature review, the researcher identified five independent variables, namely customer satisfaction, payment equity, service convenience, trust and switching cost, that could impact on customer retention. The primary data was collected from a sample of 150 adult motor insurance policy holders in Sri Lanka. Correlations, One-Way Anova and regression tests were performed to test the hypotheses. Findings of the study revealed that service convenience, customer satisfaction and customer trust have significant impacts on customer retention in the Sri Lankan motor insurance industry. Therefore, insurance providers should pay special attention to these dimensions when designing appropriate marketing strategies. Since other dimensions have no significant impact on customer retention, the above dimensions could be identified as the antecedents of customer retention in the Sri Lankan insurance industry.