A Gap Analysis of Customers Expectations and Perceptions on Service Quality

in Insurance Sector: (An Empirical Study on Selected Insurers in Sri Lanka)

Weedige S. Sanjeewa
Faculty of Business Studies & Finance, Wayamba University of Sri Lanka, Kuliyapitiya
Introduction
With the liberalization of insurance industry in Sri
Lanka, there is a high completion among industry
players. Nowadays, with increased competition, service
quality has been recognized as a key factor in keeping
the competitive advantage and sustaining satisfying
relationships with customers ( Zeithmal et al., 2000)
The objectives of the study;
To evaluate the Quality of Service in selected insurers,
To identify the gap between customer expectation and
their perceptions on service quality.
To identify the areas that need to be improved to
deliver quality service.

Dimensions of Service Quality

The SERVQUAL scale is the principal instrument
widely used to assess service quality of a variety
services. Parasuraman et al., (1998)
conceptualized six dimension model of
SERVQUAL;
Tangibles : Physical facility, equipment and
appearance of personnel.
Reliability : Ability to perform the promised
service dependably and accurately.
Responsiveness : Willingness to help
customers and provide a promote service.
Assurance : Knowledge and courtesy of
employees and their ability to inspire trust and
confidence.
Empathy : Caring and Individualized attention
that the firm provides to its customers.
Accessibility : convenience and userfriendliness to access their service

Methodology
Data was collected from 123 customers of five leading
insurance companies based on convenience sampling and
structured SERVQUAL questionnaire containing two
sections: Customers expectations and customers
perceptions, each containing of 26 questions of six
dimensions.
The respondents were asked to rate their expectation and
perceptions of service offered by the respective insurers.
A seven-point Likert scale was used.
Gap analysis and multi regression (stepwise) were used
to analyze the data using SPSS system.

Results
The results of the gap analysis shows that
Empathy shows a bigger gap between customer
expectation and perception of service quality. Insurance
companies has to reduce this gap giving individual
personal attention to understand customer specific needs.
Second lager gap was observed in the accessibility
dimension. The customers of the insurers expect extended
working hours on Saturdays for their convenience and also
some customers are dissatisfied with internet and mobile
insurance services.
In the responsiveness dimension, there is a bigger gap
in the attribute of responding to customer queries at busy
time.
The multi-regression analysis shows that the
dimensions(Figure 2) Empathy, Reliability, Assurance
are positively influenced to the insurance service quality
R square value of model summery shows that
independent variables (empathy, reliability, accessibility)
account for 48.6% of variance in service quality.

Figure 1 : Average Gap Score of Selected

Insurers
No
Dimensions
Gap Scores
1
2
3
4
5
6

Average Score for Tangibles

Average Score for Reliability
Average Score for Responsiveness
Average Score for Assurance
Average Score for Empathy
Average Score for Accessibility
Total
Average (total/6) Un-weighted Score

0.55
0.86
0.95
0.73
1.24
1.03
5.36
0.893

Figure 2 Model Summary : Multi-Regression

Mode
R
R Square
Adjusted R
Std. Error of
( Stepwise
Method)
Square
.395
.458
.479

the Estimate
.6927
.6553
.6429

1
.631(a)
.398
2
.681(b)
.464
3
.697(c)
.486
(a) Predictors : (Constant) , Empathy
(b) Predictors : (Constant), empathy, reliability
(c) Predictors : (Constant), empathy, reliability, assurance

Conclusion
Insurers have to understand the changing needs of
customers, their aspirations and expectations to create value.
Insurers should also have a strong CRM system that would
indicate the worth of the customer and the ability to
understand his needs interacting with him, so as to cross sell
their products.
Skill set of employees need up gradation so as to make
them more confortable with the latest technology while
educating customers to use the same in day to day dealings
Response on service reliability should be continuously
obtained from customers to enhance service quality
The study implies that insurers should reduce the service
gap to deliver a superior quality service to retain existing
customers as well as to attract new customers.