Service Quality and Customer Loyalty in Malaysian Islamic Insurance Sector Exploring the mediating effects of Customer Satisfaction

Abstract

The purpose of this study is to explore the mediating role of customer satisfaction \nbetween service quality dimensions and customer loyalty in Malaysian Islamic insurance sector. \nBased on the literature, six service quality dimensions were used to develop theoretical \nunderstanding about customer satisfaction and loyalty. This study proposes and tests a \nframework via structural equation modeling (Amos-16). The results of the analysis indicated \nthat four of six service quality dimensions (tangible, responsiveness, fairness, and reliability) \npositively influence customer satisfaction which further influences customer loyalty. In other \nwords, customer satisfaction mediates the relationship between four of six service quality \ndimensions (tangible, responsiveness, fairness, and reliability) and customer loyalty. Only two \nservice quality dimensions (assurance and empathy) were not significantly related with \ncustomer satisfaction and loyalty. The findings further suggest that fairness have strongest \neffect on customer satisfaction and loyalty. The result of the study will help the managers and \nprofessionals to better understand how customer perceive service quality dimension and how \nthese service quality dimensions are important for customers as well as for the organization. \nThe study tested the impact of service quality dimensions on customer satisfaction and \ncustomer loyalty and found that tangibility, responsiveness, reliability, and fairness positively \ninfluence customer satisfaction. Therefore, the result of the study will help managers and \nprofessionals about how to deal with the customers to maximize the organizational profit. The \nresult of the study suggested that fairness have strong influence on customer satisfactions and managers should pay attention on the fairness to improve service quality and maximize the \ncustomer satisfaction. As per our best knowledge, the suggested model and Islamic insurance \nsector have never been investigated before. (Abstract by authors)