Measuring customer loyalty using perceptions of trust, service quality, and switching costs as well as customer satisfaction in the life insurance industry – a replication study

Abstract

Introduction Customer loyalty is an area of constant research and antecedents of customer loyalty are well researched and understood. However, the application of existing customer loyalty frameworks in the life insurance industry is very limited, particularly in the South African context. Therefore this study will test an existing customer loyalty theoretical framework in the life insurance industry. Purpose This study aims to determine whether perceptions of service quality, switching costs, and trust predict customer satisfaction, and in turn, whether customer satisfaction predicts customer loyalty. Research methodology A descripto-explanatory approach coupled with a positivism philosophy was adopted in this study. A mono method was used to collect data using an online survey and descriptive statistics were calculated to analyse the data. Two factors analyses were conducted to confirm that the measurement scales works and structural equation modelling were used to answer the research questions. Findings This study found a significant relationship between service quality and trust, service quality and switching costs, trust and switching costs as well as service quality and customer satisfaction. A similar relationship was found between trust and customer satisfaction and customer satisfaction and loyalty. However, the relationship between switching costs and customer satisfaction was not statistically significant.