norjan binti saleem

CUSTOMER SATISFACTION TOWARD AGENTS AT ETIQA BANDAR BARU KLANG

NORJAN BINTI SALEEM 2008525101

BACHELOR OF BUSINESS ADMINISTRATION (HONS) INSURANCE

FACULTY OF BUSINESS MANAGEMENT UNIVERSITI TEKNOLOGI MARA

KAMPUS BANDARAYA MELAKA

NOVEMBER 2010

CUSTOMER SATISFACTION TOWARD AGENTS AT ETIQA BANDAR BARU KLANG

NORJAN BINTI SALEEM

2008525101

Submitted in Partial Fulfillment of the Requirement for the

Bachelor of Business Administration (HONS) Insurance

FACULTY OF BUSINESS MANAGEMENT UNIVERSITI TEKNOLOGI MARA KAMPUS BANDARAYA MELAKA

NOVEMBER 2010

BACHELOR IN BUSINESS ADMINISTRATION (HONS) INSURANCE

FACULTY OF BUSINESS MANAGEMENT

UNIVERSITY TECHNOLOGY MARA

MELAKA

”DECLARATION OF ORIGINAL WORK"

I’M, NORJAN BINTI SALEEM, MATRIX NO. 2008525101

Hereby, declare that, • This work has not previously been accepted in substance for any degree,

locally or overseas, and not being consonantly submitted for this degree or any other degrees.

• This project paper is the result of my independent work and investigation, except where otherwise stated.

• All verbatim extracts have been distinguished by quotation marks and sources of my information have been specifically acknowledged.

Signature Date

…………………………… …………………………...

LETTER OF SUBMISSION

November 2010

The Head of Program

Bachelor of Business Administration (Hons) Insurance

Faculty of Business Management

Universiti Teknologi MARA

75300 Bandaraya Melaka

Melaka

Dear Sir,

SUBMISSION OF PROJECT PAPER

Attached is the project paper titled “CUSTOMERS SATISFACTION TOWARD

AGENTS AT ETIQA BANDAR BARU KLANG” to fulfill the requirement as

needed by the Faculty of Business Management, Universiti Teknologi MARA

Thank You.

Yours sincerely

NORJAN BINTI SALEEM

2008525101


ACKNOWLEDGEMENT

First of all I would like to praise my grateful of Allah S.W.T for giving me the strength and

patience to complete the project paper. Alhamdulillah, with the grace and blessings of

the Almighty ALLAH S.W.T, I direct to complete this research, which could have not

been proficient without HIS willing.

My sincere gratitude goes to my dedicated advisor, Miss Nurul Aida Harun for always

spending time with me to contribute her idea and guided me to perform this report until

complete. Through her help, comments, ideas, and suggestions I have benefited

extremely and her steady support from the beginning until now is much appreciated.

I would also like to express my gratitude to my second examiner, Prof. Madya Hj Ahmad

Bin Wahid for her guidance and advises towards my project paper.

I also would like to extend my appreciation also goes to staff Etiqa Bandar Baru Klang

especially Mr. Azhari Ismail which is my supervisor and truly grateful to all respondent

for their cooperation by completing my questionnaire.

Lastly, I would like to thanks to my beloved family, and anyone who had already give me

a lot of their support, assistance and encouraging me to complete this research study.

May the kindness and help given would be bless by God.

Thank you.

TABLE OF CONTENTS

Acknowledgement iv Table of Contents v List of Tables vii List of Figures viii Abstract ix

1 Chapter 1 – Introduction 1.1 Introduction 1 1.2Background of Study 6 1.3 Problem Statement 10 1.4 Research Question 14 1.5 Research Objectives 15 1.6 Scope of Study 16 1.7 Significance of Study 17 1.8 Limitations of Study 18 1.9 Definitions of Term 20 1.10 Theoretical Framework 25

2 Chapter 2 – Literature Review 25 2.1 Customer Satisfaction 27 2.2 Factor That Affect Customer Satisfaction 30 2.3 Importance of Customer Satisfaction 31 2.4 Quality Service 37 2.5 Insurance

3 Chapter 3 – Research Methodology 3.1 Introduction 39 3.2 Research Design 39 3.3 Sampling 41 3.4 Data Collection Method 42 3.5 Data Analysis 47

4 Chapter 4 – Finding & Analysis 49 4.1 Introduction 49 4.2 Reliability 50 4.3 Respondent Profile 56 4.4 Descriptive Analysis 57 4.5 Descriptive Statistic 59

4.6 Regression

5 Chapter 5 – Conclusion & Recommendation

5.1 Introduction 61 5.2 Conclusion 61 5.3 Recommendation 64 Bibliography 67 Appendices Appendix A Appendix B Appendix C

LIST OF TABLES Table 1.1 Numbers of Licensed Direct Insurers 2 and Professional Reinsurer in Malaysia Table 1.2 Numbers of registered agents 3 Table 1.3 Numbers of agent by country in Malaysia 4 Table 1.4 Life Insurance Companies in Malaysia rank 8 according to their size of market share. Table 1.5 Statistic on malpractices by 12 the agents/agency leaders and action taken Table 4.1 Realibility Statistic 49 Table 4.2 Frequency of Respondent by Education 54 Table 4.3 Rule of Thumb 56 Table 4.4 Level of customer satisfaction towards agent 56 at Etiqa Bandar Baru Klang Table 4.5 Mean & Std. Deviation for Dependent

Variable. 57 Table 4.6 Coefficients (a) Factor That Influence 59 the Customer Satisfaction

LIST OF FIGURES Figure 1.1 SERVQUAL model for Theoretical Framework 25 Figure 2.1 The Kano Model of Customer 27 (Consumer) Satisfaction. Figure 4.2 Frequency of Respondent by Gender 50 Figure 4.3 Frequency of Respondent by Race 51 Figure 4.4 Frequency of Respondent by Age 52 Figure 4.5 Frequency of Respondent by Income 53 Figure 4.6 Frequency of Respondent by Status 54 Figure 4.7 Frequency of Respondent by became a

Customer 55 Figure 4.8 Mean of Five Dimension for Customer

Satisfaction 57

ABSTRACT

Insurance is about helping people to protect their assets, maintain their lifestyles and

build better future to them. Customer is an asset company so they become important to

know about their needs and wants for quality in their products and services. Therefore, if

the company’s apparent performance exceeds a customer’s expectations, then the

customer will satisfy and if not then the customer will dissatisfied.

The research is conducted to study the customer’s satisfaction towards agent at Etiqa

Bandar Baru Klang. Furthermore, research objectives for this study are to identify the

level of customer satisfaction towards service provided, the level of service quality

provided by agent at Etiqa Insurance & Takaful and to identify the most important factors

that will influences customer satisfaction.

The frequency, descriptive analysis, and regression from Statistical Package for Social

Sciences (SPSS) been used in this research, a clear findings and result will be

observed. The findings showed that most of the customers were satisfied with the

services provided by the agent at Etiqa Insurance & Takaful.

Overall, the most of customer are satisfied with the services provide by agent at Etiqa

Insurance & Takaful, but they need to overcome the weakness with the service provided

by agent. Hence, in order to improve and overcome the weakness to increase the

customer satisfaction, the researcher gives some recommendations and suggestions

after the final analysis have been made.

CHAPTER 1 INTRODUCTION

[Customer Satisfaction towards agent at Etiqa Insurance & Takaful]

1

CHAPTER 1:

Introduction

1.1 Introduction

Insurance is about helping people to protect their assets, maintain their lifestyles

and build better future to them. It also can be defined as transfer of risk to the

insurer, will help to bear the losses that insured had been burden and been agrees

to compensate the losses. Without insurance the insured, business enterprise or

other party will have to burden the risk on self which will be costly.

Insurance also can remove fear and worry for losses of individuals, business

enterprise or others and in the same time insurance also have other benefit such as

saving, social benefit, and investment funds.

There are two classes of insurance such as life insurance and general insurance.

The risk have been covered by life insurance such as sickness, old age, premature

death and others will be occur to all of us but the risk covered for general

insurance such as motor vehicles, marine and aviation, burglary and others may or

may not be occur the losses. Types of insurance include property and casualty,

life, health, disability, and long-term care insurance.

The insurance company not selling their products to the client or customer, they

will make the process of proposal form, documentation, handling the claim, give


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training and motivation talk and other service. Customer can buy the insurance

products through the agent for individual and broker for company to protect their

life or losses.

McKay (2008) says that the “Insurance agents may be referred to as insurance

sales agents, help clients choose insurance policies that suitable their needs. The

clients of insurance agent include individuals and families as well as businesses.

Beside that, Captive agents work for an insurance company, and only sell that

company's products and for the Independent insurance agents, or brokers,

represent several companies.”

Customer have their right to choose the suitable products and service by the

insurance company and agent, they must make the decision voluntarily and not

forcedly. But customer can get the advice from the agent about the product and

services of the insurance company and will be the financial planning services such

as retirement planning.

Company Number

Insurers and Professional Reinsurance 46 Brokers 33 Loss Adjuster 36 Insurance Agency More that 100

Table 1.1: Numbers of Licensed Direct Insurers and Professional Reinsurer in

Malaysia


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According to Bank Negara on 2009 Annual Reports state that; there are 46

insurers and professional reinsurance in Malaysia. Beside that, there are 33

licensed insurance brokers, 36 Adjusters Company and more than 100 insurance

agencies operating in Malaysia insurance industry.

Table 1.2: Numbers of registered agents

Therefore, the numbers of registered agent in the insurance company reach 80,078

for life insurance and 35,930 for general insurance in the year 2009. The statistics

show that the insurance industry had generated a huge number of customer and

agent in Malaysia. “Agent should be registered with the mandatory insurance

associations under the act and not directly supervised by the bank. The Life

Insurance Association of Malaysia for the life insurance agents and Persatuan

Insurans Am Malaysia for general agents need been registered under this act. The

minimum requirement for a new agent was raised to the Sijil Pelajaran Malaysia

(SPM) but all agents are required to pass the compulsory Pre-Contract

Examination for Insurance Agents (PCEIA) conducted by the Malaysian

Insurance Institute” (Annual Report of Bank Negara 2005).

Insurance Numbers of registered agent

Life insurance 80,078

General insurance 35,930


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Now days, the numbers of agent been slowly decrease in the 2009 and we also

have been heard about the problem behavior of the agent in the insurance industry

such as given false information to the customer to get the business from them.

They also take advantage to the customer that does not have good knowledge

about the product and service of insurance, they reach the target and commission

with misleading. The geographical distribution of agents is as below:

No. of Agents

State/Years 2008 2009

Johore 5,444 5194

Kedah 1724 1624

Kelantan 702 649

Melaka 1498 1417

N.sembilan 1420 1347

Pahang 1616 1473

Penang 3746 3562

Perak 3163 2891

Perlis 120 124

Sabah 2161 1939

Sarawak 2782 2360

Selangor 7585 7193

Terengganu 598 556

WP K.Lumpur 6118 5553

WP Labuan 30 29

Singapore 59 19

Table 1.3: Numbers of agent by country in Malaysia


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This table shows the numbers of agent by country in Malaysia, the higher number

of agent in Selangor and Johor. The large numbers of agent in the Malaysia need

to improve their service because sometimes agent do their job only for part time

so that they lack of time to gain the knowledge through training provided by the

insurance company. Therefore that, this research to determine whether service

provide by the agent are satisfy by the customer.


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1.2 Background of study

The company is registered under the 1984 Takaful Act of Malaysia, its structure

is that of a Modified Takaful whereby the surplus from its operations are divided

80% policyholder and 20% shareholder for life operations and 50% each for non-

life products. The board of directors is selected by the shareholders (the

Malaysian National Insurance Company and the Malaysia Islamic Economic

Development Foundation). The company has 511 employees and provides

individual life, group life, fire, motor, marine and aviation products through

banking cooperative, agents and direct distribution

Mayban Fortis Holdings Berhad was formed in 2001 as collaboration between

Malaysia's largest local bank, Malayan Banking Berhad (Maybank) and Fortis

International NV, one of the largest providers of integrated financial services in

Europe. With a stake of 70% by Maybank and 30% by Fortis, the partnership

saw the grouping of all Maybank's insurance companies under Mayban Fortis

Holdings Berhad.

Mayban Fortis MNI Takaful

Etiqa Insurance & Takaful


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In 2005, Mayban Fortis grew significantly with the acquisition of Malaysia

National Insurance Berhad, Malaysia's largest national insurer and its subsidiary,

Takaful Nasional Sdn Bhd, Malaysia's premier Takaful provider. Financially, the

merger catapulted Mayban Fortis to the position of second largest insurer in

Malaysia.

At the end of 2007, the merger effort with Malaysia National Insurance and

Takaful Nasional culminated in the rebranding of the entire Insurance and

Takaful group to the new brand name - Etiqa. Etiqa will be the single master

brand for all conventional and Takaful businesses under Mayban Fortis. An

ongoing corporate streamlining exercise will see the eventual grouping of five

operating entities under two anchor subsidiaries for Conventional and Takaful

respectively: Malaysia National Insurance Berhad, now known as Etiqa

Insurance Berhad, and Takaful Nasional Sdn Bhd, renamed as Etiqa Takaful

Berhad. (Source adapted from www.etiqa.com.my)

The insurance company makes the process of documentation of the claim for

general and life insurance. Beside that, they also do the service such as renew

insurance, issue the cover note, make a quotation for the general insurance and

also increase the sales production of the agent. Customer and agent came to the

Etiqa to get the service at the counter such as make a payment, check the

production of agent, print income statement, ask for policy link, and send the

proposal form and others.


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Rank

Companies

2009 Market Share

1 Great Eastern 359.6 23.1%

2 Prudential 231.6 14.9%

3 ING 168.9 10.9%

4 AIA 160.8 10.3%

5 Allianz 119.4 7.7%

6 HLA 100.2 6.4%

7 Maybank Life 65.4 4.2%

8 Am assurance 63.2 4.1%

9 UNI Asia Life 57.4 3.7%

10 MAA 57.4 3.7%

11 MCIS Zurich 46.2 3.0%

12 CIMB Aviva 29.4 1.9%

13 TM Asia Life 28.9 1.9%

14 Etiqa 28.8 1.9%

15 MANU Life 26.3 1.7%

TOTAL 1543.5 97.5%

Table 1.4: Life Insurance Companies in Malaysia rank according to their size of

market share.

(Source: Life Insurance Association Malaysia, LIAM)


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Table 1.0 above shows the market share of all Life Insurance Companies in

Malaysia market share for the year 2009. During 2009 shows that ETIQA

INSURANCE & TAKAFUL BERHAD is not listed from the top 10 rank as it is

currently rank 14 from overall life insurance companies in Malaysia with total

amount of 280,800 market share with holding only 2% from overall market share

accumulate. This shows that ETIQA INSURANCE & TAKAFUL BERHAD is

still in growth stage in marketing theories and need take necessary steps to be

most preferred companies in wealth management such as rebranding. To ensure

the growth of, ETIQA INSURANCE & TAKAFUL BERHAD the companies

has to do aggressive marketing in order to be well known and to ensure the brand

is always in clients mind so that ETIQA INSURANCE & TAKAFUL BERHAD

will be more effective and aggressive in the market.

To maintain all this insurance company must have great agents to influence the

customers that insurance is the one of important thing to have in the life and give

the good service to them. As foundations, the insurance company must select

good agents to represent their company and give good training to the agents. The

training provided is about the company product, about the self confidence and

the marketing strategic so they will have good knowledge to influence the

customer.

For the agents, they must work hard to ensure that all the policies are properly

sell and in the same time need to give the good service to the customer.


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Appreciate all the benefit and training given by the company and agents are

bound to reach their budget for each financial year end.

1.3 Problem statement

According to Bank Negara on 2009 Annual Reports state that the numbers of

registered agent in the insurance company reach 80,078 for life insurance and

35,930 for general insurance in the year 2009. So it show there are many of agent

in our country but whether the number of agent are satisfaction with the service

been provided to the customer. However, this study will be show to us whether

customer satisfaction with the agent that given services to them.

The research problem is the customer satisfaction towards the agent service such

as detail information about the products. Midwest news stated that journal

insurance department American Mutual of Illinois (2010) by the insurance journal.

“Specifically, the agents and company failed to inform the service members that

they were purchasing life insurance and misrepresented the life insurance as a

savings plan”. Since the customer had been complaining about the information

given by agent not detail and clarity, this will make problem during the customer

ask for claim.

Problem can be arise when the services that provided by the agent at Etiqa Bandar

Baru Klang to the customer was misleading that been show in the statistic on

malpractices by the agent to the customer. Agent work as an advisor to the


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customer and help customer for given clarity information about the product and

risk been covered in the policy. The agent must act professional and friendly to

the customer, not being selfish to get the business from customer. Besides that,

agent will receive the commission or bonus when they get the business from the

customer, agent no supposedly to being selfish to receive a commission or bonus

by given false information or misleading.

It will become the bad reputation when the agents not explain properly about the

product and services to the customer, so the reputation of insurer and agent need

to been aware. Beside that they need to been friendly and comfortable to the

customer when sell the policies not been annoying to them. According to the Dr

Ja’afar Che Mat, director of Tuanku Ja’afar Hospital (HTJ) say that patient should

be allowed to get rest and treatment at the hospital in peace and the insurance

agents can discuss matter with their client after they discharged.


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The statistic on malpractices by the agents/agency leaders and action taken by the

company for the period from 1stJuly 2009 to 30th June 2010

NO OFFENCE TOTAL TERMINATEDUNDER INVESTIGATION

1 Misleading & False

Information

54 5 49

2 Misappropriation of

premium

13 8 5

3 ROP/ROC 25 LAST WARNING

4 Involve with other

Takaful

28 20 8

5 Breaches and

unethical behavior

19 3 16

Table 1.5: Statistic on malpractices by the agents/agency leaders and action taken.

According to Head, Intermediaries, Benefit, and Remuneration Administration,

the table show about the offence of agent for 1 year. The offence of misleading

was the top mistake has been done by the agent and it will make the bad

reputation of customer towards agent or insurer. The statistic on malpractices

show the mistakes or offence been made by agent to the customer and insurance

company. Increasing of the malpractices will give bad impact to the insurance

company because the level of customer satisfaction will be low. This study is to


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determine the satisfaction of customer towards the service provided by the agent,

because this statistic been show that several mistakes made by agent and do not be

professional. When this happen customer not satisfy with the service by agent and

the sales of agent also will decrease and in the same time the insurance company

will get the impact by the customer which they will put the blame to the insurance

company and the production of the insurance company may be decrease cause of

the bad reputation.

This research is to look the level satisfaction of the services provided by the agent

at the insurance company. As the research could present significant findings on

the reality of the satisfaction of the service provided. The services is in term of

help client choose insurance policies, explanation of the products, collected

money on the behalf of the customer, help their clients fill out the necessary forms

to obtain the desired insurance.


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1.4 Research Questions

This study will explore the research questions such as:

1.4.1 What are the levels of customer satisfaction towards services provided by

agent at Etiqa Insurance & Takaful?

1.4.2 What is the level of service quality provided by agent at Etiqa Insurance &

Takaful?

1.4.3 What are the most factors that influence customer satisfaction towards

services provided by agent at Etiqa Insurance & Takaful?


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1.5 Research objectives

This study is to explore the customer satisfaction among the agent towards services

provided by agent at Etiqa Bandar Baru Klang. The following will be the objectives of

the study:

1.5.1 To identify the level of customer satisfaction towards service provided by

agent at Etiqa Insurance & Takaful.

1.5.2 To identify the level of service quality provided by agent at Etiqa

Insurance & Takaful.

1.5.3 To identify the most factors that influences the customer satisfaction

towards services provided by agent at Etiqa Insurance & Takaful.


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1.6 Scope of study

This research focus on the customer satisfaction towards agent’s which provided services

to customer. The target respondent is the customer at Etiqa Bandar Baru Klang and 50

customers will be participated in this survey. Even though there are more than 20

insurance organizations in Malaysia, for this research purposes, the researcher only focus

on once insurance organization in this research. This study focus on customer at Etiqa

Bandar Baru Klang located at Jalan Tiara 2A/KU1 Bbk Commercial Centre Bandar Baru

Klang.


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1.7 Significant of study

The significant of survey on this level satisfaction customer towards agents to the

services provided by the Etiqa Bandar Baru Klang.

1.7.1 Student

This research will help the student to gain knowledge and information

about the agent and also provides them knowledge about the right of

customer. This research also can help the student to take as a reference to

make their survey or research.

1.7.2 Etiqa agent

To giving them the information about the customer satisfaction and

perception to the agent, so they can improve the behavior and attitude also

gain more knowledge about the products and services.

1.7.3 Etiqa (company)

This study will determine the customer satisfaction towards agent, so it

advantage to the company to highline their problem and dissatisfaction by

the customer to the agent services.


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1.7.4 Researchers

This study giving the opportunity to the researcher to analyze, observe and

interpret data collected. Beside that, the researcher will improve the

communication skill and gain new knowledge.

1.8 Limitation of study

1.8.1 Cost limitation

During the practical training the researchers need to see the advisor to get

the information and advice from the lecture. The cost of transport to see

the advisor is a bit expensive which two times every month needs to see

the advisor and the cost of printed the research report and proposal also

expensive.

1.8.2 Time limitation

The duration of the practical training was relatively short which starting

on June until October and in the same time need to complete the research

too. They need longer time to get more sources to provide best result of

finding to this study and lack of time doing the project paper because the

researches need to join the activities and event at the practical training.


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1.8.3 Location limitation

The location between University Technology Mara Malacca and the

researcher house and working place is far so it will make the pressures to

the researcher because need to manage time properly and in the same time

need to complete the thesis.

1.8.4 Lack of Experience

The more experiences in conducting research can gain of knowledge and

good research also quality. The researcher does not have much experience

to conduct the research and need carefully to organize the research, beside

that the researcher has limited resources and information because some

journal, articles are private.


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1.9 Definition of terms

1.9.1 Insurance

Insurance is an agreement or deal, called an insurance policy, in which the

insurer agrees to pay the insured of any loss suffered by accident or death

called an insurance premium whereby a group of individuals facing

similar risks can share the accidental losses of the unlucky few by the

transfer of such risks to the insurer who agrees to reimburse the losses.

The losses covered by the policy may include property damage or loss

from accident, fire, theft or intentional harm; medical costs and others.

1.9.2 Agent

An agent is some one who is authorized to act on behalf of another or

represents an insurer and insurance agent may be authorized to request

insurance business, collect premium and issue cover notes on behalf of the

insurers. Agents are required to pass an examination known as Pre

Contract Examination (PCE) before they can register with approved by

PIAM or LIAM. There are different kinds of agent such as corporate

agent, dual agent, foreign agent and independent agent.


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1.9.3 Customer

A customer refer as a client, buyer or purchaser is usually used to refer to

a current or potential buyer or user of the products of an individual or

organization, called the supplier or seller. This is typically through

purchasing or renting goods or services, it also includes by extension any

entity that uses or experiences the services of another. Beside that, a

customer may also be a viewer of the product or service that is being sold

despite deciding not to buy them. However, customer also has a more

generalized meaning as in customer service and a less commercialized

meaning in not-for-profit areas. It also implies a narrowly commercial

relationship involving the purchase of products and services. However,

some situation or environment, in which the emphasis is on being helpful

to the people one is dealing with rather than on commercial sales,

comfortably use the word customer to both internal and external customers.

1.9.4 Satisfaction

The level of customer approval or satisfied when comparing a product's or

service performance with his or her expectations. Also could refer to

discharge, extinguishment, or retirement of an obligation to the acceptance

of the obligor, or fulfillment of a claim. While satisfaction is sometimes


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1.10 Theoretical Framework

INDEPENDENT VARIABLE DEPENDENT VARIABLE

Figure 1.1: SERVQUAL model for Theoretical Framework

Tangibles

Responsiveness

Reliability

Assurance

Empathy

Customer

Satisfaction


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SERVQUAL model developed by Parasuraman & Zeithaml (1985, 1986, 1988,

1991, 1993, 1994; 1990).

The SERVQUAL models purposes five dimensions such as:

Tangibles – the appearance of the physical facilities and materials related to the

service.

Reliability – the ability to perform the service accurately and dependably.

Responsiveness – the willingness to help customers and provide prompt service.

Assurance – the competence of the system and its security, credibility and

courtesy.

Empathy – the ease of access, approachability and effort taken to understand

customers’ requirements. The SERVQUAL model can identify level of service

quality experienced by customer is to determine the gap between their

expectations and perceptions to the service that they receive from a specific

service provider (Donnelly and Dalrymple, 1996). However this model can help

to determine the quality of service provide by agent to the customer at Etiqa

Bandar Baru Klang. The quality of service can determine the customer

satisfaction by identify their service quality provided by agent to the customer.

This model can identify by the responsiveness agent to help the customer by

handling the problem arise by the customer and give accurate knowledge and

information, the physical facilities and also the system of insurance are suitable to

given the information about the customer requirements.


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equated with performance, it implies compensation or substitution

whereas performance denotes doing what was actually promised.

1.9.5 Customer satisfaction

Customer satisfaction can be experienced in a variety of situations and

connected to both goods and services. It is a highly personal estimation

that is greatly affected by customer expectations. Satisfaction also is based

on the customer’s experience of both contacts with the organization and

personal outcomes. It also can be defining satisfied customer within the

private sector as “one who receives significant added value”.

A customer may be satisfied with a product or service, an experience, a

purchase decision, a salesperson, store, service provider, or an attribute or

any of these. Customer satisfaction differs depending on the situation and

the product or service. Instead, they focus on the customer’s entire

experience with an organization or service contact and the detailed

assessment of that experience.

CHAPTER 2 LITERATURE

REVIEW


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CHAPTER 2:

Literature Review

2.1 CUSTOMER SATISFACTION

According to Hewlett-Packet (1992) ,defines customer satisfaction as a customer

who recommend the product that been used to other people especially their own

relatives, it also happened because of that exacting customer’s own practice in

using the product and recommending the product to others.

It was developed by Oliver (1997) said that the customer satisfaction is “the

consumer’s fulfillment response, the degree to which the level of fulfillment is

pleasant or unpleasant”. It can determine whether they satisfied the service with

friendly and respectful by the service provider.

According to Cardozo (1965) stated that; in maintaining a long term relationship

between the customer and the firm itself, it’s main to them to have this kind of

behavior from the customer. Beside that, they will build good environment and

also get the advantage from the long term relationship for continues make a sales

or business with customer.


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However, according to Murthy D. N. P.,. (2004) customer dissatisfaction can

guide to the customers switching to a competitor or the company losing latent

new customers due to negative word-of-mouth effect. The unpleasant or

unimpressive of the service, the customer have the good reason to switching other

competitor.

Kotler (2000) defines that “a person feeling of pleasure or disappointment

resulting from comparing a product’s perceived performance in relation to his or

her expectations”. However Hoyer and MacInnis (2001) said that, satisfaction can

be related with feelings of acceptance, happiness, relief, excitement, and delight.

Customer satisfaction generally means customer reaction to the state of

fulfillment, and customer judgment of the fulfilled state (Oliver, 1997). The main

factor determining customer satisfaction is the customers’ own perceptions of

service quality (Zeithamal & Bitner, 1996). In this study, we shall define service

quality as the customers’ satisfaction or dissatisfaction produced by their

experience of purchase and use of the service (Parasuraman, Zeithamal, & Berry,

1988).

Johnson and Fornell (1991) said that as a customer’s overall assessment of the

performance of a close by the date. In additional, as an overall evaluation that is

built up over time, satisfaction typically mediates the effects of product quality,


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service quality, and price or payment equity on loyalty (Bolton and Lemon (1999),

Fornell (1996). Oliver (1999) also said it also contains a significant affective

component, which is produced through repeated product or service usage.

Acoording to the Boulding (1993) influence the customer behaviors that help a

firm, such as optimistic word of mouth and repurchase. However, Verhoef (2003)

argues that longitudinal data that combine survey measures with subsequent

behavior should be used to launch a contributory relationship between perceptions

and behavior.

2.2 FACTORS THAT AFFECT CUSTOMER SATISFACTION

(Naoki Kano, 1984) has introduced a model; The Kano Model of Customer

(Consumer) Satisfaction classifies product attributes based on how they are

apparent by customers and their effect on customer satisfaction.

Figure 2.1: The Kano Model of Customer (Consumer) Satisfaction.


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According the model show that: The Kano Model of customer satisfaction divides

product attributes into three categories such as:

2.2.1 Threshold Attributes

Threshold (or basic) attributes are the probable attributes of a product and do not

provide an opportunity for product differentiation. Increasing the performance of

these attributes provides retreating returns in terms of customer satisfaction;

however the absence or poor performance of these attributes results in excessive

customer dissatisfaction.

2.2.2 Performance Attributes

Performance attributes are those for which more is generally better, and will

recover customer satisfaction. On the other hand, an absent or weak performance

element reduces customer satisfaction of the needs customers verbalize; most will

fall into the category of performance attributes. These attributes will form the

weighted needs against which product concepts will be evaluated. The price for

which customer is willing to pay for a product is directly tied to performance

attributes.


29

2.2.3 Excitement Attributes

Excitement attributes are unspoken and unexpected by customers but can result

in high levels of customer satisfaction, though their deficiency does not lead to

dissatisfaction.

Excitement attributes often satisfy real needs of which customers are presently

unaware. In a competitive marketplace where manufacturers’ products provide

similar performance, providing excitement attributes that address “unknown

needs” can supply a competitive benefit.

There are many factors that affect customer satisfaction. According to Hokanson

(1995), these factors include friendly employees, courteous employees,

knowledgeable employees, helpful employees, accuracy of billing, billing

timeliness, competitive pricing, service quality, good value, billing clarity and

quick service. Their customer’s needs and wants to achieve customer satisfaction

need to satisfy by the organization, (La Barbera and Mazursky, 1983). Refer to

Kotler (2000) “the form taken by human needs as they are shaped by culture and

individual personality”


30

2.3 IMPORTANCE OF CUSTOMER SATISFACTION

Importance of customer satisfaction because as a key reason for customer

defection or discontinuation of purchase will influences repurchase intentions

whereas dissatisfaction. La Barbera and Mazursky (1983).

Positive effect on an organization’s profitability came from the customer

satisfaction. According to Hoyer and Maclnnis (2001) “satisfied customers form

the foundation of any successful business as customer satisfaction leads to repeat

purchase, brand loyalty, and positive word of mouth” .

Clarke (2001) said that customer satisfaction is really no more than the price of

contact to a category. For satisfaction to be successful, it must be able to form

loyalty amongst customers. “There is increasing recognition that the ultimate

objective of customer satisfaction measurement should be customer loyalty”,

Sivadas and Baker-Prewitt (2000).

Quoted from McIlroy and Barnett (2000), an important concept to consider when

rising a customer loyalty programmed is customer satisfaction. Satisfaction is a

determine of how well a customer’s potential are met while customer loyalty is a

measure of how likely a customer is to repurchase. Loyalty is weak because even

if customers are satisfied with the service they will continue to defect if they


31

believe they can get better value, convenience or quality elsewhere. In other

words, we can have satisfaction without loyalty, but it is hard to have loyalty

without satisfaction.

Mark Smith (2004) said that humanizing customers' satisfaction with service is a

swiftly growing corporate preference and companies are increasing investment in

tracking customer satisfaction. While only few companies able to systematically

identify how to change service for the better service.

According to the John White (2000) in the article said that a good method to

establish whether our customers are satisfied with us has been to ask them.

Beside that, the business needs to guarantee that its employees have the skill and

motivation to create and continue customer loyalty and need to educate

employees to change their behavior, and show them which behaviors are

required training, developing and rewarding them for doing so.

2.4 QUALITY SERVICE

According to the Herfled (1999), In order for agents to be responsive to the pre-

sale, during-sale, and after-sale service needs of their local clients, agencies must

invest in training programs in which their agents are comfortable using the

technological resources made readily available to them. Agent training in


32

technology is important, because this same technology now makes it possible for

customers to purchase insurance through alternate delivery systems that may not

even require an agent.

The operationalization of customer outlook is probably another critical

difference between the two concepts. Potential that motivate customer

satisfaction are based on predictions of what is likely to happen during a

transaction while outlook that drive service quality evaluations are based on

customer desires and wants, and are motivated by what a consumer believes a

service provider should offer state by Parasuraman (1988).

The finding by Zeithaml (1996) found that respondents’ loyalty to the company

based on the service quality has a strong positive effect and a negative effect on

propensity to switch. It means that the service quality have the positive effect to

gain the loyalty from customer.

Lehtinen and Lehtinen (1982) suggested that service quality consists of the

equipment used (physical quality), the reputation of the company (corporate

quality), and the dealing between contact personnel and customers (interactive

quality) and it be state by Grönroos (1984) suggested that quality is a function of


33

what the customer actually gains (technical quality) and the way the service is

given (functional quality).

Quoted from Van Mannen and Schein (1979) state that; the authors’ suggestions

for humanizing organizational service performance may involve the need for

increased attempt at socialize new employees during the early training period.

According to the Wagner, Hollenbeck, Ashforth and Saks (1996) say that

organizational socialization has been characterized by a number of academic

scholars as basically the process by which employees learn, appreciate, and

internalize an organization’s goals, values, social knowledge, and expected

behaviors. Since so much has been discussed about the importance of service

quality and the need to improve on it, a re-examination of how that increase has

been measured is in order.

According to Parasuraman (1985, 1988), say that service quality has been

assessed, measured and perceived in various forms by several noted marketing

scholars.

High levels of service quality should result in highly satisfied consumers’ state

by Spreng and Singh (1993), it means the service to the customer must be very


34

well to increase the customer satisfaction and fulfill the desires and needs of

customer. In this intelligence, assessments of satisfaction are a useful “finishing

check” on the quality delivery process. Though, a service quality approach such

as SERVQUAL can assist in the improvement of quality delivery to help

guarantee that the finishing check indicates satisfied rather than dissatisfied

claimants.

Donnelly (1995) said these pressures arise internally from an actual desire to

improve quality of services provided to communities, others are imposed through

corporate initiatives like customer charters or through and increase in consumer

activism. A customer’s satisfaction with individual service encounters will affect

the customer’s satisfaction or dissatisfaction with the generally service

experience (Johnston, 1994).

Lewis and Booms (1983) said that “service quality is a measure of how well the

service level delivered matches customer expectations delivering quality service

means in compliance to customer expectations on a steady basis”. But Zeithaml

(1981) said that the firm may find difficult to understand how consumers identify

their services and estimate service quality because most services cannot be

counted, measured, inventoried, tested, and established in advance of sale assure

quality.


35

Service quality theory (Oliver, 1980) predicts that if performance does not meet

their hope and quality increases as performance exceeds expectations so the

clients will critic the quality is low. For this reason, customers’ expectations

provide as the foundation on which service quality will be evaluated or judge by

customers and as service quality increases, satisfaction with the service and

intentions to recycle the service increase.

Quality and customer service have been recognized as serious designed issues in

the 1990’s for both public and private sector organizations (Donnelly,

Wisniewski, Dalrymple and Curry, 1995).

Parasuraman (1994) and Zeithaml (2000) suggested that customer satisfaction

was a function of the difference between what they had predictable to get from

the service and what them visible about the service that they had actually

expected.

A latest study by Zeithaml (2000) is known several aspects of the relationship

between perceived service quality and profitability. The study confirmed the

linkages between service quality and customer satisfaction, and between service

quality and loyalty and on the 1993 Zeithaml state that, these expectations came

from word-of-mouth promotion about the service that a customer has heard, past

experience, the promises prepared about the service by its advertisements and by

its sales representatives.


36

Parasuraman (1991) planned the ‘SERVQUAL’ scale, which consisted of the

five dimensions of reliability, responsiveness, assurance, empathy and tangibility

to estimate the gap between customers’ expectations of service and their

perceptions of the actual service delivered.

There was an "increasing awareness of the importance of service, customer

operations, and customer contact" (Johnston, 1999). Service quality has been

shown to have a direct relationship to company performance.

It may be useful to describe what constitutes poor service quality. Parasuraman

(1985) said that the list problems with service delivery and define all of these

problems as differences or gaps. “First, there is a gap between what the customer

wants and what service providers think the customer wants. Second, there are

problems translating the expectations of the customer into the design of the

service. Third, the design of service systems does not always direct to the

delivery of the service as designed. Finally, there is the problem of promising

more than the service provides”.

Juran (1992) defined quality as fitness for use and Gronroos (1984) defined

service quality as being a judgment the customer makes when he compares his

outlook to the perception of the service he has just established which is related

definition by Parasuraman (1985) define service quality as the point to which the

service meets or exceeds customer expectations.


37

2.5 INSURANCE

According to the Bank Negara Malaysia, dialogue session with insurers and

Takaful Operators say that; the meeting was also updated on other anti fraud

initiatives jointly undertaken by Bank Negara Malaysia and the insurance and

Takaful industries. Cooperation with law enforcement agencies and relevant

trade associations was added improved during the year through regular dialogue,

the sharing of information systems and exchange of experiences in struggle fraud.

Such initiatives are ultimately aimed at putting in place effective mechanisms

and the necessary infrastructure to support efforts to combat insurance fraud that

result in losses to the industry, which if left unchecked, could unfavorably impact

the premium rates borne by consumers.

According to the Bank Negara Malaysia, Dialogue with Insurers and Takaful

Operators (2002) state that; highlighted the importance of responsible behavior

by insurers and Takaful operators as well as their agents in their contact with

customers. The dialogue also discussed on various initiatives to further

strengthen the resilience of the industry, moving onward.

According to the Bank Negara Malaysia (2003),state that; insurance agents

remain an important intermediary in the general insurance sector to offer

personalized service for the convenience of policy owners as well as value-added


38

services such as advice on insurance products and in providing assistance in

claims handling. Customers have the option to use the services of agents to meet

their insurance requirements and insurance products it also include financial

advisory to their clients. Becoming a financial advisor is an important potential

area that has wonderful growth opportunities.

Quoted from Datuk Chor Chee Heung, (2009) by the star mail state that; Many

Malaysians will continue to attach with their motor insurance agents if the

services rendered are outstanding. According to insurance department by the

American Mutual of Illinois, Andrew M. Haley of Chicago and Joseph J. Haley

(2010) on the Midwest news by the insurance journal. “Specifically, the agents

and company unsuccessful to inform the service members that they were

purchasing life insurance and misrepresented the life insurance as a savings

plan”.

CHAPTER 3 RESEARCH

METHODOLOGY


39

CHAPTER 3:

RESEARCH METHODOLOGY

3.1 INTRODUCTION

Research methodology and design explains the way on how the researcher

gathers data and information while conducting the research. It is an important

stage in research process because this stage will give the researcher the ideas and

assumptions to clarify the objectives, problem statements and research questions.

In this research, the researcher will use one method of gathering data, which is

primary data and Data can be obtained from the primary or secondary sources.

Primary data refer to information obtained first hand by the researcher on the

variable of interest for the specific purpose of the study. Secondary data refer to

information gathered from sources already existing (Sekaran, 2007).

3.2 Research Design

This research is conducted as a descriptive study. As stated by Sekaran (2007) it

is undertaken in order to ascertain and be able to describe the characteristics of

the variables of interest in a situation. Descriptive study are undertaken in

organization to learn about and describe the characteristic of a group of

employees, as for example, the age, educational level, job status, and length of


40

service working in the system. The goal of a descriptive study is to offer to the

researcher a profile or to describe important aspects of the phenomena of interest

from an individual, organizational, industry-oriented, or other perspective.

3.2.1 Population

In this research, the researcher would like to determine the factors that will

influence the customer’s level of satisfaction when in their course of employment

as scope of the research is at Etiqa Insurance & Takaful Bandar Baru Klang

Branch. Etiqa Insurance & Takaful is a suitable area to distribute the

questionnaires and gather relevant data as this area mostly consist of customer

which comes from different background. Thus it is easier for me to get as various

point of view or opinion.

3.2.2 Time frame

This research conducted from July 2010 until October 2010 which determined the

period to conducted the research, during this period the researcher gather the

information to be analyzed and interpret in the research in order to achieve the

research objectives.


41

3.3 Sampling

According to Sekaran (2003), sampling been used for the purpose of selecting a

sufficient number and elements from the population, so that a study of a sample

and understanding for its properties and characteristic to the population elements.

The way in which samples are taken will determine the rightness of the survey

results and its generality. In this research, probability sampling will be used in

order to collect data from the targeted population and sample size.

3.3.1 Sampling technique

The sampling technique is going to be decided by the researcher is the non

probability with the convenience sampling. Malholtra (2003) stated that

convenience sampling is a non probability sampling technique that attempts to

obtain a sample of convenient elements and he further explain that the sampling

units are accessible, easy to measure and cooperative.

3.3.2 Sample size

The number of elements to be included in this study is called as a sample size.

The sample size will be calculating, the most appropriate sample must be

determined as sample size increases. When the sample is too large they might be

lead to inefficiencies and wastage of resources and when the sample be too small

they might yield information or not valid for making inferences about the


42

population. The researcher must create a balance between cost and the sample

size that will enable them to make reasonably correct and exactly generalizations

(Malhorta, 2004). The sampling size would be 50 customers or respondents from

the population of 1000 customers, taken at the Etiqa Bandar Baru Klang Branch.

The selected 50 customers is the sample for the research.

3.4 Data Collection Method

In order to get all data needed to conducts the research need to used and utilized

both primary data and secondary data to collect, gather and obtain information in

terms of primary data by using the questionnaire. Despite the fact that will collect

the primary data through questionnaire, it also needs to sort out other secondary

information so that the statement and report are accurate at the time being. This

research also been used various secondary data including searching information

on the internet, journals and book. Previous journals and articles that had been

done and published is one of the most important information that can used to

construct the literature review and used the data as an evidence to support ideas,

theories and finding in the study. Several reference text from the magazines,

articles and newspaper which contains relevant information also used as a guide

in completing this research.


43

3.4.1 Primary data

Apart from the individuals who provide information when interviewed,

administered questionnaires, or observed. Primary data can be examined

by four main primary sources of data such as individuals, focus group,

panels and unobtrusive methods. By the way in this research uses of

primary data is limited. This research is more focuses on the secondary

data.

i. Questionnaire

The researcher will provide a selection of question which will be distribute

among the customer, later the questionnaire will be collected after the

customer have done answering it, as a result, the researcher has obtain the

information from the questionnaire. In this research, the questionnaire

comprises of 7 sections. Section A for demographic factors, Section B-F

for independent variable and Section G for dependent variable.

Section A

This section will focuses on demographic factors and the personal data of

each respondent will highlight on the questionnaire. It be speared by

categorized as gender, age, marital status, number of children, range of

income, highest completed level of education, number of years became an


44

customers. The nominal scale will be used in this questionnaire which

provides the respondents to choose the answer.

Section B

In this section, the questions on quality of service provide by agents at

Etiqa Insurance & Takaful will issue. The Likert scale is designed to

examine how strongly subject agree and disagree with statements on a 5-

point scale. In this section the independent variable will be test for quality

service such as tangible which identifies the equipment and comfortable

places to given the information.

Section C

In section C, The Likert scale is designed to examine how strongly subject

agree and disagree with statements on a 5-point scale. The questions on

quality of service provide by agent at Etiqa Insurance & Takaful will issue

on the independent variable will be test for quality service such as

reliability which provide the services at the time agent promise to the

customer.

Section D

In this section, the questions on quality service will be test for

responsiveness which determines the willingness to help the customers.


45

The Likert scale is designed to examine how strongly subject agree and

disagree with statements on a 5-point scale.

Section E

The Likert scale is designed to examine how strongly subject agree and

disagree with statements on a 5-point scale. Meanwhile, section E will be

subjected to the questions on quality service on the assurance which

determines the competence of the system and its security, credibility and

courtesy.

Section F

The question in section F is designed to determine the ease of access,

approachability and effort taken to understand customers’ requirements.

This section also will use the Likert scale.

Section G

This section will be subjected to the level of customer satisfaction towards

agent by the service provided to the customer and the Likert scale is used

to answering the questionnaires. In this section the dependent variable will

be test in this section.


46

ii. Secondary data

Secondary data are indispensable for most organizational research.

Secondary data refer to information gathered by someone other than

researcher conducting the current study. Data can be internal or external to

the organizational and accessed through the Internet or published

information. There are several sources of secondary data, including books

and periodicals, government publications of economic indicators, census

data. The advantage of seeking secondary data source is saving in time

and costs of acquiring information. However, secondary data as the sole

source of information has the drawback of become obsolete and not

meeting the specific needs of particular situation or setting. Hence, it is

important to refer to sources that offer current and up-to-date information.

• Internal sources

The researcher gathers information from the Etiqa Insurance & Takaful

Berhad through the information sources.

• External sources

Media

The sources collected in an article from newspaper, magazine,

books and others.


47

Journal/magazine/newspaper/textbooks

This is the main source from market research and academic

periodical.

E.g.; journal, book, previous theses and past research papers.

Online electronic database from website

From the internet, information can be taken from the articles or e-

journal published by other people and it the information from the

internet is very important to furnish this research. Beside that we

also can gather the information through website Universiti

Teknologi Mara (UiTM).

3.5 Data Analysis

When the data are obtained by the questionnaire, they need been analyze, edit and

access the data using the statistical computer programmed which is a SPSS. The

data or information will be coded using a standard software packages for data

analysis resulting from the research that been done. The SPSS software package

version 14 will be used for the purpose of data analysis.


48

3.5.1 Procedures of Data Analysis

From the survey, 50 customers will be selected as respondent. The SPSS

will be use in analyzing data from the question or raw data. In order to

determined the relationship between the dependent variable and

independent variable, and descriptive statistics analysis are use to identify

the level of customer satisfaction and service quality towards agent.

3.5.2 Frequency Distribution

The frequency will shows exact figures on the questionnaire that been

given to the respondent on gender, age, marital status, number of children,

range of income, highest completed level of education, number of years

became an customer at Etiqa Insurance & Takaful.

3.5.3 Descriptive Statistic

As mentioned earlier, the researcher is using the descriptive statistic to

identify the level of customer satisfaction and also the rank of the service

quality in identifying the most influential factors in the service quality by

the agent at Etiqa Insurance & Takaful.

CHAPTER 4 FINDING &ANAYLSIS


49

CHAPTER 4:

FINDINGS AND ANALYSIS

4.1 INTRODUCTION

This fourth chapter will focus on the findings of the research and represents the

finding and analysis on a study of customer satisfaction towards agents at Etiqa

Bandar Baru Klang. All the findings are based on the answer given by the

respondents through questionnaire. The respondents are customer of at Etiqa

Bandar Baru Klang. The information obtained will help to achieve of the

objective on the research conducted.

4.2 REALIBILITY

Reliability Statistics

Cronbach's Alpha N of Items

.954 20

Table 4.1: Realibility Statistic

Cronbach’s alpha is a reliability coefficient that indicates how well the items in a

set are positively correlated to one another. An Uma Sekaran (2003) state that

reliabilities less than 0.60 are considered to be poor, those in range 0.70 are


50

acceptable and those are over 0.80 is good. According to the above results, it

clearly indicates that Cronbach’s alpha for the 20-item is 0.954. Thus, internally

consistency reliability of the measures used in this study can be considered

acceptable and good.

4.3 RESPONDENTS` PROFILE ANALYSIS

4.3.1 Gender

Figure 4.2: Frequency of Respondent by Gender

Figure 4.2 shows the distribution of respondents based on gender. Table 2

found that the highest is female which the percentages are 62% for 31

respondents.


51

4.3.2 Race

Figure 4.3: Frequency of Respondent by Race

According to the Figure 4.3, the majority of the respondents are Malay

(82%), followed by Chinese (12%) and Indian (6%).


52

4.3.3 Age

AGE

Frequency Percent Valid 20-30 YEARS OLD 13 26 31-40 YEARS OLD 23 46 41-50 YEARS OLD 11 22 50 ABOVE 3 6 Total 50 100

Figure 4.4: Frequency of Respondent by Age

Figure 4.4 show the frequency of respondent by age out of 50 respondents,

23 respondents or 46% are aged 31-40 years old. This range of age

represents the majority of respondents which participated in this research.

The second highest is respondents aged under 20-30 years old which is

26% or 13 respondents and the third highest is repondents aged between

41-50 years old which is 11 respondents or 22% of the repondents. The

lowest is respondent aged under 50 above which is 3 respondents or 6% of

the total number of respondents.


53

4.3.4 Income

Figure 4.5: Frequency of Respondent by Income

From Figure 4.5 , the highest percentage of income level are 52% (26) of

the respondents earned from RM1000 to RM3000, while the lowest

percentages of income level are 4% (2) of the respondents earned from

RM5001 and above.

4.3.5 Status


54

Figure 4.6: Frequency of Respondent by Status

Figure 4.6 shows the distribution of respondents based on marital status.

The highest frequencies are married, 33 respondents while the lowest

frequencies are single, shows 16 respondents and widowed 1 respondent.

4.3.6 Level of Education

EDUCATION Frequency Percent Valid SPM/STPM 16 32 MATRICULATION/FOUNDATION 3 6 /CERTIFICATE DIPLOMA 18 36 BACHELOR/ DEGREE 11 22 MASTER & ABOVE 2 4 Total 50 100

Table 4.2: Frequency of Respondent by Education

According to the table 4.2, it was found that the highest percentages are

36% (18) of the respondents possessed a Diploma, while 4% (2) of the

respondents possessed a Master are the lowest.

4.3.7 Years becomes a Customer


55

Figure 4.7: Frequency of Respondent by became a Customer

Figure 4.7 showed the frequency distribution of number becames a

customer each repondents at Etiqa Bandar Baru Klang. From the table

above, we can see the repondents be a customer in Etiqa for more than 4

years is the highest frequency.This group consists 26 respondents or 52%

out of total number of 50 repondents and the second highest is respondents

less than 3 years which is 32% or 16 repondents. The lowest with 2

repondents and 4% of the total respondents are respondents that became as

a customer more than 10 years.


56

4.4 Descriptive Analysis

NO MEAN LEVEL

1 1.00-2.33 LOW

2 2.34-3.67 MEDIUM

3 3.67-5.00 HIGH

Table 4.3: Rule of Thumb

4.4.1 To determine the level of customer satisfaction towards agent at Etiqa

Bandar Baru Klang.

Descriptive Statistics N Minimum Maximum Mean Std.

Deviation CUSTOMER SATISFACTION

50 1.00 5.00 3.4800 .81416

Valid N (listwise) 50

Table 4.4: Level of customer satisfaction towards agent at Etiqa Bandar

Baru Klang.

Table 4.4 show the data descriptive statistic for overall customer

satisfaction. Generally the customer satisfaction towards agent at Etiqa in

the medium level with the value mean 3.4800.


57

4.5 Descriptive Statistics

4.5.1 To determine the level of service quality towards agent at Etiqa Bandar

Baru Klang

Descriptive Statistics Mean Rank Tangibles 3.12 5 Reliability 3.375 3 Responsiveness 3.555 1

Assurance 3.4867 2

Empathy 3.34 4

Table 4.5 : Mean & Std. Deviation for Dependent Variable.

Figure 4.8: Mean of Five Dimension for Customer Satisfaction


58

Figure 4.6.1 show the mean of Five Dimension for Customer Satisfaction

with the highest mean is 3.55 which is Responsiveness, followed by

Assurance with mean value of 3.48, Reliability with mean 3.37, Empathy

with the mean value 3.34 and the lowest mean with mean value of 3.12.

The highest factor that leads to the customer satisfaction is

Responsiveness Dimension,Assurance Dimension and Reliability

Dimension.


59

4.7 Regression

4.7.1 To determine the most factor that influence the customer satisfaction

Coefficientsa Model Unstandardized

Coefficients Standardized Coefficients

t Sig.

B Std. Error

Beta

1 (Constant) 0.001 0.351 0.004 0.997

Tangible 0.032 0.123 0.027 0.26 0.796Reliability 0.388 0.127 0.384 3.053 0.004Responsiveness 0.168 0.148 0.164 1.136 0.262

Assurance 0.183 0.121 0.197 1.518 0.136Empathy 0.253 0.136 0.239 1.861 0.069

2 (Constant) 0.047 0.301 0.157 0.876

Reliability 0.397 0.12 0.394 3.304 0.002Responsiveness 0.167 0.147 0.163 1.139 0.261Assurance 0.173 0.113 0.186 1.53 0.133Empathy 0.271 0.115 0.256 2.352 0.023

3 (Constant) 0.112 0.297 0.377 0.708

Reliability 0.471 0.102 0.467 4.624 0 Assurance 0.247 0.093 0.266 2.659 0.011Empathy 0.278 0.116 0.263 2.407 0.02

a. Dependent Variable: mean_G1

Table 4.6: Coefficients (a) Factor That Influence the Customer Satisfaction

From the table 4.6, it is to find which factor that most influence customer

satisfaction based on service quality. Customer satisfaction is a dependent variable

meanwhile tangibles, reliability, responsiveness, assurance and empathy which are


60

independent variable. Based on table 10, there are three Model which are Model 1,

Model 2 and model 3, in model 1 show all the independent variable but in Model 2

and Model 3, tangible and responsiveness have been rejected.

Model 3 show three independent variable not been rejected which are realibility,

assurance and empathy. It show that this realibility variable is significance at level

0, assurance at the level 0.011 and empathy 0.02 meawnwhile there are

significance because the level of significance is below than 0.05.

CHAPTER 5 CONCLUSION

& RECOMMENDATION


61

CHAPTER 5:

Conclusion And Recommendations

5.1 Introduction

This chapter may represent the recommendation and conclusion for a study on

customer satisfaction towards agents in Etiqa Insurance & Takaful. The

researcher has used SPSS version 16.0 to analyze the data and to find the result on

the on customer satisfaction towards agents in Etiqa Insurance & Takaful as show

in the chapter four.

This conclusion section becomes the focus point to propose recommendation for

improvement on customer satisfaction towards agent at Etiqa Bandar Baru Klang.

5.2 Conclusion

This chapter present the conclusion of the study based on research objective and

answer the objectives and will follow by the recommendations for future research

and improve the service. From this research, there are 3 objectives that need to be

achieved. The first objective was to identify the level of customer satisfaction

toward service provided by agent at Etiqa. The second objective is to identify the

level of service quality provided by agent at Etiqa and to identify the most factors

that influence the customer satisfaction towards services provided by Etiqa.

Nowadays, the successful of the organization or insurance company not depend

on the sales, production, profit or members of the company but it’s depending on


62

the customer satisfaction. Customer is an asset of company so the top

management, staff and especially agent should take initiative to know more about

their customer needs and wants. This will ensure the customer loyalty with the

company and feel more appreciated and important in the company.

As conclusion, this research found that customer is satisfied with the services

provided by agent and most of the respondent are neither satisfied with the agent

of Etiqa but the service still need improvement to get the highly satisfaction of

customer. By determine the level of customer satisfaction it would make the

company improve their service and can emphasize more on the attributes that

contributes to high customer satisfaction.

According to the research objective 1, the result of this research shows that the

levels of customer satisfaction are in the medium level by using the descriptive

analysis and based by the rule of thumb. It means that the first objectives was

answered where the level of customer satisfaction are in the medium level which

should be improve the service of agent in the Etiqa so that their can achieve high

level of the customer satisfaction. The researcher suggested that Etiqa also can

provide training to enrich the knowledge of the agent so that they will have

enough knowledge and good service compared other insurance companies.

Second research objective 2, based on table 9 in the chapter 4 show the level of

service quality towards customer satisfaction is Responsiveness

Dimension,Assurance Dimension and Reliability Dimension. The performance


63

factor includes tangible, reliability, responsiveness, assurance and empathy which

in the medium level and the factor of tangible and empathy need to be improve. It

means Etiqa customer is satisfied with the service quality of the agent in the Etiqa.

Thus, customers are expected to receive the good services and modern looking

equipment.

Third research objectives, is to identify the most factors that influence the

customer satisfaction towards services provided by Etiqa which is the realibility,

assurance and empathy. Based on table 10 the most factor are realibility,

assurance and empathy that not been rejected. Its means that the factor of the

tangible and responsiveness need to be improve. It means agent of Etiqa is not

providing good service in the independent of responsiveness and tangible

whichmean Etiqa have problem in handling the customers and providing physical

facilities.


64

5.3 Recommendations

Based on the results, we can conclude that although most of the respondents are

satisfied with their agent Etiqa Insurance & Takaful provide you with the best

facility, services. The organization or agents need to be aware that the satisfaction

of the customer always changing due to their level of expectations. For this reason,

some recommendations have been highlighted for agents and organizations to

maintain the customer satisfaction and also to improve the service of the agent at

Etiqa Bandar Baru Klang.

5.3.1 Communicate with customer

The finding on table 9 shows that empathy dimension mean value is 3.34

which are the second lowest than others. It means the agent of Etiqa has a

problem communicate with the customer, therefore their need to improve

the communication skills. Their need to communicate more with their

customer because this will help agent at Etiqa understand the customer

specific needs of the product and can help them to choose the suitable

product that suit with their needs. In the same time they can build long

term relationship with customer and will enhance the Etiqa image and

reputation.


65

5.3.2 Improve the physical facilities and tools or equipment

The tangible dimension mean value is the lowest than other show on table

9. It means that the agent of Etiqa and company need to improve their

physical facilities which make the agency has a modern looking

equipment and comfortable place to give the information. The researcher

also recommends providing the pamphlet or brochures to the customer and

more convenience environment for further information.

5.3.3 Overcome the weakness

Based on the research, tangibles and responsiveness are fewer factors that

influence customer satisfaction, so that the agents at Etiqa should

overcome the weakness and take action because the level of customer

satisfaction will increase if the overcome it. To overcome the

responsiveness weakness, should improve their performance with give

intensive training because it will make agent at Etiqa become more

effective and efficient. In the same time Etiqa can gain customer loyalty

and also good perception to the Etiqa. By that, Etiqa should always give

training to the agents about customer service by giving the information on

how to make a better way of friendly with customer and can facing the

complaint or problem from the customer in efficiently.

Etiqa should also make sure the agent have improved their knowledge and

good interaction skill by giving them training. Beside that Etiqa agent


66

need should improve their environment facilities because this is important

elements that attract Etiqa customer more comfortable.

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67

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APPENDIX I

Dear Sir/ Madam/ Miss:

As part of the course requirement for BBA from University Technology Mara (UiTM), I am conducting a research regarding:

“CUSTOMER SATISFACTION TOWARDS AGENT AT ETIQA BANDAR BARU KLANG”

All the information that has been collected will strictly confidential and will be used for academic purpose only. The precision of this study would depend on the response and feed back from the respondents.

The questionnaire consists of seven sections. Please complete all the section given.

Thank you very much for your time and cooperation.

Sincerely,

…………………………………..

(Norjan Binti Saleem)


UiTM kampus Bandaraya Melaka

SECTION A (DEMOGRAPHIC)

PLEASE TICK (√) FOR THE ANSWER.

1) Gender Male Female 2) Race Malay Indian Chinese Other __________ 3) Age 20 – 30 years old 31- 40 years old 41 – 50 years old 50 above

4) Income per month Less than RM1000 RM1000 – RM3000 RM3001 – RM5000 RM5001 above 5) Marital Status Single Married

Widowed

6) Your level of education

SPM/ STPM

Matriculation/Foundation/Certificate

Diploma

Bachelor/Degree

Master & above

8) Number of years becomes a customer 0 – 3years 4 – 6years

7 – 10years 10 years above

SECTION B: (TANGIBLES)

PLEASE CIRCLE (Ο) FOR THE ANSWER. 1 – Strongly disagree 2 – Disagree 3 – Moderate 4 – Agree 5 – Strongly agree

Strongly

disagree Disagree Moderate Agree Strongly

agree The agency has modern looking equipment and comfortable place to give the information.

1 2 3 4 5

The agent provides pamphlet or brochures to the customer for the further information.

1 2 3 4 5

Materials provided such as pamphlet, statements, brochures are associated with the service provided.

1 2 3 4 5

SECTION C: (RELIABILITY)


Strongly

disagree Disagree

Moderate Agree Strongly agree

When the agent promise to do something by a certain time they will do so.

1 2 3 4 5

When a customer has a problem, the agent will show a sincere interest in solving it.

1 2 3 4 5

Agent will provide their services at the time they promise to do so.

1 2 3 4 5

Have an incentive to help in order to solve your problem.

1 2 3 4 5

SECTION D: (RESPONSIVENESS)


Strongly disagree

Disagree Moderate Agree Strongly agree

The personnel in the agency/branch and agent tell you exactly when services will be performed.

1 2 3 4 5

Agents give promptly service to your requirement.

1 2 3 4 5

Agents are always willing to help you.

1 2 3 4 5

The whole procedure will be smoothly if you provide all the information that insurer requires.

1 2 3 4 5

SECTION E: (ASSURANCE)


Strongly disagree


You feel safe and comfortable in your dealings with the agent.

1 2 3 4 5

Agents have the knowledge to answer your questions.

1 2 3 4 5

Agents are consistently courteous when dealing with you.

1 2 3 4 5

SECTION F: (EMPATHY)


Strongly disagree


Agent has understood your specific needs of the product.

1 2 3 4 5

Help you to choose insurance policies that suit their needs.

1 2 3 4 5

Many efforts taken by the agent to understand the customer’s requirements.

1 2 3 4 5

SECTION G: (CUSTOMER SATISFACTION)

PLEASE CIRCLE (Ο) FOR THE ANSWER. 1 – Strongly dissatisfied 2 – Dissatisfied 3 – Neither satisfied nor dissatisfied 4 – Satisfied 5 – Strongly satisfied

Strongly

disagree Disagree Moderate Agree Strongly

agree How you satisfied were you with the quality of service by the agent?

1 2 3 4 5

Are you satisfied with your current agent at Etiqa Insurance & Takaful

1 2 3 4 5

Agent Etiqa Insurance & Takaful provide you with the best facility, services and remuneration as compared to other agent companies.

1 2 3 4 5

“Thank you for your support and cooperation”

APPENDIX II

Reliability Statistics

Cronbach's

Alpha N of Items

.954 20

Frequency Table

GENDER

Frequency Percent Valid Percent

Cumulative Percent

Valid MALE 19 38.0 38.0 38.0

FEMALE 31 62.0 62.0 100.0

Total 50 100.0 100.0

RACE


Cumulative Percent

Valid MALAY 41 82.0 82.0 82.0

INDIAN 3 6.0 6.0 88.0

CHINESE 6 12.0 12.0 100.0

Total 50 100.0 100.0

AGE


Cumulative Percent

Valid 20-30 YEARS OLD 13 26.0 26.0 26.0

31-40 YEARS OLD 23 46.0 46.0 72.0

41-50 YEARS OLD 11 22.0 22.0 94.0

50 ABOVE 3 6.0 6.0 100.0

Total 50 100.0 100.0

INCOME


Cumulative Percent

Valid LESS THAN RM1000 4 8.0 8.0 8.0

RM1000-RM3000 26 52.0 52.0 60.0

RM3001-RM5000 18 36.0 36.0 96.0

RM5001 ABOVE 2 4.0 4.0 100.0

Total 50 100.0 100.0

STATUS


Cumulative Percent

Valid SINGLE 16 32.0 32.0 32.0

MARRIED 33 66.0 66.0 98.0

WIDOWED 1 2.0 2.0 100.0

Total 50 100.0 100.0

EDUCATION


Cumulative Percent

Valid SPM/STPM 16 32.0 32.0 32.0

MATRICULATION/FOUNDATION/CERTIFICATE 3 6.0 6.0 38.0

DIPLOMA 18 36.0 36.0 74.0

BACHELOR/ DEGREE 11 22.0 22.0 96.0

MASTER & ABOVE 2 4.0 4.0 100.0

Total 50 100.0 100.0

YEARS BECOMES CUSTOMER


Cumulative Percent

Valid 0-3 YEARS 16 32.0 32.0 32.0

4-6 YEARS 26 52.0 52.0 84.0

7-10 YEARS 6 12.0 12.0 96.0

10 YEARS 2 4.0 4.0 100.0

Total 50 100.0 100.0

Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

CUSTOMER SATISFACTION 50 1.00 5.00 3.4800 .81416

Valid N (listwise) 50

Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

Tangible 50 2.00 5.00 3.1200 .60519 Reliability 50 1.25 5.00 3.3750 .71651 Responsiveness 50 2.25 5.00 3.5550 .70582 Assurance 50 2.00 5.00 3.4867 .77726 Empathy 50 2.00 5.00 3.3400 .68177 Valid N (listwise) 50

Coefficientsa

Model

Unstandardized Coefficients

Standardized

Coefficients

t Sig. B Std. Error Beta

1 (Constant) .001 .351 .004 .997

Tangible .032 .123 .027 .260 .796

Reliability .388 .127 .384 3.053 .004

Responsiveness .168 .148 .164 1.136 .262

Assurance .183 .121 .197 1.518 .136

Empathy .253 .136 .239 1.861 .069

2 (Constant) .047 .301 .157 .876

Reliability .397 .120 .394 3.304 .002

Responsiveness .167 .147 .163 1.139 .261

Assurance .173 .113 .186 1.530 .133

Empathy .271 .115 .256 2.352 .023

3 (Constant) .112 .297 .377 .708

Reliability .471 .102 .467 4.624 .000

Assurance .247 .093 .266 2.659 .011

Empathy .278 .116 .263 2.407 .020

a. Dependent Variable: Customer satisfaction

norjan binti saleem

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