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Chapter 1

THE PROBLEM AND ITS BACKGROUND

Introduction

Until the last decade, the Philippines is known to enjoy buying and/or selling pre-

loved vehicles. In a developing country like the Philippines,

many Filipino employees’ lifelong dream and a status symbol of a higher economic

scale is owning a brand new car. As happy owners move up the scale of lower middle-

class to upper middle class, one is happy to be able to purchase a 10 or 13 year old car

without its insurance in place.

It is no surprise that second-hand cars sold within its insurance age are sold with

a much-higher value than older cars that have seen the maturity of its insurance policy.

In recent years however, the car manufacturing industry have turned for the good

and started lowering car prices as the need surges. Car makers started answering to

the middle class workers transportation needs by manufacturing compact cars that are

smart to drive within the city. They are small and fuel-efficient enough, to be used by

one or two persons going to and from the office. The purchase of a brand new car has

become more economically sound than buying a second-hand car that does not come

with insurance and comes with recurring engine problems due to years of wear and

tear.

All car owners in the Philippines have knowledge on the necessity of having a car

insurance. Here is an excerpt from Section 389, Chapter VI of the Insurance Code of

the Philippines:
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“The Land Transportation Office shall not allow the registration or

renewal of registration of any vehicle without first requiring from the land
transportation operator or motor vehicle owner concerned the presentation
and filing of a substantiating documentation in a form approved by the
Commissioner evidencing that the policy of insurance or guaranty in cash
or surety bond required by this chapter is in effect.”

As stated above, before one can register their vehicle, or renew the registration

of their vehicle with the Land Transportation Office, having car insurance is mandatory.

In the Philippines, the most basic type of car insurance that you can have is Compulsory

Third Party Liability insurance or CTPL. This covers the bare minimum requirements set

upon by law.

Insurance companies have the dual challenge of driving more satisfying

relationships and connections with customers, while balancing their need to make the

business-critical decisions that impact their survival.

After sales service refers to various processes which make sure customers are

satisfied with the products and services of the organization. After-sales service is one of

the most deliberated facets of the Indian automobile industry. Urban customers, with

increasing regularity, are demanding an improvement in services offered by car

manufacturers. Companies themselves are aware of this changing trend, with a

consumers' loyalty proportionate to the quality of after-sales service.

A 2012 report by Frost & Sullivan on customer insights, stated that over 60 per

cent of customers held the importance of after-sales service in high regard. Along with

cost of the vehicle, quality and fuel efficiency, prospective car buyers rated service as

one of the biggest lures towards a particular brand.

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As the after-sales car service situation in India leaves a lot to be desired,

customers are shifting towards independent service centers. Based on a recent report

on passenger vehicle service trends in the country, 57 percent of customers shift to

local service stations once their free-service period with the manufacturer ends. Only 39

per cent head back to the authorized service station. These local stations also include

independent service contractors such as; Mahindra First Choice, My TVS, Castrol

Pitstop etc.

A majority of revenue comes from after-sales service and the sale of spare parts.

Therefore, when customers shift towards local stations, these automobile companies

are faced with loses. On average, each company services only 40 per cent of its original

customer base. Manufacturers in India are taking various steps to ensure they retain

customers with the on-going growth of independent stations.

Based on the recent reports, bank salesin the branch where the researcher is

working have not reached its quota for the number of clients and the retention rate.

Number of Renewals dropped more than 60-80%. Also, based on the concerns and

complaints received by the researcher, being a Branch Officer, it’s not just the retention

rates that the company is struggling but also the customer satisfaction towards the

service that the insurance company provides. No specific documentation, complaints

procedures or even monitoring systems followed in the company. In view of the

foregoing facts and reports, the researcher believed that conducting this study is

significant not just for the clients but more importantly for the insurance companies.
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Background of Study

Car insurance is just as important as a healthcare shield. It offers peace of mind

in cases of emergency and other unforeseen events. Just like a healthcard that assures

to help people whenever they need it, a car insurance lessens the anxiety when the

hard-earned vehicle meets a mishap.

Different countries enjoy varying benefits to car insurance policies. In the US for

example, some policies state that uninsured motorist coverage still enjoys a partial

coverage. However, the US is a first-world country. In countries like India, Indonesia

and the Philippines, environmental coverage remains at a stable 5% while Thailand is at

a strong 10% stable rate according to the Marsh Asia Insurance Report 2016.

The global insurance industry has been a growing and thriving business,

especially in the western and developed nations that have dominated the trade for a

very long time, including the United States, Japan, and some European countries. The

United States alone accounted for 27% of the world’s global insurance premium, Japan

for 11%, and China and some European countries largely dominated the remainder.

The Group of Seven (G7) nations account for more than 65% of the global insurance

premium with only 10% of the world’s population living in those regions. In these

economies, the per capita expenditure on insurance premium is $3,910 while people in

emerging markets like Africa spend an average $120 per person (KPMG 2012, OECD

2015, Rorbye 2013, Re 2015).

The Philippine automotive manufacturing industry covers the assembly,

importation/distribution, rebuilding of motor vehicles, and the manufacturing of

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automotive parts and components. It consists of highly diverse sectors such as metal,

electrical, plastic, rubber, and composite materials. It is also characterized by

heterogeneous firms with a few large, foreign-owned and modern firms (Toyota,

Mitsubishi, Honda, Nissan and Isuzu) operating side by side with many small

underdeveloped firms.

The industry players are serviced by the following industry associations: the

Philippine Automotive Federation, Inc. (PAFI), the industry’s largest umbrella

organization and recognized as the industry’s voice in international forums such as the

ASEAN Automotive Federation and the APEC Auto Dialogue; the Chamber of

Automotive Manufacturers in the Philippines (CAMPI), whose members include a core

of manufacturers and second tier importers/distributors; and the Philippine Automotive

Competitiveness Council, Inc. (PACCI), composed of four brands whose domestic

operations account for 90% of vehicles manufactured in the Philippines and the Motor

Vehicle Parts Manufacturers Association of the Philippines (MVPMAP).

There are currently fifteen vehicle manufacturers with operating plants in the

country, seven of which are equipped with electro-deposition painting systems. There

are a total of 272 parts and components manufacturers in the country. The industry has

an annual capacity of 250,000 units, all vehicle types included, produced by plants rated

as compliant with global standards and certified by the International Standards

Organization (ISO). In 2011, the automotive industry generated production valued at

P368-billion equal to 4% share in GDP.

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In 2013, the industry estimates that it has directly employed 8,000 workers in

automotive manufacturing, whereas approximately 68,000 jobs have been generated in

auto parts manufacturing. An estimated 340,000 are employed in auto-supporting

industries.

However, with the increase of sales, most of the automobile industry players

failed in customer satisfaction and retention and after sales service is one of the reason

being pinpointed. The challenge for brands to provide excellent customer service

constantly is an ever-increasing one, particularly because technological advances

continue to evolve at a fast and feverish pace. As well, customer needs are changing

along with these technological improvements. The after-sales service performance of a

brand is then measured on a 1,000-point scale, with the higher score indicating better

customer satisfaction. (JD Power Asia Pacific Philippine Customer Service Index (CSI)

Study (2012-2016). Thus, some insurance companies failed to provide excellent after

sales service.

Researcher being an employee working on a bank that offers car insurance

observed that a lot of clients chose not to renew their insurance policy. Upon conducting

an informal interview, some of the clients are looking for after-sales services and when

the insurance companies failed to provide such, clients opted not to renew their policy.

In view of the facts above, the researcher opted to conduct this study to

determine the after sales services of selected car insurance companies and the

customers’ satisfactions in the said services for the researcher believes that uplifting
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these after sales services will lead to sustaining customers’ loyalty, which will eventually

help the insurance companies to increase their sales.

Scope and Limitation

The study was conducted to determine the After Sales Services of selected Car

Insurance Companies in the province of Rizal for the year 2019.

The study was focused on the profile of the client-respondents, profile of

insurance companies, after sales services, level of satisfaction of the clients on the after

sales services, problems encountered by the clients in availing insurance services, and

the significant difference on the level of satisfaction of the clients in terms of their profile

and insurance company.

The insurance companies who were the subject of the study are Insurance

Company A and Insurance Company B. Thirty (30) client-respondents who did not

renew their insurance policy were chosen purposively in gathering the needed data.

The researcher utilized the descriptive research and a validated researcher made

questionnaire checklist in order to answer the specific questions of the study. Interview

and documentary analysis were also employed. Frequency, percentage, weighted mean

and ANOVA were used in analyzing and interpreting the data gathered from the

respondents. Documentary Analysis was also used in the study.

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Statement of the Problem

The study aimed to determine the After Sales Services of selected Car Insurance

Companies in Province of Rizal.

Specifically, it sought answer to the following questions:

1. What is the profile of the client-respondents in terms of:

1.1. Address;

1.2. Occupation;

1.3. Annual Income;

1.4. Nature of Client based on frequency of purchase of insurance;

1.5. Type of Car;

1.6. Number of Cars;

1.7. Mode of Purchase;

1.8. Characteristics of Insured Car

1.8.1. Year of Automobile;

1.8.2. Brand;

1.8.3. Model;

1.8.4. Transmission;

1.8.5. Fuel Type;

1.8.6. Value of Automobile;

1.8.7. Gross Premium;

1.8.8. Mode of Payment;

1.8.9. Type of Insurance Policy;

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1.8.10. Status of Mortgage

2. What is the profile of the Insurance Company in terms of:

2.1. Number of Years in the Industry;

2.2. Number of Clients for the Last Three Years, and

2.3. Average Retention Rate for the last 3 years?

3. What are the After-Sales Services of the insurance company?

4. What is the level of satisfaction of the client-respondents?

5. Is there a significant difference on the level of satisfaction of the client-respondents in

terms of their profile?

6. Is there a significant difference on the level of satisfaction of the client-respondents in

terms of insurance companies?

7. What are the problems encountered by the client-respondents?

8. Based on the problems, what course of action may be proposed?

Hypotheses

The study tested the following null hypotheses which states that

1. There is no significant difference on the level of satisfaction of the client-

respondents in terms of their profile.

2. There is no significant difference on the level of satisfaction of client-

respondents in terms of insurance companies.

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Theoretical Framework

The study was anchored on the Customer Service Theory of Nicky Lamorco

(2018) which states that Customer satisfaction and customer loyalty are at the heart of

customer service. In fact, it can be argued that the two are synonymous with customer

service. Ultimately, theories related to customer satisfaction contribute to theories that

are all about customer loyalty. These are the main links in a chain. When you provide

good customer service to your employees, your business then leads to their

satisfaction. In turn, customer satisfaction, leads to customer loyalty.

Customer service is regarded as something of a tree, whose branches represent

the more-specific aspects of customer services, whereas the trunk represents the

general aspects of customer services.

So, what does the customer see first? She sees the environment of the product

or service and whether or not she can find a solution for her needs. In the customer's

experience, this represents the tree's trunk. Her early experience will pretty much

determine how the rest of her customer experience will be. It represents the basics of

customer service, from which everything else follows. After all, it is only from the

customer’s perception of the initial environment that other wants and needs can follow.

Once the customer has sorted out the basics, she will then care about specific

aspects of the service, such as the price of the product or service; the staff's reliability

and general friendliness; and if maintenance services are available after customers

have purchased the product. These are the branches of the customer service tree,

which ''grow'' out of the customer’s experience with the trunk.

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Once the customer has sorted out the basics, she will then care more about the

services, such as the price of the product or service; the staff's reliability and the staff's

general friendliness; and, if maintenance is available, after customers have purchased

the product.

The theory is considered since the study aims to determine After Sales Services

of Selected Car Insurance Companies in Province of Rizal, the theory will be a great

help to guide to the researcher to identify the after sales service and the customer

satisfaction and retention rate.

Conceptual Framework

The conceptual framework as shown on the next page illustrates the interplay of

the variables that are considered to determine the After Sales Services of Selected Car

Insurance Companies in Province of Rizal with the end view of coming up with a better

course of action for the customers’ satisfaction and retention.

The first box, input, contains both profile of the client-respondents, profile of the

car insurance companies, after sales services, level of satisfaction, retention rate,

problems encountered in availing the after sales services. The second box, process,

refers to the research activities conducted by the researcher in answering the problems

of the study, validation of questionnaire checklist, distribution and retrieval of the

questionnaire checklist, interview, presentation, analysis and interpretation of data

gathered through statistical tools.

The third box, output, refers to the level of satisfaction of clients in the after

services of car insurance and an action plan to address the problems of the study.
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The arrow from input frame to process frame indicates that input are processed

in accordance with the problems and the arrow from process frame to output frame

indicates that the process leads to the determination of the relationship between and

among the indicated variables and the development of an action plan.

Input Process Output

Profile of the  Validation of

Client-Respondents questionnaire
Client Satisfaction on
checklist
Profile of the After sales services of
Insurance  Distribution and Insurance companies
Company retrieval of
questionnaire
After Sales Services checklist Action Plan
Client Satisfaction

Retention rate  Interview

Problems of Clients  Presentation,
in availing after analysis and
sales services interpretation of
data gathered

Feedback

Figure 1

Conceptual Model showing the After Sales Services of Selected

Car Insurance Companies in Province of Rizal

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Definition of Terms

Terms here were conceptually and operationally defined for better understanding

of the readers:

After Sales Services. This refers to the services provided by the insurance

companies once the car has been released to the client.

Car Insurance. This is a contract between you and the insurance company that

protects you against financial loss in the event of an accident or theft. Property – such

as damage to or theft of your car. Liability – your legal responsibility to others for bodily

injury or property damage.

Characteristics of a Car. This refers to the features of the car

Customer Care. This refers to the process of looking after customers to best

ensure their satisfaction and delightful interaction with a business

Customer Satisfaction. This is a marketing term that measures how products or

services supplied by a company meet or surpass a customer's expectation.

Customer Service. This refers to the after sales services of the insurance

company about the feedback of the customers and the assistance provided on the

website or over the phone by Sales Professionals.

Customer retention. This refers to the activities and actions companies and

organizations take to reduce the number of customer defections

Number of After-Sales Services. This refers to the total number of after sales

services of the selected insurance companies.

Number of Years in the Industry. This refers to the number of years wherein

the company is engage in car insurance industry.

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Inspection. This refers to the after sales service about inspection of car/product

of the client.

Repair and Maintenance. This refers to the after sales service about repair and

maintenance.

Service Camp. This refers to after sales service wherein clients are oriented

deeply about the product.

Towing Assistance. This refers to assist motorists, or bicyclists, whose vehicles

have suffered a mechanical failure that leaves the operator stranded.

Type of Cars. This refers to technical details of the car

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Chapter 2

REVIEW OF RELATED LITERATURE AND STUDIES

The following are the variables used in the study. Discussions include different

ideas from related studies and literature which are significant to the present study.

After Sales Services

Foreign Literature

Many car dealerships in various markets have observed how small the profit

margin is if they only rely on the vehicles sale (Senter& Flynn, 2010). Therefore, they

started to include the after-sales activities, such as maintenance and part sales, to

improve their profit and revenue (nd). Service managers have always been viewed as

the main source for detecting customers’ expectations and requirements; they can do

so through deeply perceiving and examining the current quality of the service offered.

Their service quality standard should be built based on the customers’ evaluations

(Dedeoğlu&Demirer, 2015). Hussain, Bhatti, and Jilani (2011) stated earlier that

management should build their service strategy emphasizing the performance

perceived by customers.

After-sales management is considered part of customer relationship

management (CRM), that is, the maintenance of all customer relationships. The after-

sales management is also part of the sales process if it is to be classified as step, in a

further pre-sales phase that flows ideally. This is because any customer who is happy

with the after-sales service offered by the company is very likely to purchase from the

same company again while also recommending its products to friends and family.After-

sales management arose from the realization that the customer relationship does not

end with the deal, but spans over the entire life of a product or an item or service, for
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additional marketing efforts to take advantage of this period by causing and customer

loyalty to increase with increasing customer satisfaction which is the main goal of the

after-sales marketing. (Essay, 2018)

Customer service, warranty work and the continued support of the customer by

the seller are typical tasks of the after-sales management. However, the tasks involved

in after-sales effort by the company are no longer limited to these. After-sale services

now, include not only the customer claim and warranty management, but also the

maintenance operations, the spare parts planning and logistics, and all the operations

with a lasting effect on customer satisfaction. There are many reasons why after-sales

are important for product managers.

Chitcharoen et al. (2013) investigated the relationship between the independent

variables (brand awareness, channel, perceived web quality and perceived quality) and

the dependent variable (After-sales service). Perceived web quality, perceived quality

and channel had positive relationship with after-sales service.

Wickramasinghe and Mathusinghe (2016) provided various dimensions which will

help both, customers as well as the organization and focused on whether after-sales

service department depended on their service personnel (Knowledge, skill and

experience)

Murali and Pugazhendhi (2016) proposed an integrated model to improve the

performance of organizations. They used case based approach on after-sales service

operation of a firm engaged in household appliance business.

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The above literatures relevant to the present study as it provides description of

what After Sales are and how it impact the organization After Sales is one of the topics

covered in the present study.

Local Literature

Car owners are more willing to buy the same car brand if they receive excellent

after-sales services from the dealer. Considering this fact, automotive companies have

also focused on winning the heart of their customers with fast and efficient after-sales

services.

In the Philippines, customer satisfaction with after-sales service at authorized

automobile service centers has dropped. This is according to the findings of the 2017

Philippines Customer Service Index Study conducted by global market research

company J.D. Power, in which car brands that excel at after-sales customer satisfaction

in the country are identified.

The study is based on the responses of 1,951 new vehicle owners who

purchased their vehicle between February 2015 and May 2016 and took their vehicle for

service to an authorized dealer or service center between August 2016 and May 2017.

The study is held annually since 2001 to measure satisfaction among vehicle owners

who visit an authorized dealership service center for maintenance or repair work

between the first 12 to 24 months of ownership.

The J.D. Power 2017 Philippines Customer Service Index Study revealed that

the overall satisfaction for the industry has decreased by 29 points, compared with 822
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in 2016, to an average of 793 on a 1,000-point scale. It is the lowest score since the

study was launched, noting that the satisfaction has decreased across all five factors:

service quality (29%); service initiation (26%); vehicle pickup (17%); service facility

(14%); and service advisor (14%). Among the five factors, service initiation and vehicle

pickup have scored the lowest at 787 each.

Congruent to the present study the above literatures discussed in depth the

relationship of customer satisfaction and after sales services and how it affects the

performance and service quality of the company. Relatively, the present study is about

After Sales and Customer Satisfaction.

Foreign Studies

Customer satisfaction is extremely important because it is the way of getting

feedback from the customers in a way that they can use it to manage and improve their

business. Customer satisfaction is the best indicator of how the business looks like in

the future. Customer satisfaction helps in doing SWOT analysis that could help them to

develop their business in an advance and in a systematic way. Besides this, it will also

help in making the right decision to use the appropriate resources while manufacturing

the products. Similarly, it maintains the relationship with the existing customers and also

creates the possibility to acquire others. Customer Satisfaction is a measure of how

products and services provided by a company meet or surpass customer expectation.

Nowadays, mere products cannot satisfy customers’ expectation; customers demand

instant after sales service as well. Customer satisfaction largely depends on how
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customers are treated before, during and after the sales is made, along with product or

service utility. (SSRS research 2016)

The above study is relevant since it discussed the importance of getting feedback

to the customers as a measurement of Customer Satisfaction which is one of the focus

of the present study.

According to Philip Kotler, after sales service is a service provided by the

company to a customer after the sale. After-sales services, a high-margin business,

account for a large chunk of corporate profits. According to a previous MR Research

report, businesses earn 45% of gross profits from the aftermarket, although it accounts

for only 24% of revenues. The cost of attracting a new customer is estimated to be five

times the cost of keeping a current customer happy and hence, businesses are

conducting customers’ satisfaction survey to understand needs and wants of the

customer.

Congruent to the present study, the above study is relevant since it discusses

how after sales affects the sales and the customer satisfaction which is the main point

of the present study.

According to Automotive news (May 5, 2014), General Motors is planning to

shorten its customer satisfaction survey via online ratings and reviews which will gather

faster and effective feedback. Similarly, as per the J.D. Power Asia Pacific - 2014 India

Customer Service Index (CSI) (Based on 1000-point scale), the top three companies

which top the list on customer satisfaction are Maruti Suzuki – 890, Honda Cars India –
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863 and Hyundai India – 863.After sales service plays a great role in customer

satisfaction. The relationship between after sales service and customer satisfaction is

positive (r=0.463, P0.001) and there is positive correlation between after sales service

and intent to repurchase (r=0.583, P0.001) (Maghsoudlou, Mehrani and Azma, 2014 )

The above study is relevant since it provides explanation as to how customer

survey is relevant and how it pictures customer satisfaction which is also the focus of

the present study.

“The Role of AfterSales Service in Customer Satisfaction: Case Study: Samsung

House Appliances). Out of 100 customers of Tata at Jharkhand, 66% were satisfied with

the after sales service provided by the showroom, 60% of the customers agreed that

staffs were available in timely manner, 20% said that they had to wait longer hours to

get the service, 26% agreed that the staff were friendly and cheerful in dealing with

them, 44% agreed that staff greeted them and offered help as well, 40% agreed that

staff were skilled and knowledgeable, 42% agreed that staff answered their problems,

and 40% agreed that facilities were provided in waiting room (Mishra, 2014 “A study on

relation between effective after sales service and customer overall satisfaction at TATA

motor’s with special reference to Ramgarhia Automobiles RamgarhCantt, Jharkhand”).

Relative to the present study, the above study is relevant as it deals with the

determinants of customer satisfaction and after sales provides. It points out the different

variables which some are part of the present study.

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Customer satisfaction largely depends on product features, price and

aftermarket. Price, mileage, pickup and design have significant effect on customer

satisfaction of Honda at Tirupati (Yuvaraju and Rao, 2014, “Customer Satisfaction

towards Honda Two Wheelers: A case study in Tirupati”). Customers are satisfied with

price, design, safety, mileage, interior space, status, brand name, comfort level, spares

and after sale service of Tata motors passenger vehicles. Price was the most

influencing and primary determinant, mileage and interior space were considered to be

secondary determinants.

The above study is relevant since it provides explanation as to how customer

satisfaction largely depends on various determinants such asproductfeatures, price and

aftermarket which is also the focus of the present study.

After sale service were found to be less influencing (Dua and et.al, 2013). As per

the research of Ladokun, Adeyemo, and Ogunleye (2013), Product delivery; Installation

and Warranty were significantly joint predictors of customer satisfaction. Fuel Economy,

Comfort, Spare parts, Price, value for money, mileage, maintenance, radius and parking

have significant effect on customer satisfaction of Maruti Suzuki. Discounts, seasonal

offers and delivery period were considered valuable by the customer (Singh and

Srivatava, 2013, “Factors Affecting Customer Satisfaction: A Study on Maruti Suzuki”).

There are some factors of after sales services which influence consumer buying

behaviour. Economic spare parts have strong impact on consumer buying behaviour as

compared to easy availability of spare parts and easy availability of mechanic (Saeed

and et.al, 2013, “Impact of ‘After Sales Service’ on ‘Consumer Buying Behavior’ in
 22

Sahiwal Pakistan”). Consumer buying decision also depends on demographic factor of

the customer. Sales are strongly correlated with age group and gender of the

consumers whereas income level has nothing to do with purchase decision of

customers (Shaikh, 2012).

The above studies are relevant since it provides discussion as to how after sales

service influence or has significant different with customer satisfaction and consumer

behavior which is also the main point of the present study.

Service dimensions are one of the major determinants of customer satisfaction.

In telecom sector of Pakistan, service quality dimensions (like reliability, technical

service, image, assurance etc) and customer satisfaction have positive correlation

(Sandhu and et.al, 2013), whereas in China’s Auto industry fairness, empathy, reliability

and convenience have significant positive impact on satisfaction, but responsiveness

has no significant positive impact on satisfaction. However, trust has a significant

positive impact on commitment (Gang and Shuqin, 2012). Accepting attitude of the

company, service personal attitude, increasing processing speed, after sales service

like maintenance, supply of spare parts, replacement and most importantly, time to

recover service etc will be helpful in after sales service recovery (Fenghua, Xiaoye and

Yuqing, 2013).

Relative to the present study, the above study is relevant as it deals with the

determinants of customer satisfaction and after sales provides. It points out the different

variables which some are part of the present study.

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Local Studies

Customer satisfaction is influenced by specific product or service features and

perceptions of quality. Satisfaction is also influenced by customer’s emotional

responses, their attibutionsnatheir perception of equity. Increased customer satisfaction

can provide company benefits like customer loyalty, extending the life cycle of a

customer expanding the life of merchandise the customer purchase and increases

customers positive word of mouth communication. When the customer is satisfied with

the product or service of the company, it can make the customer to purchase frequently

and to recommend products or services to potential customers. It is impossible for a

business organization to grow up in case the company ignores or disregards the needs

of customers (Tao 2014.)

Relative to the present study, the above study is relevant since it discusses ho

customer satisfaction is influenced by specific product or service features and

perceptions of quality and influenced by customer’s emotional responses, their

attibutionsneither perception of equity. Customer Satisfaction is one of the variables of

the present study.

According to Heskett et al. (2011) unhappy customers are more likely to speak

out against a poorly delivered service at every opportunity. In some instances, they

even can discourage acquaintances from trying a service or product. On the other hand,

“Apostles” are those customers who are truly satisfied with the company and the service

offered resulting in true loyalty to the company. Satisfied customers are prepared to pay

more for the product or services. Every satisfied customer is supposed to spread the
 24

positive word of mouth to community they live in. Thus, satisfaction is the main driver of

loyalty and for that customer must be highly satisfied.

Congruent to the present study, the above study is relevant since it posited on

how customers react once they are not satisfied with the service the company provided,

thus exhibiting how customer satisfaction plays a huge role in company’s success.

Thomas and Tobe (2013) emphasize that “loyalty is more profitable.” The

expenses to gain a new customer is much more than retaining existing one. Loyal

customers will encourage others to buy from you and think more than twice before

changing their mind to buy other services. Customer loyalty is not gained by an

accident, they are constructed through the sourcing and design decisions. Designing for

customer loyalty requires customer-centered approaches that recognize the want and

interest of service receiver. Customer loyalty is built over time across multiple

transactions.Customer loyalty is another important factor in customer satisfaction. The

impact of the satisfaction in loyalty has been the most popular subject in study of the

marketing theory. Therefore, several studies have proved that satisfaction and loyalty

have the direct connection between one another. As satisfied customers are loyal and

dissatisfied customers are a vendor (Heskett 2011.)

Finding the loyal customer is not accessible even the customers seem to be

satisfied with the products and the services. In fact, the behavior and attitude of the

customers towards the particular goods and services matters the most. If the behavior

of the customers is positive to the service holder, then those customers are said as a

loyal customer (Abdullah 2012.) There are two types of customer loyalty based on
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behavioral and emotional loyalty on the goods and services. Behavioral loyalty refers to

frequent shopping in a particular retailer and emotional loyalty refers to the customers'

concern towards certain retailer on the basis of past buying experience and attitude. In

this both behavioral and emotional loyalty model, increased satisfaction should increase

customer loyalty. When customers are not satisfied, customers have the option to

express the complaints going to the competitor. But, the study has shown that 60-80%

of the customers are satisfied and very satisfied on the survey just prior to the defection.

Therefore, there should also be other factors besides satisfaction that have a certain

impact on customer loyalty

Studies above are relevant as it discuss how Customer loyalty is another

important factor in customer satisfaction. In fact, the behavior and attitude of the

customers towards the particular goods and services matters the most. If the behavior

of the customers is positive to the service holder, then those customers are said as a

loyal customer.

As Sudharshan (2010) found, there is a positive relationship between customer

satisfaction and customer loyalty but this connection is not always a linear relation. This

relationship depends on factors such as market regulation, switching costs, brandequity,

existence of loyalty programs, proprietary technology, and product differentiation at the

industry level.

Yu et al. (2014) pointed out that it is better to utilize the market resources in

maintaining the existing customers rather than looking for new ones. Also, if the

companies focus on increasing their customers’ loyalty by 19 5%, that would lead them
 26

to obtaining up to 85% profit improvement. High service quality is critical to enhance

customer satisfaction and to the increase the probability of success of the organization

(Mao & Zhang, 2012).

The above studies are relevant since it explains how service quality is a

determinant of customer satisfaction. Thus, congruent to the present study because

customer satisfaction is one of its variable.

Synthesis

Senter & Flynn (2010) discussed how After Sales affect profit and revenue and

impact the level of satisfaction. While, Dedeoğlu&Demirer, 2015 discussed how

important the clients' role in evaluating service quality of the company which will result

to Customer Satisfaction Chitcharoen et al. (2013) and Wickramasinghe and

Mathusinghe (2016) shared oner explaining how different variables such as brand,

employees level of knowledge and the like have positive significant with After Sales

Service and Customer Satisfaction. Maghsoudlou, Mehrani and Azma, 2014 discussed

that after sales service plays a great role in customer satisfaction. Thomas and Tobe

(2013) emphasize that “loyalty is more profitable.” The expenses to gain a new

customer is much more than retaining existing one. Loyal customers will encourage

others to buy from you and think more than twice before changing their mind to buy

other services.
 27

Chapter 3

RESEARCH METHOD AND PROCEDURE

This chapter discusses the research design, setting of the study, subject of the

study, sources of data, procedure of the study and statistical tools employed in the

study.

Method of Research Used

The study used the descriptive survey research design utilizing a questionnaire-

checklist as a tool in gathering the needed data. According to Siquijor - Enriquez (2003),

descriptive method is characterized as a survey or normative approach to the study of

conditions, essential guide to one’s thinking. It is concerned with conditions of

relationships that exist, practices that prevail; beliefs, processes that are going on;

effects that are being felt, or trends that are developing.

Descriptive survey research is the most appropriate for the study since the aim of

the investigation is to know the after sales services of selected Car Insurance

Companies.

Documentary Analysis on the data for retention rate and interviewabout the

problems encountered by the client-respondents were also employed in this study to

validate the information gathered.

 28

Setting of the Study

The study was conducted in the Province of Rizal. Rizal is one of the Philippines

first class provinces that belongs to CALABARZON (CA-vite, LA-guna, BA-tangas,

Rizal, Que-ZON) Region or region IV-A in the island of Luzon. The province enjoys a

natural beauty of nature and a perfect setting for investments, business establishments

and settlements. It is bounded by Sierra Madre Mountain Ranges and Quezon Province

in the east, the province Laguna in the soutwest, the province of Bulacan in the north,

Metropolitan Manila in the west-northwest portion and by Laguna de Bay in south/south-

western portion. Rizal is one of the neighboring provinces of Metro Manila. It takes an

hour drive from major commercial districts and centers of Metropolis to reach the

province's best places. Rizal is a green province which is the best place to unwind from

crowded and polluted metropolis.

The province's topography is a combination of valleys and mountains; flat low-

lying areas on the western portion which are mostly urbanized and populated, and the

rugged ridges and rolling hills which form part of the Sierra Madre Mountain ranges in

the eastern portion. Resting in the middle of Laguna de Bay, is the Philippines' largest

lake island, the Talim Island which extends 13 miles across the lake.

Generally, Rizal Province is an agricultural province. The potential of agriculture

remain largely untapped with large areas of land still stand undisturbed and waiting to

be developed.Fishing is a long thriving industry. The 90,000 hectares Laguna de Bay is

 29

the province’s primary source of freshwater fish species and other marine life. Eight

municipalities with 83 barangays lie along the shoreline and depend on the lake for

fishing and aquatic activities.

Substantial amount of non-metallic mineral deposits consisting of construction

materials in the form of rock aggregates and volcanic tuff, sand and gravel, limestone,

marble, guano/rock phosphate also exist in the province which can fuel other potential

industries and economic activities.The availability of red clay and the large deposits of

raw materials in Antipolo City, Tanay and Baras in the form of limestone, dacite, diorite,

siliceous sand and shale-sandstone used for the manufacturing of cement, a basic

material used in construction can also be made into terra cotta, ceramic and brick

makings.

The province is inhabited mostly by Tagalogs. Minority of other ethnic groups are

Visayas, Ilocanos, and other local groups. It has a population of 2,284.046 with a labor

force consisting of 1,272,000 or 55.7% of the total population. Its people are its number

one resource, known to be consummate artists and craftsmen. The literacy rate is

100%. The primary dialect is tagalog with english as the second language.

Subject of the Study

The subjects of the study are two Insurance companies which were coded as

Insurance Company A and Insurance Company B.

Insurance Company Astands at the forefront of the non-life insurance industry -

the country’s number one non-life insurance company. It is proud of its achievements as
 30

much as it is proud of its contributions to the development of the Philippine non-life

insurance industry and to the progress of the Filipino nation. Guided by its tradition of

excellence and its vision of becoming synonymous to non-life insurance, it has become

a towering symbol of Filipino entrepreneurship and dynamism.

Insurance Company B is a leading non-life insurance company in the Philippines

directly servicing its clients. Insurance Company Bis an affiliate of a bank and offers its

clients a wide array, of non-life insurance products covering, motorcar, fire, personal

accident, and health among others.

Both Insurance Companies are located in Rizal Province.

For the client-respondents, a total of 30 client-respondents who did not renew

their policy for both Insurance Companies were chosen through purposive sampling

technique. For Company A, there were 33 total unrenewed and for Company B, there

were 36 total unrenewed. The researcher tried to contact all of them through phone

since it was conducted during the Enhance Community Quarantine, but only 15

respondents from each Company was able to answer and the rest was unreachable.

Procedure of the Study

The researcher developed a researcher-made questionnaire checklist and guide

questions for the interview and were subjected for validation by the experts.

After validation, the researcher sought permission from the Head Offices of the

Insurance Companies to allow her to conduct the study to their clients.

 31

Public Documents such as Company profile were used for documentary analysis

of data.

After the retrieval, with the help of the statistician, tallying, tabulating, analysis

and interpretation of data as well as the labelling of the summary of findings,

conclusions and recommendations were undertaken by the researcher.

Sources of Data

Data was gathered through the validated researcher-made questionnaire

checklist and interview guide.

Public Documents such as company profile were used for documentary analysis

of data.

The questionnaire undergone face validation by experts in business, managers

of insurance companies and banks, research expert, professorial lecturers, and other

authorities in the business industry.

Sampling Design and Sample

Purposive Sampling was used to determine the client-respondents to be part of the

study. A total of 30 client-respondents who did not renew their insurance policy for both

Insurance Companies were chosen through purposive sampling technique. For

Company A, there were 33 total unrenewed and for Company B, there were 36 total

unrenewed. The researcher tried to contact all of them through phone since it was

conducted during the Enhance Community Quarantine, but only 15 respondents from

each company was able to answer and the rest was unreachable.
 32

Branch personnel and insurance agents were included as secondary

respondents interviewed to support the gather data needed for the study.

Construction of Instrument

The researcher constructed the questionnaire checklist through the help of the

insurance agents and was subjected to face validation with the help of professorial

lecturers and experts in the field of research and business.

The questionnaire consists of five (5) parts. The first part is for the profile of the

client-respondents that include the address, occupation, annual income, nature of client

based on frequency of purchase of insurance, type of car, number of cars owned, mode

of purchase and characteristics of insured car.

The part II includes the Profile of the Insurance company in terms of number of

years in the industry, number of clients for the last three years, and average retention

rates.

Part III is for the list of After Sales Services of the Company.

Part IV is for the Level of Satisfaction of the Client-respondents. The following

scale below was used:

Scale Range Verbal Interpretation Description

5 4.20 - 5.00 Satisfaction level is
Very Much Satisfied
81-100%
4 3.40 - 4.19 Satisfaction level
Much Satisfied
61-80%
3 2.60 - 3.39 Satisfaction level
Moderately Satisfied
41-60%
2 1.80 - 2.59 Satisfaction level
Less Satisfied
21-40%
1 1.00 - 1.79 Least Satisfied Satisfaction level
 33

1-20%

The last part is for the problems encountered by the client-respondents. The

following scale was used:

Scale Range Verbal Interpretation

5 4.20-5.00 Always
4 3.40 -4.19 Often
3 2.60 - 3.39 Sometimes
2 1.80 -2.59 Seldom
1 1.00 – 1.79 Never

Always means that the problem mentioned in the Statement occurred or

happened always and greatly affect the quality of service.

Often means that the problem mentioned in the Statement occurred or happened

often and affected the quality of service.

Sometimes means the problem mentioned in the Statement occurred or

happened and somewhat affect the quality of service.

Seldom means the problem mentioned in the Statement seldom occurred or

happened and does not really affect the quality of service thereby contributing your

much satisfaction

Never means the problem mentioned in the Statement does not occurred or

happened thereby contributing your very much satisfaction

 34

Validation of the Instrument

Research instrument was validated by research experts, insurance experts and

agents before the administration. The content as well as the format and grammar of the

questionnaire were checked by the experts.

Administration of Instruments

The researcher sought approval from the management of the two insurance

companies in conducting the study to their clients. Upon approval, the researcher

administers the validated questionnaire checklist to the clients who agreed to participate

in the study. Interview was also conducted while completing the survey to validate the

responses of the clients.

Statistical Treatment

For further analysis and interpretation of data, the following statistical tools were

applied:

To determine the profile of the company and client-respondents, frequency

percentage, weighted mean and rank was utilized.

To determine the After Sales Services of selected car Insurance Companies,

level of satisfaction and problems encountered of client-respondents weighted mean

was utilized.

To determine the significant difference, T-test was used.

 35

Chapter 4

RESULTS AND FINDINGS

This chapter presents the analysis and interpretation of data gathered based on

the sequence of the specific problems cited in the previous chapter. The data and

statistical findings or results were analyzed, interpreted and given implications.

Profile of the Respondents in terms of Address, Occupation, Annual

Income, Nature of Client based on frequency of purchase of insurance, Type of
Car, Number of Cars and Mode of Purchase

The table 1 presents the profile of the respondents in terms of Address.

Table 1
Profile of the Respondents in Terms of Address
Address/Residence f % Rank
Binangonan 27 90 1
Angono 2 6.70 2
Morong 1 3.30 3
Total 30 100

It could be gleaned from the table 1 that the respondents reside at Binangonan

with 27 or 90 % of the total respondents and ranked first. Only 2 of them came from

Angono with 6.70%, ranked second and 1 each reside from Morong with 3.30% as the

last in rank.
 36

The table 2 presents the profile of the respondents in terms of Occupation

Table 2
Profile of the Respondents in Terms of Occupation
.
Occupation f % Rank
Head Supervisor 1 3.30 4.5
Teacher 1 3.30 4.5
Team Leader 1 3.30 4.5
OFW 3 10 2
Other Employment 23 76.70 1
Online Seller 1 3.30 4.5
Total 30 100

In terms of employment, rank 1 are other employment with 23 or 76.70%

followed by OFW with 3 or 10% while others declared their positions as head

supervisor, Teacher, Team Leader, and Online Seller.

The table 3 presents the profile of the respondents in terms of Annual Gross Income

Table 3
Profile of the Respondents in Terms of
Annual Gross Income

Gross Annual Income f % Rank

Php.300,001 and above 29 96.70 1
Php.250,001 - P300,000 1 3.30 2
Total 30 100
.
The respondents have gross income of Php300,001 and above with 29 or

96.70% while only 1 respondent has a gross income of Php250,001-P300,000.

 37

The table 4 presents the profile of the respondents in terms of Nature of Client based on

frequency of purchase of insurance

Table 4
Profile of the Respondents in Terms of Nature of Client based on
frequency of purchase of insurance

Nature of Client based on F % Rank

frequency of purchase of
insurance
Original Policy 27 90 1
Repeat Purchase 1 3.30 3
Not Declared 2 6.70 2
Total 30 100

It can be viewed from table 4 that in terms of respondents' nature of client based

on frequency of purchase of insurance are Original Policy with 27 or 90% and rank 1

while Repeat Purchase has 1 or 3.30%.

The table 5 presents the profile of the respondents in terms of Type of Car

Table 5
Profile of the Respondents in Terms of
Type of Car

Type of Car F % Rank

Sedan 5 16.70 2
SUV 24 80 1
Van 1 3.30 3
Total 30 100

The usual type of car insured by the respondents is SUV with 24 or 80% followed

by Sedan with 5 or 16.70% while 1 or 3.30% is Van.

 38

The table 6 presents the profile of the respondents in terms of Number of Car.

Table 6
Profile of the Respondents in Terms of
Number of Car

Number of Cars f % Rank

1 30 100
Total 30 100

All of the respondents got only 1 car.

The table 7 presents the profile of the respondents in terms of Mode of Purchase

Table 7
Profile of the Respondents in Terms of
Mode of Purchase

Mode of Purchase F` % Rank

Cash 2 6.70 2
Bank Loans 28 93.30 1
Total 30 100

Majority of the respondents' mode of purchase is through Bank Loans with 28 or

93.3% of the total respondents while 2 of them purchased through cash. In further

explanation, upon availment, the car is still in loan, however upon survey, it is already

not mortgage.

The results imply that most of the client-respondents are from Binangonan, Rizal,

majority are employed with more than Php.300,001 gross annual income. This data

corresponds with the study of Botkin (2018) where she found out that young men

usually incur higher rates than young women as statistically, more male teenagers have
 39

accidents than female teenagers. However, older men generally have better rates than

older women. Some evidence suggests that older women are in more minor accidents

than older men – though the difference in premium costs usually isn’t drastic.

Furthermore, because most traffic accidents occur close to home, the area you

live in greatly affects your rates. More densely populated neighborhoods with more cars

mean you are at a higher risk of accidents, theft, and collisions with injuries. Repairing

your car also costs more in some areas, and some areas have higher rates of theft.

Plus, in this economy, many urban areas with high unemployment rates have a lot of

uninsured drivers, as many people can’t afford to insure their cars. Detroit and

Philadelphia are two of the most expensive cities in which to insure a car, as they both

have high traffic density and high rates of uninsured drivers.

Lastly, Auto insurance companies may also make correlations between a

person’s risk of accident and their profession, and they can adjust your premium

accordingly if they think you’re more likely to get in an accident. For example, delivery

drivers and journalists are on the road constantly, and thus are more likely to be in an

accident, whereas airline pilots often just drive between the airport and home, and don’t

spend much time on the road. Others, such as police officers, paramedics, nuns, and

insurance underwriters, often receive a good rate, as they are seen to be more careful

than the average drive.

 40

Table 8 presents the presents the profile of the respondents in terms of

Characteristics of Insured Car.

Table 8
Characteristics of Insured Car
 41

It could be gleaned from the table that majority of respondents' year of

automobile is 2017 with 8 or 26.70% followed by year 2018 with 7 or 23.30%. 2016 and

2015 got 5 and 4 with 16.70% and 13.30% respectively while 2014 got 2 or 6.70%. The

rest of the years from 2010-2013 and 2019 got 1 with 3.30%

Most of the car of the respondents is Toyota with 14 or 50% of the total

respondents followed by Mitsubishi with 7 or 20%. Hyundai and Nissan both got 3 each

with 10% while Isuzu have 2 or 6.70%. The least preferred brand is Honda with 1 or

3.30%.

For the Model of the Car, majority of the respondents go for Toyota Hiace

Grandia Tone and Toyota Fortuner with both 6 or 20% followed by Mitsubishi Montero

Sport with 3 or 10%. Nissan NV 350 Urvan, Mitsubishi Adventure and Hyundai Grand

Starex all have 2 or 6.70% each while the other models got 1 comprising 3.30%.

For transmission, half of the client-respondents preferred Automatic with 15 or

50% while 14 preferred Manual transmission with 46.70%. One respondent did not give

the type of transmission he/she preferred.

Most of the client-respondents' car insurance are Mortgage with 24 or 80% while

the remaining 6 or 20% are not mortgage. All of the respondents got a Comprehensive

Car Insurance policy.

The data revealed that respondents preferred car with Diesel fuel with 26 or

86.70% while the remaining 4 or 13.30% respondents go for Gasoline.

For the value of automobile, Php700,001 - Php1,000,000 with 11 or 36.70%

ranked first followed by Php400,001 - Php700,000 with 7 or 23.30%; 6 or 20% of the

 42

respondents with Php1,000,001 - Php1,300,000 and 5 or 16.70% has more than

Php1,300,001 cost of their car. Only 1 or 3.30% automobile with a value of less than

Php400,000.

For the Gross Premium, rank 1 is Php25,001 - Php30,000 with frequency of 8 or

26.70% while Php30,001 and above has a frequency of 7 or 23.30%. For Php15,001

-Php20,000 and Php20,001 - Php25,000 each have 6 or 20% and 3.5 in rank. Last in

rank is the lowest gross premium of below Php15,000 with a frequency of 3 or 10%.

For the mode of payment, client respondents either purchase their automobile in

Cash or Post-dated Check with 14 or 46.70% while 2 or 6.70% clients has Auto Debit

Arrangement.

Results support the recent study of Frank (2017) which found out that Filipinos

indicated that overall safety and security ranked as the fifth highest consideration for car

buyers with an engagement score of just 12.63%, falling short to Engine Details, Power

& Performance, Features and Economy. As such the initial findings already immediately

contest the results of our customer survey. While safety appeared to be important,

several other factors related to a vehicle were prioritized by car-buyers when browsing

through the AutoDealwebsite. Initial results showed that premium-level brands scored

very low engagement rates with safety. This may have occurred possibly due to pre-

conceived concepts about specific brands on the rationale that a premium level vehicle

will surely come with premium level safety features. As such the need for potential

buyers to research about safety features may feel redundant given their strong pre-

conceptions.
 43

Lastly, it also noted that noted that there were some minor differences in

engagement between different vehicle categories; with lower priced vehicles often

receiving increased engagement. As we’ve discussed in some of our previous industry

reports; the Philippine car buyer is incredibly concerned over value for money. The

apparent increased focus on vehicle safety among subcompact’s and small city cars

may be the result of consumers being conscious about cutting costs without sacrificing

too heavily on safety features. As a result, consumers in this segment are more likely to

expand the safety and security sections of our car variant pages to check on the volume

of safety features, thus creating the higher engagement.

Profile of the Insurance Company in terms of number of years, number of clients

and the average retention rate of clients for the last three (3) years

Table 9 presents the profile of the insurance company in terms of number of

years, number of clients, and average retention rate of clients for 3 years.

Table 9

Profile of the Insurance Company

 Category Company A Company B

Number of Years 16-yrs above 16-yrs above
Number of Clients 100 and above 100 and above
Average Retention for 3 years 31-40% 21-30%

It can be gleaned from the table that both insurance companies has been

operating for more than 16 years in the industry with 100 and above number of clients.

The average retention rate for the last three years for Company B is 21-30%

while for Company A is 31-40%.

 44

The results imply that Company A performed better in terms of retaining its

clients than Company B.

After-Sales Services Offered by Insurance Company

Table 10 presents the After-Sales Services Offered by Insurance Company

Table 10

After-Sales Services Offered by Insurance Company

After-Sales Services f % Rank

Repair and Maintenance 1 3.30 4.5
Inspection 15 50 2
Customer Care 7 23.30 3
Service Camp 1 3.30 4.5
Towing Assistance 30 100 1

It could be gleaned from the table that there are only five (5) After-Sales services

identified by the client-respondents as repair and maintenance, inspection, customer

care, service camp and towing assistance.

All of the respondents availed Towing Assistance with 30 or 100% while

Inspection service with 15 or 50%. The remaining 7 or 23.30% availed Customer Care

service while Repair and Maintenance with 1 or 3.30%.

Results imply that Towing Assistance and Inspection are the most popular After

Sales service of the insurance company because these are only after sales services

known to clients. Clients are not informed on the after-sales neither on the orientation

nor on the availment. For Repair and Maintenance, clients are only directed or referred

to the accredited repair shop of the insurance company. For Customer Care, there is a

hotline but always busy and cannot be contacted therefore the clients have no choice
 45

but to go directly to the bank and file a claim. For service camp, clients have no idea

what it is and how it works but service camp should be the orientation about the product

availment.

Results support the study of Ladokun, Adeyemo, and Ogunleye (2013),which

states that After sale service were found to be less influencing in Product delivery;

Installation and Warranty were significantly joint predictors of customer satisfaction.

Fuel Economy, Comfort, Spare parts, Price, value for money, mileage, maintenance,

radius and parking have significant effect on customer satisfaction of Maruti Suzuki.

Discounts, seasonal offers and delivery period were considered valuable by the

customer (Singh and Srivatava, 2013, “Factors Affecting Customer Satisfaction: A Study

on Maruti Suzuki”).In addition, the study of Nordinet. al (2016) which states that After-

sale service assumes a crucial part in reinforcing the bond between the association and

clients. After-sales service refers to various processes which ensure customers are

satisfied with the products and services of the organization. The needs and demands of

the customers must be fulfilled for them to spread a positive word of mouth. In the

present scenario, a positive word of mouth plays an important role in promoting brands

and products. After sales service ensures products and services meet or surpass the

expectations of the customers. After sales service include various activities such as

steps and procedures to find out whether a particular customer is happy with the

products or not. In this research, some of the variable is used to measure the after-sales

service. The variable is including warranty, staff service, loyalty, safety and comfort

level. The researcher will incorporate them to measure and observe how they influence

the after-sale service.

 46

Level of Satisfaction of the Client-Respondents

Table 11 presents the level of satisfaction of the client-respondents for the after

sales services provided by the selected car insurance companies.

Table 11

Level of Satisfaction of the Client-Respondents

Level of Satisfaction of Company VI Ran Company VI Rank Mea VI

the Client Respondents A k B n
1.    Processing of 2.67 MoS 5 2.07 LS 9.5 2.37 LS
documents and
requirements
2.    Knowledge of the 2.87 MoS 2 2.27 LS 5.5 2.57 LS
staff/personnel on the
services being offered
3.    Courtesy extended to 2.80 MoS 3 2.47 LS 4.0 2.63 MoS
clients
4.    After sales services                
extended to clients
such as
4.1.        towing 2.73 MoS   2.60 Mo   2.57 LS
service/orientation, S
4.2.        parts and 1.27 LeS   1.60 LeS   2.67 MoS
accessories supply,
4.3.        service hotline 2.18 LS   2.27 LS   1.43 LeS
Average 2.06 LS 9 2.16 LS 8.0 2.22 LS
5.     Manner of attending 2.00 LS 10 2.07 LS 9.5 2.03 LS
to customer
complaints
6.     Promptness in 2.60 MoS 6 2.20 LS 7.0 2.4 LS
handling repair work
7.     Having convenient 2.53 LS 7 2.27 LS 5.5 2.4 LS
hours for service
8.     Friendliness and 2.73 MoS 4 2.60 Mo 3.0 2.67 MoS
helpfulness of Staff S
9.     Clean, comfortable 3.00 MoS 1 3.33 Mo 1.0 3.17 MoS
waiting area S
10.  Fast and efficient 2.20 LS 8 3.07 Mo 2.0 2.63 MoS
transaction every time S
Grand Mean 2.56 LS   2.46 LS   2.51 LS
Legend: MoS- Moderately Satisfied LS- Less Satisfied LeS- Least Satisfied
 47

It can be gleaned from the table that for Company A, the client-respondents were

moderately satisfied with clean and comfortable waiting area with a mean of 3.00 and

rank first, followed by knowledge of the staff/personnel on the services being offered

and Courtesy extended to clients with mean of 2.87 and 2.80 respectively. While they

are less satisfied with fast and efficient transaction, after sales services extended to

clients and the manner of attending to customers complaints with mean of 2.20, 2.06

and 2.00 respectively.

As per the client-respondents perception on Company B, top three in rank are

clean and comfortable waiting area with a mean of 3.33, fast and efficient transaction

with mean of 3.07, and friendliness and helpfulness of staff with a mean of 2.60 all are

verbally interpreted as moderately satisfied. However, the client-respondents are less

satisfied Promptness in handling repair work with a mean of 2.20, processing of

documents and requirements and the manner of attending to customer complaints both

with a mean of 2.07.

The table shows that "Clean, comfortable waiting area" got the highest mean of

3.17 interpreted as Moderately Satisfied; "Friendliness and helpfulness of Staff" and

"Courtesy extended to clients" and "Fast and efficient transaction every time" got means

of 2.67 and 2.63 respectively both interpreted as Moderately Satisfied as well.

"Knowledge of the staff/personnel on the services being offered" and "Processing of

documents and requirements got means of 2.57 and 2.37 respectively both verbally

interpreted as Less Satisfied

 48

"Promptness in handling repair work" and "Having convenient hours for service"

both got means of 2.40 interpreted as Less Satisfied. The lowest mean is "Manner of

attending to customer complaints" with 2.03 also interpreted as Less Satisfied.

For the after-sales services extended to the client, it got an average mean of 2.22

interpreted as Less Satisfied. For towing service/orientation respondents are Less

Satisfied with mean of 2.57. For parts and accessories supply, they are Moderately

Satisfied with 2.67 mean. However, for Service Hotline it got the lowest mean of 1.43

verbally interpreted as Least Satisfied.

Results imply that client-respondents are generally less satisfied with the service

provided by the company in all aspects of the business especially for service hotline and

on the manner that the company is doing in addressing their complaint. This largely

affects the quality and the level of customer satisfaction. Client-respondents were least

satisfied in promptness in handling repair work, having convenient hours for service,

processing of documents and requirements, and manner of attending to customer

complaints.

Results was supported by the study of Wickramasinghe and Mathusinghe (2016)

which various dimensions which will help both, customers as well as the organization

and focused on whether after-sales service department depended on their service

personnel (Knowledge, skill and experience) Furthermore, after sales service plays a great

role in customer satisfaction. The relationship between after sales service and customer

satisfaction is positive (r=0.463, P0.001) and there is positive correlation between after sales

service and intent to repurchase (r=0.583, P0.001) (Maghsoudlou, Mehrani and Azma,2014).
 49

Analysis of variance on the Level of Satisfaction of the Client Respondents when

grouped According to their Profile

Table 12
Analysis of Variance on the Level of Satisfaction of the Client
Respondents when grouped According to their Profile

Profile SV SS df MS F Sig. Ho VI
Between Groups .370 3 .123
Address/Residence Within Groups 2.417 26 .093 1.326 .287 FR NS
Total 2.787 29
Between Groups .740 7 .106
Occupation Within Groups 2.047 22 .093 1.136 .377 FR NS
Total 2.787 29
Between Groups .132 1 .132
Gross Annual Income Within Groups 2.654 28 .095 1.397 .247 FR NS
Total 2.787 29
Nature of Client Based on Between Groups .108 1 .108
Frequency of Purchase of Within Groups 2.477 26 .095 1.133 .297 FR NS
Insurance Total 2.585 27
Between Groups .162 2 .081
Type of Car Within Groups 2.625 27 .097 .833 .446 FR NS
Total 2.787 29
Between Groups .300 1 .300
Mode of Purchase Within Groups 2.486 28 .089 3.384 .076 FR NS
Total 2.787 29
Between Groups .200 1 .200
Status Within Groups 2.586 28 .092 2.166 .152 FR NS
Total 2.787 29
Between Groups .930 8 .116
Years of Automobile Within Groups 1.856 21 .088 1.316 .289 FR NS
Total 2.787 29
Between Groups .285 5 .057
Brand Within Groups 2.502 24 .104 .546 .740 FR NS
Total 2.787 29
Between Groups 1.478 15 .099
Model Within Groups 1.308 14 .093 1.055 .463 FR NS
Total 2.787 29
Between Groups .000 1 .000
Transmission Within Groups 2.688 27 .100 .002 .963 FR NS
Total 2.688 28
Between Groups .250 1 .250
Fuel Type Within Groups 2.536 28 .091 2.761 .108 FR NS
Total 2.787 29
Between Groups .169 4 .042
Value of Automobile Within Groups 2.618 25 .105 .403 .804 FR NS
Total 2.787 29
Between Groups .336 4 .084
Gross Premium Within Groups 2.450 25 .098 .858 .503 FR NS
Total 2.787 29
Between Groups .416 2 .208
Mode of Payment Within Groups 2.371 27 .088 2.366 .113 FR NS
Total 2.787 29
 50

Table 12 presents the obtained F-values, p-values, and decision on the

significant difference on the level of satisfaction of the client-respondents when grouped

according to their profile

Results found that there is no significant difference on the level of satisfaction of

the client-respondents when grouped according to their profile considering the obtained

p-values of all variables which are less than the 0.05 level of significance. This reveals

that the obtained value is sufficient to accept the null hypothesis.

The findings justify the study of Rahman et.al (2018) wherein it investigates the

customer satisfaction level exposed by different demographic group of customers. It

wasfound out that satisfaction level of customers does not significantly vary among

different demographic group as measured through chi-square tes

T-Test on the level of satisfaction of client-respondents in terms of insurance

companies
Table 13 presents the obtained F-values, p-values, and decision on the

significant difference on the level of satisfaction of the client-respondents when grouped

according to the insurance company.

Results found that there is no significant difference on the level of satisfaction of

client-respondents in terms of insurance companies considering the obtained p-values

of all variables which are less than the 0.05 level of significance. This reveals that the

obtained value is sufficient to accept the null hypothesis.

 51

Table 13

T-Test on the Level of Satisfaction of the Client Respondents

when grouped in terms of insurance companies

Mean Sd MnDf Df t Sig. Ho VI

Company A 2.56 .33 0.10 28 .86 .397 FR NS
Level of
Satisfaction Company B 2.46 .29
Problems Company A 3.9 .27 .03 28 0.272 .788 FR NS
Encountered Company B 3.87 .24

Results imply that regardless of companies, the level of customers’ satisfaction is

not significant because it is the service quality of the company that the customers’ are

looking into when asked about their level of satisfaction.

Problems Encountered by the Client-Respondents

Table 14 presents the problems encountered by the Client-Respondents with the

services of the selected Insurance companies.

It could be gleaned from the table that all the problems listed and mentioned are

Often encountered by the respondents considering its grand mean of 3.89.

"Delivery of copy of Policy (whether hard copy or email)" got the highest mean of

4.17 followed by "Issuance of insurance policy" with 4.13 and "Reminder for Renewal

Insurance Policy" with 4.07. The rest of the items means are close with each other. All

of them are verbally interpreted as Often.

 52

Table 14

Problems Encountered by Client-Respondents

PROBLEMS A VI R B VI Ran Mea VI Rank

k n
1.    Assistance provided by 3.53 O 10 3.8 O 9 3.67 O 10
the bank/insurance company 0
2.    Processing of after-sales 3.80 O 7 3.8 O 7 3.83 O 7.5
services 7
3.    Processing of documents 3.79 O 8.5 3.6 O 10 3.72 O 9
and requirements 7
4.    Issuance of insurance 4.33 A 1 3.9 O 4 4.13 O 2
policy 3
5.    Process of claims 4.00 O 4 3.9 O 4 3.97 O 4
3
6.    Reminder for Renewal 4.15 O 3 4.0 O 2 4.07 O 3
Insurance Policy 0
7.    Handling Customer 3.92 O 6 3.9 O 4 3.93 O 5
Services 3
8.    Explanation of Payment 3.79 O 8.5 3.8 O 7 3.83 O 7.5
Terms and Conditions 7
9.    After sales follow-up 3.93 O 5 3.8 O 7 3.9 O 6
7
10.Number of 3.40 O 11 3.6 O 11 3.5 O 11
employees/staff to assist you 0
11.Delivery of copy of Policy 4.20 A 2 4.1 O 1 4.17 O 1
(whether hard copy or email) 3
Grand Mean 3.90 O 3.8 O 3.89 O
7

The findings correspond with the study of Yuvaraju and Rao (2014) that

customers’ satisfaction largely depends on product features, price and aftermarket.

Price, mileage, pickup and design have significant effect on customer satisfaction of

Honda at Tirupati “Customer Satisfaction towards Honda Two Wheelers: A case study

in Tirupati”). Customers are satisfied with price, design, safety, mileage, interior space,

status, brand name, comfort level, spares and after sale service of Tata motors

passenger vehicles. Price was the most influencing and primary determinant, mileage
 53

and interior space were considered to be secondary determinants. After market on the

other hand refers to how the company reaches out to the clients after the transactions in

the bank which may include the delivery of policy, reminder for renewal and after sales

services

Proposed course of action to improve the retention rates and customer

satisfaction

The S.T.I.R. U.P. Course of Action is an abbreviation for Satisfaction, Training,

Insurance, and RatesUpliftment Program. This course of action aims to increase the

level of satisfaction of customers, knowledge product of agents, retention rates and

number of insured clients. The STIR UP is divided into area thrust namely Information

Dissemination, Monitoring, Customer Care, Human Resource, Rewards and Incentives

and Products and Services. Each thrust has programs specific for it.

For Information Dissemination

Onboarding Program which includes orientation and product presentation with

the aim to educate new customers about the products being offered through a

representative and Connect the right products to the right customer segments through

agents and direct channels by analyzing customer data to determine what drives

customer loyalty and to identify cross-sell and up-sell opportunities.

For Monitoring

Close-Up program which includes Policy Review and Reminder Guidelines

and Customers’ Policy Analysis. It aims to consolidate all policy, claims and billing
 54

data in one place, regardless of format; cleansing the data; and then transforming it into

a complete picture of the entire customer relationship and identify those customers most

likely to lapse or cancel policies by using predictive analytics to identify behaviors that

signal attrition so you can do something about it before it happens – not when it’s too

For Customer Care

VOC Program (Voice of the Customer Program) which includes VOC

Hotline and VOC Team. It aims to address different concerns and complaints of the

customers in a timely manner and involve customers’ and listen to their

suggestions/problems that can be an input for improvement

For Human Resource

T.E.A.M Program which stands for Training and Education, Availability and

Monitoring of Agents/Representatives Program. It aims to uplift service personnel

knowledge on product offered,improve availability of agent in branch,monitoring of

agent on claims and agents’ knowledge of clients’ information.

For Rewards and Incentives

For Clients: Project C.L.I.P. – Customers’ Loyalty Incentives Program. It aims

to provide rewards for loyal clients through No claim bonus and Early payment

rewardsFor Agents: Program R.I.S.E or Rewards and Incentives for Star Employee

which aims to encourage agents to close more deals and reward hardworking agents

who have closed many deals.

For Products and Services

 55

Conduct market analysis and consider lowering premiums or offering various

packages in order to Lower premium and Lower participation fee to attract more clients
 56

Area Project/Progra Time Persons/Off Source Success

Thrust m Objectives Frame ice Involved Budget of fund Indicators
-Insurance
 Onboarding - Educate new Start of Agents Genera - Increase
Program customers about the the Year -Marketing Php. l Funds number of
a. Orientation products being Team 50,000 new clients
b. Product offered through a - Well-
Presentatio representative disseminate
n d
- Connect the right information
Informatio products to the right about the
n customer segments product and
Disseminat through agents and services
ion direct channels by
analyzing customer
data to determine
what drives
customer loyalty
and to identify
cross-sell and up-
sell opportunities.

- Consolidate
 Close-up - Consolidating all - Insurance d policies
Program policy, claims and Every Head and claims
a. Policy billing data in one end of Supervisor Php. - Addressed
Monitoring Review and place, regardless of the - Insurance 50,000 claims on
Reminder format; cleansing Month Agents time
Guidelines the data; and then - Early
b. Customers’ transforming it into a Issuance of
Policy complete picture of Policy
Analysis the entire customer - Delivery
 57

relationship Copy of
Insurance
- Identify those Policy on
customers most Tim
likely to lapse or - Early
cancel policies by Insurance
using predictive Reminder
analytics to identify - Addressed
behaviors that issues and
signal attrition so concerns of
you can do clients to
something about it avoid
before it happens – attrition
not when it’s too - Increase
retention
rates
- Insurance -Increase
- Address different Year Head level of
Customer  VOC concerns and round Supervisor Php. 1M customer
Care Program complaints of the impleme -Insurance satisfaction
(Voice of the customers in a ntation Agents and
Customer timely manner -Customer retention
Program) - Involve Representati rates
customers’ and ve
a. VOC Hotline listen to their
b. VOC Team suggestions/probl
ems that can be
an input for
improvement
 T.E.A.M - Uplift service -Human - - Well-trained
Program personnel Quarterl Resource and
knowledge on y manager knowledgea
Training and product offered -Insurance ble agents
 58

Human Education, - Improve Head - Available

Resource Availability and availability of Supervisor agents on
Monitoring of agent in branch -Insurance the Branch
Agents/Represe - Monitoring of Agents
ntatives agent on claims
Program - Agents’
knowledge of
clients’
information
- Additional agents
on the branch
- Provide rewards - Insurance - Increase
For Clients: for loyal clients Quarterl Agents retention
Project C.L.I.P. through y -Customers Php. rates
Rewards – Customers’ a. No claim 300,000 - Increase
and Loyalty bonus number of
Incentives Incentives b. Early Loyal
Program payment rewards Customers
- Loyal
For Agents: -Encourage agents Agents
to close more deals - Performing
Program Agents
R.I.S.E -Reward - High
hardworking agents number of
Rewards and who have closed Clients
Incentives for many deals. /Level of
Star Employee Satisfaction
-Managers -Increase
- Lower As per Heads Php. number of
-Conduct premium Necessa 100,000 new clients
Products market analysis - Lower ry
and and consider participation
Services lowering fee to attract
 59

premiums or more clients.

offering
various
packages
 60

Chapter 5

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

This chapter presents the summary of findings, conclusion drawn and

recommendation offered.

Summary of Findings

Based on the analysis and interpretation of data, the following are hereby

summarized.

1. The Profile of the Client-Respondents in terms of different variables

Most of the respondents reside at Binangonan, Rizal and majority are

employed with gross annual income of more than Php300,000.00.Most of the

respondents’ frequency of purchase of insurance is Original Policy and the usual

type of car is SUV. All of them got 1 number of car through Bank Loans and most of

their car insurance is Mortgage. All of the respondents got a Comprehensive Car

Insurance policy and majority of their automobiles were manufactured in year 2017.

Most of the car of the respondents is Toyota with Toyota Hiace Grandia Tone

and Toyota Fortuner with diesel fuel type amounting from Php700,001 -

Php1,000,000.00, while half of the client-respondents preferred Automatic for

transmission, and for Gross Premium, majority is from Php25,001 – Php30,000 and

their preferred mode of payments are Cash and Post-dated Check.

 61

2. Profile of the Insurance Company

Both insurance companies have been in the industry for more than 16

years with more than 100 clients. The average retention rate for the last three years

for Company A is 21-30% while for Company B is 31-40%.

3. After-Sales Services Offered by Insurance Company

Towing Assistance and Inspection are the most popular and availed after

sales services of the selected insurance companies.

Results imply that Towing Assistance and Inspection are the most popular After

Sales service of the insurance company because these are only after sales services

known to clients. Clients are not informed on the after-sales neither on the orientation

nor on the availment. For Repair and Maintenance, clients are only directed or referred

to the accredited repair shop of the insurance company. For Customer Care, there is a

hotline but always busy and cannot be contacted therefore the clients have no choice

but to go directly to the bank and file a claim. For service camp, clients have no idea

what it is and how it works but service camp should be the orientation about the product

availment.

4. Level of Satisfaction of the Client-Respondents

Client-respondents are moderately satisfied with the clean, comfortable

waiting area of the office, friendly and helpful staff, courtesy extended to them and

for the fast and efficient transaction. While client-respondents were least satisfied in

promptness in handling repair work, having convenient hours for service, processing

of documents and requirements, and manner of attending to customer complaints.

 62

5. Problems encountered by the Client-Respondents

Client-respondents often encountered problems from the insurance

companies in terms of delivery of copy of the Policy, issuance and reminder of

Renewal of Insurance Policy, process of claims, handling customer services, and

after sales follow up.

6. Significant Difference on the Level of Satisfaction of the Client Respondents

when grouped According to their Profile

There is no significant difference on the level of satisfaction of the client

respondents when grouped according to their profile considering the obtained p-

values of all variables which are less than the 0.05 level of significance.

Conclusion

Based on the findings the following conclusions are drawn:

1. Client respondents have high budget for their car insurance policy

2. They preferred Bank Loans as mode of purchase and Cash and Post-dated

check as mode of payment

3. Most of them preferred Mortgage and new model of Automobile with diesel as

type of fuel.

4. Most of the respondents preferred Gross Premium not so high but not so low but

for the Value of Automobile it is high.

5. The Insurance Company is struggling to increase their retention rate.

 63

6. The client-respondents are less satisfied with the services and after sales service

the company provides.

7. The company has problems in delivering a copy, issuance and reminder of

renewal of Insurance Policy

8. The proposed S.T.I.R. U.P. Course of Action is an abbreviation for Satisfaction,

Training, Insurance, and Rates Upliftment Program. This course of action aims

to increase the level of satisfaction of customers, knowledge product of agents,

retention rates and number of insured clients shall be used.

Recommendations

Based on the summary of findings and conclusions, the following are hereby

recommended:

1. Company should focus on strengthening their information dissemination

campaign about the insurance policy to increase client numbers through

systematic information dissemination campaign such as the Onboarding

Program which includes orientation and product presentation with the aim to

educate new customers about the products being offered through a

representative and connect the right products to the right customer

segments through agents and direct channels by analyzing customer data

to determine what drives customer loyalty and to identify cross-sell and up-

sell opportunities to address the problem about customers’ retention and

 64

company’s sales since clients that are informed most likely to become loyal

customers’ that will positively affects the retention rates and sales.

2. Monitoring systems shall be developed for renewal, issuance of notice and

claims such as Close-Up program which includes Policy Review and

Reminder Guidelines and Customers’ Policy Analysis. It aims to consolidate

all policy, claims and billing data in one place, regardless of format;

cleansing the data; and then transforming it into a complete picture of the

entire customer relationship and identify those customers most likely to

lapse or cancel policies by using predictive analytics to identify behaviors

that signal attrition so you can do something about it before it happens – not

when it’s too late to address the issues about late reminder, late delivery of

policy and high numbers of unrenewed.

3. Product .knowledge of agents shall be improved to increase productivity

such implementation of T.E.A.M Program which stands for Training and

Education, Availability and Monitoring of Agents/Representatives Program.

It aims to uplift service personnel knowledge on product offered,improve

availability of agent in branch, monitoring of agent on claims and agents’

knowledge of clients’ information to address the problems about

misinformation and lack of skill on product knowledge of the staff/agents.

4. Rewards and Incentives shall be given to clients to increase customer

retention and to employees to increase sales to address the problem on

retention rates and customers’ satisfaction

 65

5. Consolidation and proper documentation of agent’s information and

insurance policies and claims shall be improved to address the problem late

reminder, late delivery of policy and high numbers of unrenewed.

6. Conduct market analysis and consider lowering premiums or offering

various packages in order to Lower premium and Lower participation fee to

attract more clients

7. Company may consider the proposed plan of action to address the

customers’ satisfaction and loyalty such as the The S.T.I.R. U.P. Course of

Action which is an abbreviation for Satisfaction, Training, Insurance, and

Rates Upliftment Program. This course of action aims to increase the level

of satisfaction of customers, knowledge product of agents, retention rates

and number of insured clients

8. Additional research using different variables in the same subject may be

conducted considering the problems encountered by agents of Insurance

Company may be included to address the gap faced by this industry.

 66

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