MARYLAND INTERNATIOAL COLLEGE

SCHOOL OF GRADUATE STUDIES

A RESEARCH PROPOSAL SUBMITTED TO THE SCHOOL OF GRADUATE STUDIES OF

MARYLAND INTERNATIONAL COLLEGE IN PARTIAL FULFILLMENT OF DEGREE OF
MASTERS OF BUSINESS ADMINISTRATION

CUSTOMERS SATISFACTION TOWARDS LIFE INSURANCE CLAIM SETTLEMENT IN

CASE OF NILE INSURANCE COMPANY S.C

SUBMITTED BY

SECTION ONE

ID MBA355/15

SUBMITTED TO Dr.YONAS H(Asst.prof)

JANUARY, 2023
ADDIS ABABA, ETHIOPIA
 Acknowledgment
First, I would like to acknowledge Maryland international college, department of master of
Business administration (MBA) for giving me an opportunity to prepare this Research proposal.

Second, our appreciation goes to our advisor Dr. Yonas H (Asst. professor) and our Business
research methods lecturer Dr… forgiving us information about how to develop this research
proposal and advising us throughout the proposal development.

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Contents
Acknowledgment.............................................................................................................................................................i
List of tables..................................................................................................................................................................iii
Summary........................................................................................................................................................................iv
CHAPTER ONEINTRODUCTION...............................................................................................................................1
1. Background of study..........................................................................................................................................1
1.2 STATETMENT OF PROBLEM...................................................................................................................3
1.3RESEARCH QUESTION.................................................................................................................................4
1.3 Objective of the study...................................................................................................................................4
1.4.1 General objective..........................................................................................................................................4
1.4.2 Specific objectives........................................................................................................................................4
1.5 Significance of study........................................................................................................................................4
1.6 Scope of study..................................................................................................................................................4
1.7. Limitation of study..........................................................................................................................................5
1.8 Definition of terms...........................................................................................................................................5
1.9 Organization of study.......................................................................................................................................5
CHAPTER TWO REVIEW OF RELATED LITERATURE.........................................................................................6
2.1 Customer satisfaction.......................................................................................................................................6
2.2 Claim settlement..............................................................................................................................................6
CHAPTER THREE RESEARCH METHODS..............................................................................................................8
3.1Research approach............................................................................................................................................8
3.2 Research design...............................................................................................................................................8
3.3 Data type and Data sources..............................................................................................................................8
3.4 Source and study population............................................................................................................................8
3.5 sampling procedure..........................................................................................................................................8
3.5.1 Sample size...................................................................................................................................................8
3.5.2 Sampling technique.......................................................................................................................................9
3.6Data collection instrument................................................................................................................................9
3.7 Data collection procedure................................................................................................................................9
3.8 Data analysis....................................................................................................................................................9
3.9 Ethical consideration........................................................................................................................................9
WORK PLAN...............................................................................................................................................................11
BUDGET PLAN...........................................................................................................................................................12
REFERENCES.............................................................................................................................................................13

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List of tables

Table 1 GANNT chart showing work plan for research proposal,Maryland international college, Addis
Ababa Ethiopia, January 2023...................................................................................................................15
Table 2 Budget for research proposal, Maryland international college, Addis Ababa, Ethiopia January
2023...........................................................................................................................................................16

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 Summary
Background Life insurance is a long-term contract between a policy holder and an insurer and
facilitates long term savings. Life insurance not only provides for financial support in the event
of untimely death but also acts as a long term investment. It enables a policyholder meet his/her
goals such as children’s education, marriage, building homes or planning for relaxed retired life.
Claim settlement has been like a mirror of insurance industry including to each life insurance
companies which public see the real face of their business. One of the reasons for low
penetration of insurance business in the country is due to insurers’ delay in settling claims. A
company which fails to settle the claim, the satisfaction of customers would definitely distracts
the business and discourage to continue or the repurchase of policy.

Objective: The objective of this study will be to examine customer satisfaction toward life
insurance claim settlement in case of Nile insurance company S.C.

Methods Institutional based cross-sectional study design will be conducted on total of 384 study
participant. Data will be collected using structured questioner. The collected Data will be
entering into a Statistical Package for Social Sciences (SPSS) version 25 for analysis.
Descriptive statistics will be used to explain the characteristics of study participants. Bivariable
and Multivariable logistic regression will be used to identify predictors of the outcome variable.

Key words: life insurance, claim settlement, customer satisfaction

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 CHAPTER ONE INTRODUCTION
1. Background of study
People are insecure towards risks and uncertainties (Kannan, M. (2018), Human beings are
exposed of various kinds of risk of uncertain, unexpected and unforeseen events such as
untimely death, loss of properties by fire, theft and accident etc. which cause the financial
losses(basuala, 2017). Insurance business (industry) was increasingly in 18 th century (Kannan,
M. (2018).Life insurance is a long-term contract between a policy holder and an insurer and
facilitates long term savings. Life insurance not only provides for financial support in the event
of untimely death but also acts as a long term investment. It enables a policyholder meet his/her
goals such as children’s education, marriage, building homes or planning for relaxed retired life
(Nyaguthii 2013). The life insurance industry like many other financial services industries is
facing a rapidly changing market, new technologies, economic uncertainties, fierce competition
and more demanding customers and the changing climate has presented an unprecedented set of
challenges. Just like companies of other business domains, life insurance also considers their
customers as the most important asset (Masood H. Siddiqui 2010).Customer service is an
integral part of any life insurance company (Nyaguthii 2013). Customer satisfaction is very
important for service industry since it is a vital consideration to create and keep a competitive
advantage in the present day competitive environment (KidistYohannes 2020).
There are different theories about customer satisfaction can be found in literature like
Dissonance Theory (also known as dissonance reduction theory); this theory suggests that a
person who expected a high-value product and received a low-value product would recognize the
disparity and experience a cognitive dissonance. According to this theory, the existence of
dissonance produces pressures for its reduction, which could be achieved by adjusting the
perceived disparity. Contrast Theory (opposite of the Dissonance Theory), suggests According to
this theory, when actual product performance falls short of consumer’s expectations about the
product, the contrast between the expectation and outcome will cause the consumer to exaggerate
the disparity. The Contrast theory maintains that a customer, who receives a product less
valuable than expected, will magnify the difference between the product received and the
product expected. Comparison Level Theory, Value Percept Theory According to the value-this
theory, satisfaction is an emotional response that is triggered by a cognitive evaluative process in

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which the perceptions of an offer are compared to one's values, needs, wants or desires.
Attribution Theory (The Attribution theory has been mostly used in dissatisfaction/ complaining
behavior models than in satisfaction models) and Equity Theory according to this theory
customer satisfaction is the idea that individuals require consistency between what was expected
and what was experienced. Consistency between both sides of this equation is key to providing
customers with a positive customer experience (Yüksel&Yüksel 2008).
All the insurance companies are regulated by the National Bank of Ethiopia. In addition to this
body, there is also an agency which regulates Governments’ financial sectors. The agency is
responsible to control government owned banks and insurance. the number of insurance
companies is increasing from time to time, but there is no insurance company doing business and
specializing in life insurance business sector only. Currently there are 18 insurance companies
including the public owned insurer in Ethiopia. All of these companies mainly compete on non
life class of business especially in motor, fire and marine class of business. Only some private
insurance companies are doing the business in line with the non life sector. One privately owned
insurance company namely, Ethio-life insurance company was established to do the life
insurance business exclusively, but later decided to turn in to non life sector too(NBE, Kidist H.
2021).

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 1.2 Statement of problem
The rising sophistication of the world economic system in today’s industrial age has increased
the importance of insurance in the process of manufacturing and profit-making dealings
(Parsons, 2005). Claims settlement is the most essential foundation block of the insurance
companies and serves as a mirror through which the members visualize the overall performances
and credibility of the insurers. The problem of running an effective claims administration that
would satisfy the customers and earn their confidence which in turn cause them to repurchase
and recommend insurance products to others has remained too pathetic in the insurance industry
in Africa and the world at large(Bereket Hagos 2019). The retention of customer in insurance
industry especially in life insurance is more challenging in present computing world. As part of
service industry it’s true that life insurance companies cannot survive without customers
(KidistYohannes 2020).

Claim settlement has been like a mirror of insurance industry including to each life insurance
companies which public see the real face of their business. One of the reasons for low
penetration of insurance business in the country is due to insurers’ delay in settling claims. A
company which fails to settle the claim, the satisfaction of customers would definitely distracts
the business and discourage to continue or the repurchase of policy. Such dissatisfied client
might even advice to their friends, relatives and other general public not to patronize such
companies rather than appreciation of buying insurance policy (basuala, 2017). Despite of the
Ethiopia’s long history of civilization and the financial sector of Ethiopia in general and the
insurance mainly the life insurance in particular has not developed. It is among the lowest in the
world and African countries in terms of the three measures namely Insurance premium market
share, market penetration rate and insurance density (insurance premium per capita). Life
Insurance plays an important role to insure against lifetime uncertainty resulting for the mortality
risk of individual. Even though the performance of insurance industry contributes to smooth
operation of the nation’s economy, the industry in general and life insurance in particular is at its
low level of development in Ethiopian context (Mohammed M.2019).
In Ethiopia, as in most developing countries, the insurance sector, and specifically life insurance
is small and underdeveloped (TessemaY et’al 2015). Insurance sector in general and life
insurance in particular in Ethiopia have been given little attention to from the public. We all

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recognize that, unlike the value of property, the value of a human being cannot be measured in
terms of money but we should care about the economic value of a person. The continued life of
an income earner may have economic significance to many people. Certainly it is most important
to any dependents he may have. These dependents have to bear the expenses of last illness and
burial. Their greatest economic loss, however, is the loss of the future earnings on which their
livelihood depends apart from the emotional trauma suffered as the result of the death of a loved
one.
No enough study has yet been conducted to assess the life insurance sector in the Ethiopian
context. The purpose of this research proposal will be to explore the customer satisfaction of
claim settlement of life insurance company leaders executes to grow and sustain the life
insurance business. A growing life insurance industry that complements a country’s sustainable
economic development strategy creates the financial support to manage the risk of dying early or
living too long

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1.3Research question
 Does the claim settlement have effects on customers’ satisfaction in life insurance?

1.3 Objective of the study

1.4.1 General objective
To examine the satisfaction of customers towards life insurance claim settlement in case of Nile
insurance company S.C
1.4.2 Specific objectives
The study specifically aims to:

To investigate the correlation between claim settlement and customer satisfaction

To examine customer satisfaction toward life insurance

1.5 Significance of study

The research proposal is significant in several aspects: firstly, the finding of this study will give
information for the company in formulating appropriate strategies for reaching and attracting
customers and hence increase their income. Secondly, it will contribute to the knowledge pool
which may foster a clear understanding of the major importance of customer satisfaction in life
insurance industry of Ethiopia.
Thirdly, will serve as inputs for the government that is on the process of establishment
Community based life Insurance Organization to reorganize & repackage products and services
to meet the people’s culture and way of life, by including Life insurance. Additionally this study
could be used as a base for future researchers.

1.6 Scope of study

This research proposal emphasis mainly on the life insurance customers of Nile insurance
company. Nile is pioneer insurance Company in establishment from private insurance
companies, have more than twenty six years of experience in the insurance industry compared to
other private insurance companies, and also has large number of life insurance customer.

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1.7. Limitation of study
The study will be conducted on Nile insurance company and does not include all insurance
companies’ customers and the study is conducted on insurance industry. Hence, the finding of
this study cannot be generalized to other industries and it cannot be also generalized to other
insurance companies.

1.8 Definition of terms

Customer satisfaction: “Customer satisfaction is the response with pleasure or disappointment
for the performance of certain product or service related to individual expectations” (Kotler
2008)

Life Insurance: is a contract between an insurance policy holder and an insurer, where the
insurer promises to pay benefit in exchange for a premium, upon the death of an insured person.

Claim

Claim settlement

1.9 Organization of study

The organization of the research proposal ranges from chapter one to chapter five, where in
chapter one main theme of background and statement to the problem covered. Also the
objectives, research questions, significance and scope of the study presented in this chapter.
Chapter two consists of reviews of the literature relevant to the study, whereby chapter three
covers is methods of data analysis. Last chapter covers conclusion and recommendations made
by the researcher for the desired outcomes.

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 CHAPTER TWO REVIEW OF RELATED LITERATURE
2.1 Customer satisfaction and life insurance in Ethiopia
Satisfaction / dissatisfaction can be defined as the customer’s fulfillment response, the degree to
which the level of fulfillment is pleasant or unpleasant. Therefore, satisfaction is the customer’s
overall judgment of the service provider (Masood H.2010).According to the study conducted by
Maya kannan(2018)Satisfaction is a most important considered factor among the customers and
company to add value towards their product and service which leads to customer satisfaction.
Regardless of the line of business, customer’s satisfaction is important to business success.
Business organization must focus and force all the member of staff from the most senior to the
least junior of the management hierarchy to take consumer satisfaction as their priority in all the
frame work of policies, practices and information (Sogunro, 2013).
The study conducted in Asia showed that, life insurance business in Malaysia contributes 2.8%
of GDP as opposed to 6.1% in Singapore and 7.5% in Japan. The Malaysian government intends
to increase contribution toward GDP to 4% with 75% of the population insured by
2020(Mahdzanet’al 2013). According to Kidist A (2018), Life insurance has significant
contribution for the economy in some African countries like Nigeria, Tanzania and Egypt. In
2014 life insurance contribution for the gross written premium of Egypt, Nigeria and Tanzania
were 33 %, 18.6 % and 8.7 %respectively.
In developed country insurance play an important role in their economic growth but in less
developed countries like Ethiopia and other sub-Saharan countries insurance company helps as
only transferring risk from individual or business to the policy holders (Girma et’al, 2018).
According to the study conducted by Girma and Abebaw et’al(2018)At the end of June 30, 2010,
the total capital of the industry (both life and non-life) reached Birr one billion. The general
(non-life) insurance business constituted more than 95% of total industry's capital on average
during the last ten years. The share of long term (life insurance) has taken only the marginal
share of 5% of the industry's capital in the last 10 years. Literature showed that, Ethiopia’s
insurance sector skewed toward corporate client who insured their assets. General insurance
dominates the sector, with motor vehicle insurance forming the largest category of general
insurance - constituting 43% of total insurance premium On the other hand life insurance
constituted merely 6% of total premiums Ethiopian insurance represented merely 0.3% of GDP

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in 2011 - while in Kenya and Namibia premiums represent 2.5% and 8.1%of GDP respectively
(Girma et’al, 2018).

2.2 Claim settlement

Claim settlement process need to be as per requirement of the customers, so that at the time of
need, no customer should be suffered due complexity of the claim settlement process. Faster
claim settlement process reduces the cost of processing any claim whereas multiple stages in the
process should be avoided since it increases the cost of claim settlement (Yadav, R. K.2015)

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 CHAPTER THREE RESEARCH METHODS
3.1Research approach

3.2 Research design

Cross sectional Descriptive research designed will be employed in the study.

3.3 Data type and Data sources

In this study, the research proposal has aimed to explore knowledge on satisfaction of customers
towards life insurance claim settlement practices particularly in Nile insurance company life
main branches working in the in Addis Ababa and claim settlement strategies. This study will
base on primary information and the data will be quantitative in nature. The source of primary
data was life insurance customers of Nile insurance company. The data was collected mainly by
the use of a structured questionnaire.

3.4 Source and study population

The source population involves all individual life insurance customers of Nile insurance
company who are currently getting service from the company. And, the study population
constitutes life insurance customers of Nile insurance company who are visiting the insurance
company during the period of data collection.

3.5 Sampling procedure

3.5.1 Sample size
Since there is no available statistics on the total number of individual customers in the insurance
industry specifically in life insurance and the unavailability of published study on the customers’
satisfaction on life insurance in Ethiopia, the following sample size formula for unknown
population will be used to arrive at a representative number of respondents (Godden, 2004)
SS= Z2×P (1-P)
C2
Where:
SS= Sample size for unknown population
Z= z value for confidence level
P=Population proportion

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C= Confidence Interval
SS=1.962 ×0.5(1-0.5) = 384
0.52
Where: z=1.96 for 95% confidence level;
P= Population proportion 50% (0.5)

C= Confidence interval at 5% (0.05)

3.5.2 Sampling technique

3.6Data collection instrument

This research proposal will used self administered questionnaires to collect data from the life
insurance customers of Nile Insurance Company.

3.7 Data collection procedure

The self-administered questionnaire has three sections. The first section has demographic details
of the respondents, the second section assesses the dimensions of customer satisfaction whereas,
and the last section contains questions aimed at determining the overall customer satisfaction
with regards to claim settlement. The question includes a likert scale questions. The researcher
will drop the questionnaires at the life insurance office and collected them later. A follow up has
been done via telephone calls.

3.8 Data analysis

The data will be entered and analyzed using SPSS software version 25. The analysis is verified
using descriptive interpretation. Frequencies and percentages will employed by the researcher in
descriptive analysis. The data will present using tables, charts, and graphs. And both bivariate
and multivariate logistic regression technique will be used for the analysis and interpretation of
data.

3.9 Ethical consideration

The proposal will be ethically approved by Maryland international College department of master
of business administration institutional ethical review committee. Then official letter of support
will be obtained from concerned body to get permission and cooperation. The respondents will
inform about the objective and purpose of the study and verbal consent will be obtained. In
addition, they will inform about their right of not participating in the study or withdrawing at any

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time. Confidentiality will maintained by omitting their names and personal identifiers throughout
the study.

WORK PLAN
Table 1GANNT chart showing work plan for research proposal, Maryland international college, Addis
Ababa Ethiopia, January 2023

Activities Responsible body January Februar March April May June

y
p. Investigators
Proposal
development
Proposal Investigators
presentation

Questionnaire Investigators
development
Ethical review Investigators
Training Investigators
Pre-testing Investigator and
data collectors
Data collection Data collectors
Supervision Investigators and
supervisor
Data mgt, entry, Investigators
and cleaning
Data analysis Investigators
Draft thesis Investigators
Final thesis Investigators

Presentation Investigators

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 BUDGET PLAN
Table 2Budget for research proposal, Maryland international college, Addis Ababa, Ethiopia January 2023

Material Item Unit Number Needed Cost per unit Total Cost

Pack 4 500birr 2,000 birr

Paper

Duplication Page 384sample 5 birr 5,760 birr

size*at least 3
page questioner
Print (proposal ,final draft ) 1 copy 80birr 80 birr
Pack
communication minu 100 20 birr 20birr
te
Transportation 6/day 30 5 900
Pen Each 5 20 birr 100birr

Pencil and Eraser Each 6 10birr 60birr

Note book Each 3 25 birr 75 birr

Total 8,185

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 REFERENCES
Mohammed Meko Determinants of life insurance demand in Ethiopia Journal of Economics,
Business, and Accountancy Ventura Vol. 21, No. 3, December 2018 – March 2019, pages 293 –
302
Kidist Habte, factors affecting the demand for life insurance in Ethiopia, 2021 st. Mary’s
university school of business,
Damodar Basaula, Customers Satisfaction towards Life Insurance Claim Settlement in Nepal,
Janapriya Journal of Interdisciplinary Studies, Vol. 6 (December 2017)

KidistYohannes, determinants of customer satisfaction in life insurance business: the case of

awash insurance company s.c.Addis Ababa University, 2020
Masood H. Siddiqui, Analyzing customer satisfaction with service quality in life insurance
services Journal of Targeting, Measurement and Analysis for Marketing (2010) 18, 221 – 238.
doi: 10.1057/jt.2010.17 ;published online 1 November 2010

Kannan, M. (2018), Customer satisfaction towards life insurance corporation with special
reference to Chennai City, International Journal of Development and Sustainability, Vol. 7 No. 4,
pp. 1264-1272.
A. B. Sogunro, B. AbiolaMeasuring Customer Satisfaction on Life Insurance Products Case
Study: Lagos State, Nigeria, Int. J. Manag. Bus. Res., 4 (2), 73-80, spring 2014
The Determinants of Life Insurance Demand: A Focus on Saving Motives and Financial
Literacy, Asian Social Science; Vol. 9, No. 5; 2013 doi:10.5539/ass.v9n5p274, ISSN 1911-2017

Girmazeleke, Dr. N. Robindro Singh, et’a/Image of Insurance Industry in Society in Ethiopia

Srusti Management Review, Vol -XII, Issue - II, July - Dec. 2018

Kidist Admasu, challenges and prospects of life insurance in ethiopia, 2018, Addis Ababa
university

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Luqman Adedamola Sulaiman, Stephen Migiro and Tessema Yeshihareg(2015). Investigating
the factors influencing the life insurance market in Ethiopia. Problems and Perspectives in
Management, 13(2-1), 152-160
Yadav, R. K., & Mohania, S. (2015). Claim settlement process of life insurance policies in
insurance services: a comparative study of LIC of India and ICICI Prudential Life Insurance
Company. International Letters of Social and Humanistic Sciences, 49, 21-29.
https://doi.org/10.18052/www.scipress.com/ILSHS.49.21

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