In context of life insurance services in India, service quality holds greatest significance for the
customers while taking conscious or unconscious decision of binding their loyalty with a life
insurer. Customers’ level of Commitment and their Trust in life insurer also determine status of
their loyalty significantly. An interesting observation is the low strength of customer satisfaction
as a predictor of customer loyalty which is peculiar since customer satisfaction has been regarded
as an obvious step toward customer loyalty in most of the industries. The low importance of
customer satisfaction in predictive model of customer loyalty formation simply corroborates
with the higher significance of factors such as trust and commitment which make the customers
stay with their life insurer even if their level of satisfaction is poor. This is not unusual in case of
financial services as a large number of customers feel apprehensive about the security aspect as
well as returns prospect of their investments and prefer to stay with a financially stable company
that can assure them about safety of their investment along with sound returns even if the company
sometimes fail to conform to their expectation.
Customer loyalty of public and private sector life insurance seem to be same but the real picture
is somewhat different. Though, the mean scores of customer loyalty in public and private sectors
lie close to each other, the loyalty status of life insurance customers in public sector is found to
be significantly different from private sector customer loyalty which suggests that sector does
influence customers’ decision to stay with the company. Indian customers, while making their
decisions regarding financial investment, seem to be keenly considering company’s stability and
security aspects that are imbibed in the business dynamics of public sector which make them
choose LIC over other private life insurance companies