Initial Negativity - A Moderator in Customer Satisfaction during the Service Recovery Process in the Life Insurance Context

Abstract

The research aims to understand how service recovery satisfactioncould lead to customer satisfaction by exploring the antecedentsof service recovery satisfaction and considering the moderatingrole played by initial negativity experienced due to service failure.A conceptual model assuming the linkages between interactionalfairness, operational fairness & problem solving orientation oncustomer satisfaction mediated through recovery satisfaction and
moderated by initial negativity feel of customers was developedand tested on customers of life insurance products in Kerala.Responses from 250 randomly selected life insurance customers,who had experienced a service failure belonging to the publicsector and private life insurance companies were collected using
a structured questionnaire, which captured their perceptions oncertain relevant indicators capable of measuring the latentvariables. A variance based Structural Equation Modelling(SEM) approach was adopted to explore the significant linkagesin the proposed model. The critical role of the antecedents ofservice recovery satisfaction and its mediating effect in creatingcustomer satisfaction would provide strategic insights topracticing managers to retain customers, in the event of a servicefailure. The study could empirically establish that, initialnegativity feel due to service failures had a moderating effect on customer satisfaction, which implies that the impact of service failure, can significantly modify the service recovery process.The study gathers significance when evaluated in the light of
perceived product failure of Unit linked insurance products.