Developing and Testing a Hierarchical Model of Customer Perceived Service Quality for Life Insurance Services

The article attempts to empirically test a multi-dimensional and multi-level hierarchical structure of service quality in Life Insurance services in India. The study draws evidence from India to develop and compare a second-order hierarchical model with a first-order model to draw better insight into the determinants and structure of perceived service quality in Indian Life Insurance services. Five component dimensions of perceived service quality were extracted through exploratory factor analysis from a list of initially generated 38 items of service quality from literature and expert review. The five dimensional structure was then tested through confirmatory factor analysis using first-order and second-order reflective model to determine the best model of perceived service quality. The second-order reflective model was found to be of better fit based on indices of fit using AMOS ver 4.0 software. The results showed that both the first-order and hierarchical second-order models are of excellent fit after some modification based on modification indices. The second-order model was however accepted for interpretation of results since it has relatively better fit (significantly lower chi-square value and better fit indices values) and is a more parsimonious model. The results thus provide support for a multi-dimensional and multi-level hierarchical structure of service quality as suggested by Brady and Cronin (2001), third in Life Insurance services in India. The results show that perceived service quality of Life insurance services is a multi-dimensional second-order construct consisting of the primary dimensions of Service Delivery, Sales Agent Quality, Tangibles, Value and Core Service.

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