Acta Universitatis Danubius. Œconomica, Vol 16, No 3 (2020)

Abstract

The role of insurance in economic growth of an economy cannot be overemphasized. This is because insurance is a key player in the financial market which intermediates between surplus and deficit sectors in the economy. However, insurance industry in Nigeria has achieved below its potential in its one century years of existence. It is against this backdrop that this paper examines the impact of relationship marketing on word of mouth (WOM) communication in the insurance industry in Nigeria. The population of study comprises all insurance consumers in Lagos metropolis. Data was collected through the completion of questionnaire distributed to a sample of 400 policy holders selected via convenience sampling technique. Correlation and regression analyses were applied on the data collected using SPSS version 20 software. Findings indicated that relationship marketing components were positively correlated with WOM communication. The R-squared statistic revealed that 67.5% variance in the dependent variable was explained by variances in the independent variables collectively. Being a pioneering study, this paper brings to fore the significance of word of mouth and relationship marketing strategy between insurance supplier and consumer. The paper therefore recommends that insurance firms in Nigeria should adopt relationship marketing strategy to earn customer satisfaction whose consequences are both customers’ positive WOM communication and loyalty.