The purpose of this study is to investigate impacts of service quality on customer satisfaction in selected insurance companies on Bale Robe Town. Since, service quality model was especially developed to examine the quality service of insurance; researchers selected this model to extensively test retail insurance industry. The current study measured service quality and its relation with customer satisfaction in the selected public and private branch. Exploratory method used as the research method of the study. The sample consists of 268 respondents’ selected based on random sampling procedure. The dimensions of the study were tangibility, reliability, responsiveness, assurance and empathy.Primary data were collected by using 5-point Likert scale questionnaire and interview with customer service managers and customer service supervisors of the selected insurance companies. A total of 226 questionnaires were properly filled and returned. The empirical result shows that service quality dimensions; assurance, empathy and reliability have strong influence on user’s satisfaction level respectively and weak impact with tangibility and responsiveness to user’s satisfaction level in selected insurance companies in Bale Robe Town. Correlation and multiple regressions were used to investigate the relationship between dependent and independent variables. The correlation results indicate that there is a positive correlation between the dimensions of service quality and customer satisfaction. The results of the regression test showed that offering service quality have impact on overall customer satisfaction. The research proves that assurance, reliability and tangibility have strong influence on user’s satisfaction level respectively and weak impact with empathy and responsiveness to user’s satisfaction level in selected insurance companies in Bale Robe Town. Thus study concluded that service quality, if managed effectively, can contribute significantly towards customer satisfaction.
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