Crop insurance is a main tool for coping with different adversities in farming which is an
innovation in rural areas. This study proposes an index for measuring farmer’s satisfaction levels
with crop insurance. The index is based on the American Customer Satisfaction Index (ACSI),
having been adapted to the specific needs of this research. Its validity was tested via a multistage,
stratified random sample of farmers in Fars province in Iran. The measurement model indicates
that the theoretical constructs have
adequate reliability and validity while
the structural equation
model shows a good model fit. Furthermore, the model was found to be valid for two sub-groups
of the sample, the formerly insured and the currently insured farmers. Perceived quality,
perceived value and farmer’s attitude toward crop insurance was found to have strongest effects
on farmer’s satisfaction levels. The study further confirms that customer satisfaction is the
leading factor that determines farmers’ loyalty. The results suggest that the proposed model can
also be used on past insured clients and can give insights on which dimensions to focus most,
eventually bringing them back into insurance arrangements.
