Customer relationship management in motor vehicle physical insurance business in Vietnamese non-life insurance companies

Because of above reasons that the author decides to choose the topic of "Customer relationship management in motor vehicle physical insurance business in Vietnamese non-life insurance co

Chapter 1

INTRODUCTION

1.1 Choosing a topic:

Today, businesses tend to focus on establishing, maintaining and exploiting the

customer relationships rather than expanding market share Therefore, relationship

marketing and customer relationship management are the issues that scholars as well

as businesses are interested in researching In Vietnam, the theory of customer

relationship management is still fairly new to both researchers and applications The

awareness of customer relationship management is still incomplete

The foreign insurers have just participated in the field of non-life insurance in

general and the field of motor vehicle insurance in private in a short time (after

2007) However, with experience and the ability in business professionally, the

growth rate of foreign insurers is higher than the Vietnamese insurers This requires

the Vietnamese business of non-life insurance should seek measures to preserve and

maintain customers

In non-life insurance products, motor vehicle insurance account for a large

proportion Customers choosed the motor vehicle physical insurance that are often

clients of other insurance products In fact, there is no barrier for the conversion of

insurer of customer choosed the motor vehicle physical insurance With the

competing attraction of the foreign insurance companies, the risk of losing customers

choosed motor vehicle physical insurance of Vietnamese non-life insurers is large

Therefore, customer relationship management in business of motor vehicle physical

insurance has a very great meaning for maintaining the customer stability of Vietnam

insurance enterprises

Because of above reasons that the author decides to choose the topic of

"Customer relationship management in motor vehicle physical insurance business in

Vietnamese non-life insurance companies" as Dotoral thesis

1.2 The background of research

1.2.1 An overview of the service of motor vehicles physical insurance

Motor vehicle physical insurance is a type of voluntary insurance for physical

damage caused by sudden and unexpected accidents, beyond the control of the

vehicle’s owner or driver All motor vehicle owners are current or potential

customers of service of motor vehicles physical insurance The business process of

service of motor vehicles physical insurance is implemented through three stages:

Signing a contract; performing the contract; ending and renewing contracts

Characteristic of motor vehicle physical insurance: the relative flexibility of the agreement between the insurance company and customers Premium is determined by value of vehicle that multiplies by the premium rate Value of vehicle insured will be provided when representatives of the insurance company negotiates and agrees with the client Customers can also insure 100% value of vehicle or lower (then the responsibility of the insurance company also reduces correspondingly) The percentage of basic premium is determined based on the years of using vehicle, purpose of using and type of vehicles (passenger car, bus, truck ) The level of the motor vehicle physical premium rate is identified about 1.25% - 4.5% value of the vehicle by Vietnamese insurance companies

In addition, the customer can also decide to participate in or not some additional terms: not excluding depreciation, hydraulic jack, choice of repair facility Thus, in the process of negotiating insurance contract, in addition to the basic insurance terms, insurance operating personnel should also deal with and agree with the customer about the additional conditions and terms

1.2.2 The market of service of motor vehicles physical insurance in Vietnam

The potential of the market of service of motor vehicles physical insurance in Vietnam is huge for two reasons: first, high growth of motor vehicles (average increase

by 33.2% in 2006-2010), and second, the current rate of participation of motor vehicle insurance of the owners is low (15% for motorcycle and 85% for car, some cars that have physical insurance are only about 30%, the number of motorcycles that have physical insurance are inconsiderable proportion) Motor vehicle insurance accounts for

a large proportion in insurance business (with 27.81% of the original premium revenue

of the whole industry) with a turnover of 6,329 billion in 2012 (in which civil liability insurance reaches 1,606 billion, the rest is mainly physical insurance revenue of motor vehicles) Claims cost in the motor vehicle sector is quite large In 2012, compensation costs by 53.44% of sales Ratio of compensation cost in the motor vehicles physical insurance is even bigger (about 70% of sales) This shows that although the effectiveness

of service of motor vehicles physical insurance business is low, this is a potential business sector to grow so the race of gaining the market share of insurance businesses is pretty tough Until 2012, the non-life insurance market in Vietnam includes 29 companies,

in which 18 Vietnamese enterprises and 11 foreign insurance companies According

to the 2012 report of the Association of Vietnamese Insurer, domestic insurance

companies still dominate the motor vehicle insurance market with 93.32% market

share Although the foreign insurers have just participated in business in Vietnam

(after 2007), also penetrated the market rapidly and growed with remarkable speed

In 2011, the average growth rate of Vietnamese insurers is 17.56% while the average

growth rate of foreign insurers is 55.23% The foreign insurers have experience,

professional activity, prestige so quickly gain the support of Vietnamese customers

Currently, the foreign insurance companies have not yet really focused on service of

motor vehicles physical insurance in Vietnam but when they are interested in this

service, the pressure on the Vietnamese insurers will be very heavy

While Vietnamese insurers still absorb with competitive tool by price and

control the effectiveness by cutting compensation cost, the foreign insurance

companies enhance the competition by quality of services and accept compensation

costs to improve the quality of loss recovery activities Facing to competed pressure

of the foreign insurance companies, the Vietnamese insurers have no other way

besides improving the quality of services, implementing the strategies and solutions

to maintain and develop customers

1.3 Research purposes:

The thesis is undertaken because of some purposes:

Synthesizing, analyzing and providing the basic theory of customer

relationship management by general and most complete approach

Researching, estimating the status of customer relationship management in

the motor vehicle physical insurance

Business in Vietnamese non-life insurers; customer’s wishes choosed motor

vehicle physical insurance about activity of customer relationship management of

insurance companies These findings, knowledge will be the basis for insurance

businesses building strategy and solution of customer relationship management in

motor vehicle physical insurance business as well as other non-life insurance

products

Identifying the strategic direction and solution of customer relationship

management in motor vehicle physical insurance business in Vietnamese non-life

insurance businesses

1.4 Subject and the scope of research

Subject of research:

 Vietnamese non-life insurance businesses: Exploring the operation of

customer relationship management in motor vehicle physical insurance business of

Vietnamese non-life insurance businesses and awareness of Vietnamese insurance companies about customer relationship management

 Customer choosed motor vehicle physical insurance: Learning the perception and evaluation of customer choosed motor vehicle physical insurance in Vietnamese insurance businesses and behavioral characteristics of clients choosed motor vehicle physical insurance (related to activities of customer relationship management) Motorcycle physical insurance revenue and other non-motorized means are inconsiderable Therefore, the thesis only focuses on researching the customers that have car physical insurance

Scope of research:

 In term of geographical: focus on Hanoi and neighboring provinces

 On the subject of research: operation of customer relationship management that has car physical insurance

 On the issue of research: the thesis focuses on researching the operation of customer relationship management in motor vehicle physical insurance business of Vietnamese non-life insurers; Perception and expectation of customers choosed motor vehicle physical insurance about activity of customer relationship management

of the enterprises and behavioral characteristics of clients choosed motor vehicle physical insurance (related to customer relationship management)

 In term of time: All of the studies were carried out in four years from 2009

to 2012 Activity of primary data collection (customer survey and in-depth interview with personnels of the insurance companies) was conducted in 2012 (from August to November) in order to collect the most updated information

Methodology of study:

 In addition to desk research, two methods of qualitative research and quantitative research are used in research to complete the thesis

1.5 The new contributions of thesis:

The new contributions about academic and theoretical aspect

Detecting the desired level of customer about customer relationship

management in motor vehicle physical insurance business of Vietnamese non-life companies on the group of factors: the quality of information that customer received before insuring, the quality of implementation of the commitments of the insurance company, support activities and regular customer care, the quality of activities of insurance company when incurred loss, the quality of the insurance company's personnel (compare

to group of customers that incurred loss and the one that have never incurred loss)

Detecting some behaviour characteristics of customer participated

motor vehicle physical insurance: the passive of the insured, the level of

preference about contact methods to insure, the factors governing the

decision to purchase insurance and the choice of transacting to enterprises/

mining employee insurance

Detecting the biggest dominant factor for decision of renewal the motor vehicle

physical insurance contract of Vietnamese customer: the commitments of the

insurance company

The new proposals have withdrawaled from the study result:

Pointing out: the reality in awaring of managers and staffs in Vietnamese non-life

insurance companies about CRM: incorrect and incomplete

Pointing out the reality of implementing the CRM activities in motor vehicle

physical insurance business in Vietnamese non-life insurance companies:

there is no clear strategy, operation of customer relationship management is done

scatteredly in different parts, lack of cohesion between departments and units in

the implementation of customer relationship management

The strategy of customer relationship management in motor vehicle

physical insurance business in in Vietnamese non-life insurance companies:

commit and make the commitment of personalized value to each customer

The solutions of customer relationship management in motor vehicle

physical insurance business in Vietnamese non-life insurance companies

includes the contents: building, management and exploitation of the

customer database system, customer portfolio management; creating

experience for customer, creating value for customer, customer lifecycle

management

1.6 Structure of thesis

The thesis is structured as follow:

Chapter 1: Introduction

Chapter 2: Overview of Research

Chapter 3: The content and methodology of study

Chapter 4: The result of study

Chapter 5: Proposal and recommendations

Figure 1.2: Structure of thesis

CHAPTER 2 OVERVIEW OF RESEARCH

2.1 The review of researchs on customer relationship management in insurance

business

In Vietnam, the author has not found any studies about customer relationship

management in insurance business that is published Studying result of abroad

resources shows that there are three published studies related to the field of customer

relationship management in insurance business The research involves a number of

issues: the impact of customer relationship management to insurance customer’s

loyalty; awareness of customer relationship management of employees in insurers

and customers, the evaluation criteria with the operation of customer relationship

management in the insurance sector

2.2 Overview of research related to the field of motor vehicle physical insurance

and customer relationship management in Vietnam

2.2.1 The studies about motor vehicle physical insurance

The author has not found any studies by researchers or doctoral thesis, master

thesis about motor vehicle physical insurance that only some of student’s

dissertations related to this problem These studies also write about aspects of

professional of motor vehicle physical insurance business without any writings on the

customer relationship management in of motor vehicle physical insurance business

2.2.2 The studies on customer relationship management in Vietnam

Through studying the resources in Vietnam, the author found two large

studies of customer relationship management: monograph of "Customer

Relationship Management" by Dr Truong Dinh Chien as Editor, (2009) and the

scientific study was done at the University of Foreign Trade with the topic of

"Customer relationship management in the import-export businesses in Vietnam"

by Associate professor - Dr Nguyen Thanh Binh as chairman Besides these two

studies, the author only find that essays, thematic graduation of students and some

of articles, writing in seminars The studies only refer to a certain aspect of

customer relationship management and application of customer relationship

management in a particular field (no application in the insurance sector)

2.3 Overview of research on the theory of customer relationship management

2.3.1 Relationship marketing

Scholars analyzed and pointed out the limitations of traditional marketing with the focus on marketing tools (Ps) and showed the reasons for the trend of relationship marketing application In fact, marketing relationship is only a marketing orientation emphasized on establishing and maintaining the long-term relationship with customers, and marketing-mix is a tool to achieve the objective of relationship marketing Today, relationship marketing trend is becoming popular in the enterprises The relationship marketing associates with the introduction of customer relationship management

2.3.2 The concept of customer relationship management

The concept of customer relationship management is said from the last years of the twentieth century There are three opinion groups approached the customer relationship management

The opinion emphasized the technological element considers that customer relationship management is a method of applying information technology to use and exploit the customer database to improve the relationship marketing activity Under the perspective of business administrators, scholars define the concept of customer relationship management is a business process Under the strategic vision, customer relationship management is defined as strategic orientation linkages between business activity process of units in enterprise and the external factors that create value for customer and business together with the forming of long-term relationships with customers

In summary, with a general recognition, customer relationship management is a strategic orientation, it can dominate all levels of activities of business At the level

of general strategic vision, customer relationship management drive business leadership style, social value and value that business provides to customer At the level of business strategy, customer relationship management decides the objective of business strategy, target market selection, as well as other interactive strategies At the tactical level, customer relationship management drive the business process and operational activity In general, customer relationship management includes the principle, strategy, solution, application, system, software and idea for customer management operations efficiently Software of customer relationship management

or process of customer relationship management is just a part of the customer relationship management

2.3.3 The benefit of customer relationship management

With the different perspective approaches, the scholars stress the benefit of

customer relationship management in various aspects However, we can aggregate

the benefits of customer relationship management including:

• Firstly, customer relationship management will help improve the efficiency

of interaction between customer and enterprise

• Secondly, customer relationship management helps businesses choose target

market appropriately

• Thirdly, customer relationship management reduces sale costs

• Fourtly, customer relationship management mantains and enhances the

benefit of customer

• Fifthly, customer relationship management mantains and enhances the

loyalty of customer

• Sixthly, customer relationship management enables the enterprise to

evaluate the level of profitability of customer

In short, customer relationship management will aim to create the supplied

value for customer, create the customer’s satisfaction, maintain and create loyal

customer

2.3.4 The patterns and level of customer relationship management s

Model IDIC: (Peppers và Rogers,1996): This model indicates that to build

tight relationship with customer, the company needs to take these four steps:

identifying the customer, classifying customer, interacting with customer and

personalizing customer

Model of CRM value chain (Francis Buttle, 2004): This model shows the key

operations (analysing customer portfolio, identifying loyal customer, developing

network, developing value proposition, managing lifecycle of customer) and

supportive activities (leader spirit and culture data and information technology,

people, process)

Model Payne (Payne & Frow, 2005): This model identifies five core

processes in customer relationship management: process of strategic development,

value creation process, integrated multi-channel process, effective assessment

process, information management process

Model Garthner (Buttle, 2009): This model considers that to succeed in

customer relationship management (CRM), the company needs to have ability to

perform problem: identifying CRM vision, developing CRM strategy, creating

valuable experiences, organizing to coordinate the departments in enterprise as

well as the cooperation with outside forces; managing CRM process, relating to the life cycle management of customer and understanding; information management; CRM technology, CRM measurement

Figure 2.3: Model Garthner

The model Garthner shows the overview about customer relationship management from strategic vision to specific operation It can be said customer relationship management can dominate all activities of enterprise at many different levels

CRM itself can be seen as a business philosophy, business strategy, tool, technique using in establishing and maintaining profitable relationships with customer At the highest level of management, CRM represents business-oriented philosophy on building and exploiting beneficial relations with customer At the strategic level, CRM is a business strategy as the foundation for plans and action programs aimed at building relationships with customer At the operational level, CRM is the tools, the techniques and technologies used in the search, preservation and exploitation of customer At this level, the emphasis is the role of information technology in the collection, analysis and data mining to build relationship with

customer

Technical tool

Strategy Philosophy

2 CRM strategy: goals, market segments, effective interaction

1 CRM vision: leadership, social value, value proposition

5 CRM processes: the life cycle of customer, knowledge management

6 CRM information: data, analysis…

7 CRM technology: software, architecture, infrastructure

8 CRM mesurement: serving cost, satisfaction, loyalty, social fee

3 Value experiences Understanding requirement Catching expectation Satisfaction and competition Collaboration and feedback

4 Organized coorperation Culture and organization Customer understanding Man: skill, ability Encouragement and behaviour Communicating with emoployee Partners and supplyer

2.3.5 The forms of customer relationship management

Francis Buttle (2009) says that there are four types of customer relationship

management: strategic CRM, operational CRM, analytical CRM and collaborative

CRM Here we will look at each form of customer relationship management

2.35.1 Strategic CRM: focuses on developing business culture in which

customer is center

2.35.2 Operational CRM: automatically performs the direct transactions

with customer and supports business activities The CRM software

applications allow to execute automaticcally and coordinate activities:

marketing, sales and service

2.35.3 Analytical CRM: relates to the collection, storage, processing,

exploitation, distribution and reporting customer database to improve the

value for customer and enterprise

2.35.4 Collaborative CRM: adjusts strategy and measures of various

businesses in the value chain to enhance the benefit of identifying,

attracting, maintaining and developing client

2.3.6 The content of customer relationship management

According to the theory of F.Buttle (2009), the content of customer

relationship management includes:

2.3.6.1 Building and managing customer database

The content of building and managing customer databases includes: deciding

the feature of database, defining information requirement, identifying source of

information, choosing technology and hardware, collecting and storing data,

managing and exploiting the database

2.3.6.2 Customer portfolio management (CPM)

CPM focuses on optimizing business by selling the different valuable benefits

for group of customers based on customer data Customer portfolio management

helps: market segmentation, sales forecasting, calculating the cost of customer

service, assessing the lifetime value of customer, improving the efficiency of

customer database mining

2.3.6.3 Customer experience management

Customer experience is a result of valuable awareness about what customer get

when interacting with personnel, process, technology, product, service or operation of

the company The implementation of CRM strategies and deployment of CRM

technology can bring significant impacts to experience of customer

2.3.6.4 Creating value for customer Francis Buttle (2009), supplying value is the public commitments or secrets of enterprise to their client, it is represented by the value of the benefit that company gives them These sources that create the value for customer include: value from product, value from service, value from operational business process, value from human factor, value generated from the physical environment, value from the communication activities, value from the distribution system CRM helps to create personalized values for each client thus increases revenue and competitive advantage for business

2.3.6.5 Customer lifecycle management CRM implements activities to: attract new customer (identifying potential customer, target customer, identifying methods of approach and providing value to them), maitain customer (meeting the need of customer to prevent customer leaving the company); develop customer (increasing the value of existing customer)

2.3.7 The process of customer relationship management

There are many different perspectives on the process of CRM With universal approach considered customer relationship management as a business strategy, Francis Buttle (2009) considers the process of customer relationship management as developed process of project consisting of 5 stages: CRM strategy development, building the foundation for CRM project, defining requirements and selecting partner, implementing project and evaluating the project results

2.3.8 Customer relationship management in the insurance business

2.3.8.1 The characteristics of client insured

• Customer is usually passive in buying insurance

• Customer is often uncertain about his benefit when insured

• Customer appreciates the brand elements of the insurance company

• Customer tends to prefer dealing directly

• Customer has difficulty in assessing the value of insurance product

• Customer wants process of claim simpler

2.3.8.2 The characteristic of customer relationship management in the insurance business in Vietnam

Features: personalization trend, trend of focusing on finding new customer, method

of maitaining customer, the characteristic of cross-selling, CRM characteristic through the implementation phases

CHAPTER 3 THE METHODOLOGY OF STUDY

3.1 The viewpoint of approach and content of research

The thesis studies customer relationship management follow the theory of

Francis Buttle Accordingly, the research content of customer relationship

management includes: CRM strategy and the contents of the CRM implementation

In view of this approach, the content frame of research topic follows:

Figure 3.1: the content frame of research

Study 1: Current status of customer relationship management in business of

motor vehicle physical insurance in Vietnamese insurers The targets of this study

are:

Learning the awareness of the insurance company for customer relationship

management

Exploring the status of customer relationship management in business of

motor vehicle physical insurance of Vietnamese non-life insurance company

Study 2: Researching customer to build strategy and solution of customer

relationship management in business of motor vehicle physical insurance in

Vietnamese non-life insurers This study aims at the following objectives:

Learning the perception and evaluation of customer on customer relationship

management in business of motor vehicle physical insurance

Learning the desires of customer choosed motor vehicle physical insurance

for customer relationship management

Learning the behavioural characteristics of customer (related to customer

relationship management)

3.2 Methodology of study

3.2.1 Research 1: Studying the insurance business Research method: qualitative research method and data collection method

based on deeply personal interview

Respondent: leader and staff of Vietnamese non-life insurance company, those

who work in positions related to business of motor vehicle physical insurance

Sample includes 30 people in the different positions of 6 insurers

Collection of information: bases on the guide of interview that is designed

before

Data Processing: Text data has been compiled from the transcribed notes and

tables with interview content All data collected through the interview process is entered into MS Excel software to filter and find the keywords that identify important information for the study

3.2.2 Research 2: Studying customer

Stage 1: Desk research: Studying literature in order to identify the matters

that client choosed motor vehicle physical insurance that concerned about customer relationship management and to determine the oriented content of in-depth

interviews

Stage 2: Preliminary Study: Performing in-depth interview with client to

develop the research questions

Stage 3: Pilot study: Investigating 20 customers to modify and complete the

survey questionaire

Stage 4: Official Research Sample: From the list of customers provided by

the insurance company, building list of interviewees sorted by descending order of the insured period, selecting 1 in 3 customers to call to persuave them answer to the questionnaire Calling to persuade customers will stop when there are 700 customers that had incurred loss and 700 customers have never had loss that agree to answer the questionnaire

Methods of data collection: sending questionnaire by post to clients who agreed to answer the questionnaire

Xử lý dữ liệu: all valid responses are entered and processed with version 19.0

of SPSS software

CHAPTER 4 THE RESULT OF STUDY

4.1 The result of studying insurance business (Study 1)

4.1.1 The awareness about customer relationship management of Vietnamese

non-life insurance business

4.1.1.1 The awareness about the concept of CRM

All the respondents have not awared truly and completely about customer

relationship management It has been suggested that customer relationship

management is just an activity of the department rather than an activity should be

performed in a consistent manner across the enterprise

4.1.1.2 The awareness about the benefit of CRM

Respondents have just mentioned some benefits of customer relationship

management and showed that they have not awared properly and fully about the

inherent benefits of customer relationship management

4.1.2 Implementation of CRM in motor vehicle physical insurance in

Vietnamese non-life insurance businesses

4.1.2.1 On the strategic direction of customer relationship management

Leader and staff in various positions answer about the strategic direction of

CRM of their businesses that are different This shows that, at present, the

Vietnamese non-life insurers have not had the strategic direction of customer

relationship management clearly

4.1.2.2 Current status of management software for enterprises with CRM operation

in business services of motor vehicle physical insurance

Currently, all of Vietnamese non-life insurance companies have

management software However, the features and the exploitation of software for

the purposes of customer relationship management are not payed attention by

businesses The softwares mainly focused on the implementation of the

professional of insurers

4.1.2.3 The status of client database system The insurance companies store some information about car’s owner and car that insured However, this information only serve the purpose of conducting insurance operations, but not enough to use for the activities to establish and maintain relationship with client Moreover, the insurance company is not paying attention to the construction of the database system and mining customers, management, sharing customer data for the purpose of customer relationship management Moreover, the insurance companies have not payed attention to build the database system and mining, management, sharing customer data for the purpose of customer relationship management

4.1.2.4 Winning customer and CRM Most of the customer winning of insurance companies based on personal sales activity The result of this operation depends largely on the efforts of saleperson CRM system of enterprises has not promoted the effect in winning customer

4.1.2.5 The operation of customer relationship management in the process of performing insurance contract

During the process of performing insurance contract, CRM activity consists of two main types of activities as regular customer care and customer service when incurred loss The activity of regular customer care only focuses on some big customers However, these activities are spontaneous and scattered The retail customers are not hardly payed attention When customers have incurred loss, the insurance companies almost exclusively focus on implementing business without paying attention to the care and creating more supplied value for customer

4.1.2.6 Developing customer

In insurance companies, mining client for the purpose of selling insurance products of motor vehicle physical has not been focused so the effect is low The companies have not had programs to maintain and exploit opportunities to create value from existing customers

4.1.2.7 CRM with the renewal of contract of motor vehicle physical insurance The renewal of the contract of insurance companies relies on the efforts of mining personnel and agents The businesses rarely use customer database as a basis to adjust the insurance package as well as provide information and perform

support activities for mining employees, agents to convince customers have

contract renewals CRM system of insurers has not been effectively exploited for

the purpose of promoting renewal insurance contracts

4.2 The result of customer survey (study 2)

4.2.1 Some behavioural characteristics of customer that insured motor vehicle

physical

4.2.1.1 The passive in deciding to purchase insurance

Insured clients have high passive Only 9.7% of customers had incurred loss and

10.9% of customers have not had loss who replies that they are active to buy

insurance However, between different customer groups (for education, purpose of

using car .), the percentage of people actively choosed motor vehicle physical

insurance is also different

In the dominant reasons to the decision of insuring motor vehicle physical, the

rate of most influential factor to customer is the impact of mining personnel, followed

by the impact of relatives, friends, the rate of self-aware customers have insurance,

the impact of trade information sources, requirement from the bank, partners are quite

low

With customers who buy insurance actively, they contact to a company /

operating personnel due to the impact of factors: the introduction of friends, relatives,

relationships from previous time, searching on the internet, source of commercial

information; trust in the brand (the above elements arranged in descending

percentage)

4.2.1.2 Trading and contact method when buying the insurance

With product of motor vehicle physical insurance, the most favored commercial

transaction is in direct contact However, due to the development of technology, the

significant proportion of buyers prefer contact by telephone, internet or email

4.2.2 Evaluation of customer on the status of activities related to customer

relationship management of Vietnamese non-life insurers

4.2.2.1 The quality of information that customer get before buying insurance

In general, the assessment of customer about the quality of information that they

receive before insuring is relatively low that shows way and method of providing

information to customer before insuring has not achieved expectation of customer

The clients had incurred loss that tend to assess the quality of information received before insuring is lower than the clients had incurred loss, however, the difference is not large

4.2.2.2 Assessment of customer about commitments of the insurance company

a) The confidence level of customer with commitments before insuring

For customer, the level of trust in the commitment is the main factor governing the decision to sign insurance contract with insurer or even decide to select employee/ agent to sign contract Although insuring, customer’s evaluation about the reliability of commitments received before insuring is not high (the average value in the range 3 to 3.8) Organizations tend to assess the level of trust in the commitment received before insuring rather than individuals that proven organizations are often cared and convinced better than individuals

b) Assessment of clients on the implementation of the commitments of the insurance company

Evaluation of customers incurred loss about the quality of implementing commitment have considerable distance than evaluation of the one have never incurred loss about the credibility of the insurance company's commitment

Source: Survey data by the author, 2012

Figure 4.1: The reliability of commitment – the quality of implementing

commitment

4.2.2.3 Assessment of customer about the quality of support service and customer

care activities

The insurance companies have not payed attention to support operation and

customer care These activities are carried out spontaneously by some employees

Therefore, most clients underestimate these activities The survey result also shows

that the average value of the assess level of customer about the quality of support

service and customer care operation is low (average from 1.2 to 2.6) The percentage

of customers who do not satisfy with this activity is quite high (63% -90%)

4.2.2.3 Assessment of customer about the quality of the operations of insurance

company when incurred loss

The operations and customer service incurred loss that is key activities of the

insurance companies However, the quality of these activities is evaluated differently

Customer appreciates about the support activities that limit loss and support to carry

the car to the repair place, followed by the assessment and support activities, damage

assessment activities and building of compensation plans, operation of managing the

quality of repairing and acceptance, operation of guiding to complete the claim and

compensation activities are assessed at the level of fairly moderate (average point

from 3.1 to 3.43) Activity of customer care after compensating is estimated at low

level

4.2.2.4 The level of satisfaction of client about personnel of insurance companies

Customer evaluates the satisfaction level of the employees of the insurance

company that is very different, the highest is insurance operating personnel, followed

by information receive department, inspection department, compensation department

and customer care department are not appreciated highly by customes

4.2.3 The desire of customer related to activity of customer relationship

management

4.2.3.1 The quality of information that customer wants to receive before signing contract

In general, the respondents would like to receive information before insuring

with high quality However, the perception and experience about insurance of

customers are very diverse, so the CRM system should help to understand and

classify the level of understanding of customers about each type of information in

oder to determine the content and channels to provide information suitablely with each customer

4.2.3.2 The quality of commitments The percentage of customer estimating as important and very important for the commitments of insurance company is very big In the commitments, the commitment related to premium is not considered important by many customers This indicates that the imsurance mining personnels have mistakes when trying to use premiums to compete

However, every client assess the importance level of commitments is different therefore the CRM system of insurers help the staff understand that the customer focuses on the content of commitment to convince them effectively

4.2.3.3 The quality of service support and customer care activity Customers tend to think that the insurers are consultants therefore the consulting related to engineering, consulting on legal support are expected with high quality level (the average value that customer expected is 4.18 and 3.91 (the group of customers incurred loss), 4.23 and 3.86 (the group of customers have never incurred loss) Customers also express they want the insurers to warn the risk of arising loss and support the vehicle management

Not many customers express their high interest on customer care activities Customers incurred loss and not evaluate as not important for care by phone is 57.1% and 52.9% for care through letter or email is 65.1% and 57.3%; the direct contact activities is 70.7% and 63.3% Thus, customers want the service that actually create more value for them rather than the communicative, social activity

4.2.3.4 The quality of customer service operations in loss recovery process The most dominant factor to the feeling of customer about the quality of insurance service is the quality of the insurance activities of insurance companies in the process of resolving and overcoming loss Therefore, all operations in the period

of incurring loss are appreciated highly about the level of importance The activities that customer demands the most are: damage assessment and recovery plans, garage repair service - this can be seen as two directly affected operations to the quality of vehicle after incurring loss The assessment activities and support at the accident scene, supporting to solve accident; supporting to limit loss, bringing the car to a repair site, repair quality management and acceptance are assessed at the level of lower important than other activities in the process of resolving and overcoming loss