Insurance Market

Customer Perspective

The insurance sector of Nepal is on an expansion spree. In recent months, three new companies have started their operations. But whether it is in life or non-life (general insurance) sector, the companies have not focused their activities on the customer. Rather they are more centred towards their shareholders and promoters.

We need to look at the realities and also, the challenges and opportunities for these insurance companies. There are mainly three areas which measure the customer perception of the insurance industry:

- Customer perception of the insurance industry based on current experience.

- Customer perception of the kind of service which would meet their needs.

- The way in which insurance companies address and satisfy customer expectations.

Current Perspective

Based on practical experience and research, there are mainly seven complaints that customers make against insurance companies.

- Cost

- Claims

- Communication

- Transparency

- Complexity

- Poor products

- Poor selling practices

These complaints persist largely due to the apathy of the insurance companies to part away with claim amount, even in case of genuine losses. Insurance companies often try to harass the customer with a long list of queries, not communicating about exact status of the claim handling, reducing the amount of claim with a pretext of expediting the matter, adding conditions unilaterally etc. In the view of such feedback, the insurance companies have a duty to identify customer expectations and needs and then sincerely synergise the activities to satisfy the customers. There are two types of customer expectations or needs.

First, the tangible or classic needs, namely:

1) Choice

2) Better Costs

3) Better Products

4) Better Administration

Second, there are intangible needs also, which have to be taken care of. But it is very difficult to exactly identify these needs. However, some of them are:

- Desire to be treated with respect

- Desire for individual understanding

- Desire for quick solution to their problems

To summarize, it can be said that there are two fundamental assumptions regarding customer service.

First, that the customer service is actually about getting some basic thing right.

Secondly, that the process of getting these things right is entirely related with good management and professionalism.

Challenges

In my view, the most important behavioural change that the insurance companies have to undergo is to become customer focused. This has got to start with the recognition of the importance of the customers. They are the most valuable asset in any business, they are just as important as stockholders, since without them we would simply have no business at all. It is necessary that those who are at the top management level make collective effort to improve the image of insurance industry. This will require Commitment and Culture.

Commitment is needed to effect and sustain change which will deliver customer focus and customer service. There must be a culture throughout the industry wherein customer service is deeply embedded in the values of organizations and in the personal belief of everyone within them.

It is easy to talk customer focus and customer service, but it is not easy to achieve the desired level of satisfactory service. There has to be a strong involvement of People, Passion and Professionalism. Only then can insurance industry become customer oriented.

(Gupta, was till recently Asst. Manager for Nepal, National Insurance Company Ltd. before being transferred to Chandigarh, India.)

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