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

1 Chapter 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: 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 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 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) 5 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 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 9 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: 10 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 CRM vision: leadership, social value, value proposition • 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 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) CRM strategy: goals, market segments, effective interaction Value experiences Understanding requirement Catching expectation Satisfaction and competition Collaboration and feedback CRM processes: the life cycle of customer, knowledge management CRM information: data, analysis… CRM technology: software, architecture, infrastructure CRM mesurement: serving cost, satisfaction, loyalty, social fee 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 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 Organized coorperation Culture and organization Customer understanding Man: skill, ability Encouragement and behaviour Communicating with emoployee Partners and supplyer Philosophy Technical tool customer Strategy 11 12 2.3.6.4 Creating value for customer 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 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 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 13 CHAPTER 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: 14 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 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 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) 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 in 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 liệu: all valid responses are entered and processed with version 19.0 of SPSS software CHAPTER THE RESULT OF STUDY 15 16 4.1 The result of studying insurance business (Study 1) 4.1.1 The awareness about customer relationship management of Vietnamese nonlife 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 17 18 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 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 The result of customer survey (study 2) 4.2.2.2 Assessment of customer about commitments of the insurance company 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 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 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 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 Source: Survey data by the author, 2012 19 20 Figure 4.1: The reliability of commitment – the quality of implementing oder to determine the content and channels to provide information suitablely with each customer commitment 4.2.2.3 Assessment of customer about the quality of support service and customer care activities 4.2.3.2 The quality of commitments The insurance companies have not payed attention to support operation and The percentage of customer estimating as important and very important for the commitments of insurance company is very big In the commitments, the commitment customer care These activities are carried out spontaneously by some employees Therefore, most clients underestimate these activities The survey result also shows 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 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 not satisfy with this activity is quite high (63% -90%) compete 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 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 21 22 4.2.4 The relationship between the decision of renewing the contract of motor 4.3.4 The reality of CRM with creating experience for customer: insurers have not really payed attention to create experience for customer, the assessment of customer about service that they experienced is not high 4.3.5 The reality of CRM with creating value for customer: CRM activities in creating value for customer are fragmented, inefficient 4.3.6 The reality of CRM with customer lifecycle management: CRM system have not supported efficiently in finding potential customer and persuaded customer The customer’s assessment on the reliability, quality of the factors that insurance companies use to convince customers is low 4.3.6.1 The reality of CRM to maintain and develop client: CRM activities of insurers have little significance for maintening and developing client vehicle physical insurance of client and the client's assessment about the quality of insurers’s CRM With α = 0.05, the test result when chi-square allows to draw conclusion about the factors related to the decision to renew the insurance contract of customers including: the quality of information that customers get before insuring; the confident level of commitments that customers get before insuring; the quality of implementing commitments of the insurance company in the process of performing contract; the quality of support activities and customer care of insurance companies in the process of performing contract; the quality of operations of insurers when incurred loss; the evaluation of customer about satisfaction of customer about insurance company’s staff 4.2.5 The factor governing the decision to renew the contract of customers insured motor vehicles physical Among the factors that customers consider as most important in deciding to renew contract, the factor related to the company's commitment is mentioned the most for the customer incurred loss or not 4.3 Conclusion on the status of customer relationship management in business of motor vehicle physical insurance in Vietnamese insurers From the result of the Research (study insurers) and Research (study consumers) it can draw some conclusions on the status of customer relationship management in business of motor vehicle physical insurance of Vietnamese non-life insurers as follows: 4.3.1 The reality of strategy of customer relationship management in business of motor vehicle physical insurance: no clear strategy and no strategic orientation about customer relationship management in system 4.3.2 The status of activities of construction, management and exploitation of the client database: software (software modules) of customer management and customer database system have not cared to set up and exploit to the purpose of customer relationship management 4.3.3 The reality of CRM with client portfolio management: Most insurers have not interested in performing 23 CHAPTER PROPOSAL AND RECOMMENDATION 5.1 The strategy of customer relationship management in business of motor vehicle physical business Base on research findings on the status of strategy of customer relationship management in business motor vehicle physical insurance and findings drawn from customer research, the author proposes strategic direction of customer relationship management in business of motor vehicle physical insurance: commitment and implementation of commitments about personalize value for each customer 5.2 The content of CRM 5.2.1 Building and mining customer database Customer database system must be built and mined not only implements the operation in the insurance business but also aims to establish and maintain relationship with clients, to help adjusting the provision of personalized service for each client To accomplish this, the thesis points out the fucntional requirements of the customer database; requirements for information of clients database system; sources of information; requirements of technology and information infrastructure; solutions related to data updating operation; solutions related to management, mining database customers 5.2.2 Managing client portfolio Through the CRM system, the enterprise classifies customer into three groups: customers have high loss, customer have average loss and consumer have low loss Through this classification, insurers need to set its own policy on relations with each group of customer and individual In addition, the classification of customer according to the demographic characteristics (age, education level, feature of car’s owner; purpose for using vehicle) will also support the implementation of CRM solutions for with each client 5.2.3 Creating experience for customer CRM system should help to create a better experience for customer, support to make customers feel good about the value that insurers supply to customers insured motor vehicle physical CRM systems involved in creating experiences for customers of the quality of information, quality of staff contacting with client, the interaction with the system software, the interaction with the physical environment in the point of contact, quality of related service 5.2.4 Creating value for customer 24 The core issue help win, maintain and develop customer is creating and providing significant value to customer The thesis points out CRM solutions to help CRM system involve in the provision of value for each customer of motor vehicle physical insurance service through core service factors, additional service, business process associated with CRM, human factor, physical environment, network transaction 5.2.5 Managing the customer lifecycle 5.2.5.1 Winning customer Through customer database system, the enterprises look for potential customers, and the CRM system will also support converting potential customers into actual customers of service of motor vehicle physical insurance 5.2.5.2 Maitaining and developing customer The thesis points out the operations of customer relationship management to maintain and develop client in stages: choosing customer to renew the contract elements create value and support to persuade customer to renew contract opportunities and methods to develop customer 5.3 These factors support the implementation of customer relationship management In business of insurance service in general and services of physical insurance in particular, human plays a key role that dominant the quality of service Therefore, to successfully implement the strategy of customer relationship management, insurance businesses need change human factor on two aspects of awareness about CRM and implementation of CRM oriented business 5.3.2 The business process of motor vehicle physical insurance associated with CRM activity To implement CRM activities effectively, Vietnamese insurers need to adjust the service process associated with customer relationship management The service process of motor vehicle physical insurance includes three stages: The process of insurance business Finding customer and signing contract - Tìm kiếm KH - Đánh giá KH - Hỗ trợ Implementing the contract - Finishing and renewing the contract Cung cấp DV hỗ trợ Chăm sóc KH Hỗ trợ Customer relationship management Đánh giá, phân loại KH Hỗ trợ thuyết phục KH 25 Figure 4.1: The process of implementing the service of insurance coordinated with CRM 5.3.3 Technology for CRM activities The thesis also shows some factors related to technology in order to ensure the implementation of customer relationship management strategy: the compatibility between CRM software and system of information insfrastructure, and other equipments on the whole system of insurance businesses 5.4 The limitations of the study and proposal for further research Due to limitation of time, funding and other resources as well as the experience of the author so the thesis still has some limitations: Limitation 1: In studying the insurance businesses, collecting data through interviews of personnel of insurance companies working in Hanoi without interviewing personnel working in insurance business in other areas The next researches should focus on studying the reality of customer relationship management of each specific business Limitation 2: For customer research, the sample is selected based on a list of clients providing by some of insurance companies in Hanoi therefore only accessing to customers in Hanoi and some neighbor provinces The next researches should invest more time and resources to be able to select and carry out the research on a larger sample and have the representativeness for overall research better Limitation 3: Due to limitation of original resource so the author has not accessed to many sources of data for research overview The next researches should attempt to reach more complete than the studies related topic Limitation 4: The solutions of customer relationship management in the thesis that are only general orientation solutions for the insurance businesses in Vietnam The next researches should focus on the context of each specific insurance businesses in order to have solutions of customer relationship management for each business Limitation 5: Based on the research result of business insurance and customer, the thesis shows oriented solutions for customer relationship management in business of motor vehicle physical insurance for Vietnamese insurers In the next studies, when associated with a particular business, the proposed solutions should be presented in more detail [...]... interested in performing 23 CHAPTER 5 PROPOSAL AND RECOMMENDATION 5.1 The strategy of customer relationship management in business of motor vehicle physical business Base on research findings on the status of strategy of customer relationship management in business motor vehicle physical insurance and findings drawn from customer research, the author proposes strategic direction of customer relationship management. .. specific insurance businesses in order to have solutions of customer relationship management for each business Limitation 5: Based on the research result of business insurance and customer, the thesis shows oriented solutions for customer relationship management in business of motor vehicle physical insurance for Vietnamese insurers In the next studies, when associated with a particular business, the... insurance in Vietnamese insurers From the result of the Research 1 (study insurers) and Research 2 (study consumers) it can draw some conclusions on the status of customer relationship management in business of motor vehicle physical insurance of Vietnamese non-life insurers as follows: 4.3.1 The reality of strategy of customer relationship management in business of motor vehicle physical insurance: no clear... management in business of motor vehicle physical insurance: commitment and implementation of commitments about personalize value for each customer 5.2 The content of CRM 5.2.1 Building and mining customer database Customer database system must be built and mined not only implements the operation in the insurance business but also aims to establish and maintain relationship with clients, to help adjusting... effectively, Vietnamese insurers need to adjust the service process associated with customer relationship management The service process of motor vehicle physical insurance includes three stages: The process of insurance business Finding customer and signing contract - Tìm kiếm KH - Đánh giá KH - Hỗ trợ Implementing the contract - Finishing and renewing the contract Cung cấp DV hỗ trợ Chăm sóc KH Hỗ trợ Customer. .. governing the decision to renew the contract of customers insured motor vehicles physical Among the factors that customers consider as most important in deciding to renew contract, the factor related to the company's commitment is mentioned the most for the customer incurred loss or not 4.3 Conclusion on the status of customer relationship management in business of motor vehicle physical insurance in Vietnamese. .. working in insurance business in other areas The next researches should focus on studying the reality of customer relationship management of each specific business Limitation 2: For customer research, the sample is selected based on a list of clients providing by some of insurance companies in Hanoi therefore only accessing to customers in Hanoi and some neighbor provinces The next researches should invest... service in general and services of physical insurance in particular, human plays a key role that dominant the quality of service Therefore, to successfully implement the strategy of customer relationship management, insurance businesses need change human factor on two aspects of awareness about CRM and implementation of CRM oriented business 5.3.2 The business process of motor vehicle physical insurance. .. service, business process associated with CRM, human factor, physical environment, network transaction 5.2.5 Managing the customer lifecycle 5.2.5.1 Winning customer Through customer database system, the enterprises look for potential customers, and the CRM system will also support converting potential customers into actual customers of service of motor vehicle physical insurance 5.2.5.2 Maitaining and... insurance businesses 5.4 The limitations of the study and proposal for further research Due to limitation of time, funding and other resources as well as the experience of the author so the thesis still has some limitations: Limitation 1: In studying the insurance businesses, collecting data through interviews of personnel of insurance companies working in Hanoi without interviewing personnel working