Importance of Quality Service in Insurance Sector The connection between the features of service quality and consumer fulfillment

can be identified from several studies. As per Anderson and Mittal (2000) and Zeithaml (2000), there is a connection between fulfillment and preservation of consumers. It is known to brings about a rise in the fulfillment levels of a consumer and can indicate their buying attitude and this steers the market share of a company, as noticed by Rust and Zahorik (1993) in their study on the retail banking industry, wherein they recognise the link between consumer fulfillment, retention and gains. As per Reichheld and Sasser (1990), a minor positive feedback given by a consumer can make a big difference to the income of a company. They also noticed that increased dedication will reduce the servicing expenses, marketing costs from the existing business with regard reference to the impact of consumer dedication. In the retail banking this impact is positive as proposed by Levesque and McDougall (1996) and it was also noticed that consumer fulfillment and dedication will bring a drop in servicing costs, economical information and grasping the requirements of consumers which permits competent work. When functioning is compared with anticipations, then there is a fall in service quality. However this does not translate into the thought that the quality of service is poor, it merely indicates that expectations of the consumer are not directly proportional to their requirements and hence, is likely to bring disapproval from them. All said and done, this will give the company a chance to augment their quality of service to meet the expectations of the consumer. Hence Parsuraman et al. (1985, 1988) has rightfully concluded that so as to stay in competition, which gives quality service, it is imperative for traders to grasp the implications of service quality and its determinants especially from the perspective of the consumer. Donnelly and Wisniewski (1996) and Lam (1997) feel differently and say that conjecture connected to what is critical to the consumer is created by the company but only much later, when there are divergent views on service quality and consumer fulfillment. Companies should recognise, determine and supervise the in-house aspects that bring about high levels of consumer fulfillment as proposed by several literatures. The private sector companies have established a new idea of service in both life and general insurance sectors in the time that the market stays open; and are similar in content and records to any insurance company in the world. There have been many studies which have cited evidence saying that both service quality and consumer fulfillment are distinct from each other yet their notions

are connected. However Cronin and Taylor (1992) are of the view that the above linking is ambiguous and the commotions perhaps comes from the disconfirmation standard. As per Spreng et al (1996, p.17) with one specific exchange, fulfillment is usually linked to a specific time and has been outlined as a disturbing response to an incoherent and distressing event that is the foundation for the complaint ratio. As stressed by Bolton and Drew (1991a) and Parasuraman et al. (1988) from a long-term perspective, service quality is regarded as harmonious, while satisfaction is fleeting, empirical and more oriented towards exchanges. The other important difference between the two ideas is the working of the anticipations of the consumer. As per Parasuraman et al. (1988) the forecast of what is likely to occur during an exchange is the anticipation that inspires consumer fulfillment, while a customer wants a service provider to fulfill the expectations that steer service quality assessments based on the requirements and desires of the consumer. 2.5.3 The Insurance sector- Measuring the quality of service and customer satisfaction Insurance-The dynamics of service quality The standard practice adopted to measure service quality in the insurance industry has been the use of the complaint ratio (Stafford and Wells, 1996). The complaint ratio is the ratio of complaints to premiums or policies. While this serves as a strong indicator, certain factors are not captured by this data which includes service issues faced by clients who may not have complained. Crucial areas of service delivery and customer satisfaction tend to get sidelined due to the lacuna in complete information. Local units are a key factor in delivering customized

solutions to clients and thereby raising customer satisfaction levels as has been pointed out by Yoo and Ginzberg (2003) in their detailed research paper. Localizing instead of selling standard products is one area where insurance companies can benefit in terms of realigning policies and products to suit local aspirations. The only real differentiator between insurance companies is the service that it can provide pre and post policy sale since most products are regulated by Government appointed regulators (Stanford and Wells, 1996).

Figure 3: Insurance Sector dynamics Customer satisfaction is the recognition and awareness of the benefits of a product or service as compared to his expectations of it (Oliver, 1980). The jury is still out though on how it is to be measured. Researchers like Churchill and Surprenant (1982), Bolton and Drew (1991 a,1991b), and Cronin and Taylor (1992, 1994) advocate matrices based on performance. Scholars also suggest the complaint ratio as an effective tool for the insurance industry. SERVQUAL is another tool to measure customer satisfaction and experience recommended by Parasuraman and colleagues 1988, Brown and Swartz, 1989, Bolton and Drew, 1991a, 1992b, Dabholkar and colleagues 1996, Lee and Ulgado, 1997. Service quality measures also include the Groonroos model (1982, 1984) wherein a product or service tried to match a customers expected experience of it in form and function. The products success in matching or exceeding customer expectations through the technical aspects and the expectations itself set by the communications and branding of the product and the customers engagement with it forms the core functional aspect. Though the basic need or requirement may be the main driver for a customer to choose a product or service, going to a hairdresser for a hair cut for eg., it has been known for a long time that a customers perception of quality which will ultimately lead to brand loyalty is what motivates customers to choose (Richard and Allaway, 1993).

The American model points out five variables beads on the SERVQUAL model including reliability, assurances, tangibility, empathy and responsiveness. This brings out the many aspects of quality service and expectations as noted by Zethamal, Parsuraman and Berry (1993) nad Rust and Oliver, (1994). This model produces more tangible results than the Groonrooses Nordic model. It captures and measures customer satisafaction on a host of variables rather than just one single aspect and thus the five variables listed by Zethamal, Parsuraman and Berry are the most effective service quality measures as agreed to by many researchers ( Fisk, Baron and Bitner, 1993). The customer experience is the core measure whether one adopts the Nordic model of form and function or the American RATER model (Brady and Cronin Jr. 2001). These variables include:Reliability- Promised delivery of product or service Assurances- winning a customers trust Tangibles- Resources, communication strategies, components, ingredients and equipment etc. used Empathy- caring for the customer and listening and responding to each customers needs Response- timely and effective response to solve a customers need or problem These variables apply to each situation and context in differently but are all critical aspects of measuring service quality in a more rounded manner. 2.6. Conclusion Successful organizations manage customer expectations and constantly evolve their products and services after listening to their customers. Thus is done by adopting customer centric approaches, collecting and reviewing data and responding to the demands of the market. Initiatives include maintaining customer contact, reviewing processes and policies and ensuring quality service in every aspect of the business. Success of insurance companies comes not only from its own marketing initiatives or products but from referrals and word of mouth that customers carry. It is these clients who stay with the company through good and bad times and helps companies develop brands and brand loyalty. For the company it is a win -win situation as it costs more to get a new client

than retain and existing one and a satisfied customer more than repays the company in terms of expanding a client base, product line and strengthening the brand value. On the other hand losing customers due to negative perceptions, lack of customer service, poor redressal of problems etc. can prove very costly which is why companies spend a lot of time and money keeping customers happy and loyal and adopting the quality model of Parsuramana and colleagues will serve the sector well. It can also help highlight the problem areas and thus guide companies to focus on a specific set of problems related to customer service or expectation gaps leading to higher complaint ratios. The SERVQUAL model will be used to measure the expectations and delivery of auto insurance claims and processes on the 7 point scale. Spreng and Singh (1993) point out that there is hardly any difference in the idea of service quality and customer satisfaction and the two are interlinked. Hemmasi and colleagues (1994) observe that the difficulty in distinguishing between quality of service and customer satisfaction, the actual performance indicators that come up may be measuring customer satisfaction more than actual quality of service and its delivery. The 5 variables of SERVQUAL which are also known as the RATER system are being used to gauge client satisfaction and company service in the auto insurance and claims space. The results are expected to give deep insights into customer expectations, experience and evaluation of the insurance companys auto policies, claim processing and service delivery.