EXPLORE MEASUREMENTS

TO ADVANCE THE SERVICE

QUALITY OF
JANASHAKTHI INSURANCE
LIFE CLAIMS DEPARTMENT

Course : MBA 530: Management Field Project

Instructor :
Term : April – June 2020

1
 Chapter 1
INTRODUCTION

1.1 Background

Insurance industry is collection of companies which offers risk management practices in

the society. The concept of insurance is about one party (insurance company) guarantee a
payment for future risk event. Meantime other party (insured) will pay the premium for
transfer that protection. Life insurance provides services based on assurance but with
inadequate quality. Today there is an enormous untouched market for “Life Insurances”.
This will offer the contingency for Sri Lanka to attract the attention of overseas and local
investors to the life insurance market segment.

Today life insurancehmarket faced the rapid change of market segments, tremendous
competition,mtechnological advancements, comprehensivebchanges, and remarkably
demanding customer base. Comprehensive changes in economic activities ingglobal and
local has resulted in differentbchallenges to compete in the life insurancebindustry. In life
insurance main assetscis its client based. Therefore, it is crucial to operatevand satisfy
them in productive aspect. However, there is a disagreementgwhether insurance
companies reflected theirpcustomer adaptation in theirostrategies and day-to-day
operations.jkjkjkj

Today life insurance market, consumers are demanding on quality ofothe product and
service they receive. As there is highocompetition in the life insurance market, customers
can choose best productband efficient service provider for their life insurance solutions.
The leading way to grab the insurance market is marketpcompetition. However, insurance
companies have to focusbon the quality of service provide as it is influentialoas the
pricing and facilitiesxprovided by the insurance company. In the insuranceoindustry
clients has the ability to find alternatives without any cost, if they are not satisfied with
the current service provider. This demonstrate through the number of “lapseopolicies”
and “surrendered policies “availablebwith end of the year in relation to dissatisfied
customers.fdfdgd

Insurance companies will lost the loyalgcustomer base and the higher number of
surrender and lapsebpolices will reflect how companies are performing desperately.
Therefore, insurance companies should focus the customerostagflation as a critical task in
the business.fgffgf

2
In order to defend in the competitivebindustry, it is essential to embedded customer
satisfaction strategies in the corporate strategy. In order to follow these strategies
insurance

companies should identify how they can capture the customer mind and keep the
customer for long period with providing higher customer satisfaction.fggff

In any type of organization quality of thevservice, customer satisfaction,

customergloyalty are the key drivers for success in the competitivevenvironment. In the
insurance industry, it has become crucial aspect to capture thedhigher market share.gggg

According to the Janashakthi Insurance marketing survey done on 2018 and 2019, there is
a significant decline ingcustomer satisfaction about head office and branches. Even
though company managementbhas taken a reasonable effortbto increase thevcustomer
satisfaction level, it is observe there is audecline in satisfaction level over the last two
quarters of the company. According to the survey finding and initial study author of this
report observed there is a high customer dissatisfaction on Janashakthi life Claims
Department and it related functions.kjhkgkh

1.2 Project

The intention of this project is to take measurementbto improve service quality level of
Janashakthi Life claims department, which has already in lowbstandards than rivals. The
analyzing period is limited to 2018/2019.Janahskathi Insurance life claims
payingbprocess has evaluated and identified main causes that leads the lower level of
service quality provided to the customers.

1.3 Significance of the Study

In the insurance industry quality of the service has emerge with as a critical component of
organization. The quality of the service does not show up in the insurance industry, as it is
unable to maintain throughout the organization. According to the Insurance Regulatory
Commission of Sri Lanka, Janashakthi Insurance is facing a decline of market share over
the last five years.

The proposed study will help to recognize and evaluate the main causes affect poor
service quality of Janashakthi Insurance. It will also will help to identify the gap in
existing claim paying process such as duplication of work items, delegation of authority,
authority levels, knowledge of employees and training and development needs. Further,

3
this study will enable organization to take corrective actions to provide quality service
from life claims department and attract loyal customer base. This study will enable
management to remodel the life claims process to improve higher market share and
generate revenue to the company.

1.4 Methodology

The main source of information for the study would be the customer satisfaction survey
done by the marketing department at Janashakthi Insurance Plc. Author willhbe doing an
analysis to understand the claim-paying pattern. In addition, in-depth interviews
willucarry out with Manager – Marketing, Head of Finance & Planning, and Assistant
Manager - Human Resources in order to understand the causes and affected problem
thathbusiness is currently experiencinguand real causes of it. Further competitors in the
Sri Lanka life insurance industry will be analyze to explore the strategies they are using
touprovide higher customer satisfactionvin claims paying process. Interviews will be
conduct with Janashakthi Life head office staff to understand the life claimscpaying
process. The Ishikawa Diagram will use to identify the connection betweenggathered
information and problem recognized with relation to decreaseucustomer satisfaction of
Janashakthi life claims department.

1.5 Limitations

As the market is highly competitive and mostly due to confidential nature of information,
there isyunwillingness to providehcustomer satisfaction information survey done in
Janashakthi Insurance Plc.gfgffg

Another limitation is the studies done related to Sri Lanka insurance industry is
comparatively less than other industries. This will cause for literaturedsurvey a
challenging one.ghghght

As there is a legalhbackground with the claims process, some processesuare unable to

change due to legal obligations.ffvf

Janashakthi Insurance has staff who are working for more than 20 years. These staff
followed the same process for more than 10 years. The unwilling ness to changeythe
process is another limitationhas the claims paying process has many difficulties.nhghg

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1.6 Chapter Framework

Chapter one has providedban introduction to backgroundoof the insurance industry. This
include briefyintroduction about the problempaddressed in the project andgsignificance of
the project. Further, it includesvlimitations and methodologycof analysis of Janashakthi
Insurance.

An overviewcof the organizationuis brought forward in chapter tworwith organization

and industrialxanalysis. Further, identifiedeproblem will analyze connectinguto the
organization’s claimsvdepartment outcomes.

Chapter three discussestrelevant literature referring to the analyzedccauses and effect of

the whole studyvframework. In this chapter, author will be reviewinggrelevant
researches, books, journal articles,gand other educational materials inuorder to crate the
clear definitionsgfor each causes of the problemuidentified.

Chaptergfour describes theufew solutions to be implementbaddressing each

componentgand outcome of thegproject.

In chapter fiveuwill be containuof discussion of the findings, recommendationsbfor the

organization.

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 Chapter 2
ORGANISATIONAL ANALYSIS AND PROBLEM
IDENTIFICATION

2.1 Introduction

This chapter will discuss in detail the organizationaluprofile of Janashakthi Insurance

together with an analysisvof status which it’s operate in widerycontext using SWOT
analysis. This chaptervintends tourecognize and explain the key problemxof poor service
quality of Janashakthi claims department. Further, it will show how poor servicexquality
effects the organizationgrevenue and market share.

2.2 Organizational Profile

Janashakthi Insurance is serving the Sri Lanka lifepinsurance market for more than two
decade sinceop1994. Janashakthi is the sixth largest insuranceuSri Lanka, maintaining a
good brand image in lifeginsurance industry. Supporting a branchonetwork of 52 outlets
with highlybqualified permanent staff of moreothan 2000 employeesdand more
thanh3000 field representativespin sales and marketing. bbgbgb

The main purpose of Janashakthi LifemInsurance is “Uplifting lives and empowering

your dreams” Janashakthi Life provides life insurance servicespunder five categories;
protection and health, children,pretirement, savings and investmentsnand live life.
According to Table 1.1 Janashakthi offers, thirteenoinsurance solutions under
sixvcategorize. Very recently, Janashakthi launched smart insurancevcover for healthy
living, collaboratingvwith Ayubo life. Apart from that Janashakthi has acquiredcmajor
business partnersvsuch as Hayleys, Virtusa, MASvHoldings, Dialog,bFinlay’s, Laugh,
Dilmah and few tea plantationscnamely Udupussellawa,vHapugastenna andbWatawala.

Janashakthi Life is gonenabove and beyond its normal businessofunctions to provide

value added services to its customers. Janashakthi Insurance is the only
insurancebprovider in South East Asia regionvcovering people who are living with HIV
andmJanashakthi Insurances provides free hospitalvcover after the maturity of the police
andconly insurance company to provide maternityphospital cover for theoinsured.

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Table 2.1:Janashakthi Products Portfolio

Protection & Children Retirement Savings & Live Life

Health Investment

Janashakthi Janashakthi Janashakthi Life Janashakthi Janashakthi

Good Health Jeewitha Unlimited Cash Live Life
Advance
Thilina

Janashakthi Life Janashakthi

Saver Life
Janashakthi Janashakthi
Investment
Loan Guard Shilpa Shakthi
Account
Janashakthi
Jeevitha
Vardana

Janashakthi
Suwashakthi

Janashakthi Life
Unlimited

Janashakthi
Family Plus

Source: Author

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Business Vision, Mission andpvalues of Janashakthi Insurance have been established in
order to achievebexpectations of all stakeholdersaof the company.

Table 2.2: Janashakthi Insurance Vision, Mission and Objectives

Vision To uplifting lives and empowering your
dreams

Mission To deliver on a greater calling, - to ensure

that uplift the lives and empower the
dreams of customers, or touch indirectly
by providing the warmth of protection of
their families and loved ones , or impact in
numerous ways as our employees ,
partners and other stakeholders
Values Diversity and Inclusion
Equal Opportunity
Transparency and Best Practices
Health and Safety

2.3 Organizational Analysis

Janashakthi Life Insurance has four main functions to offer best customer service. These
functions are life sales procedure, underwriting, life servicing and claims function.

2.3.1 Sales: Janashakthi Life sales procedure;

Janashakthi life sales is the first part of insurance. This procedure has six major steps.
Starting with taking an appointment from customer, giving a quotation, once customer
agreed giving the proposal form to fill, then forwarding a proposal to head office through
branch network, taking initial premium form the customer, sending policy document to
the customer.

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2.3.2 Underwriting: Janashakthi Life underwriting procedures;
Once the sales staff send the proposal form to head office it start to evaluate to convert as
a policy. This process call Underwriting. In this process, there are nine steps. First step is
proposal received by the head office, then scrutinize the proposals, then forward it to tele
underwriting process, then analyze medical or financial requirement of the proposal, then
take reinsurance advice if needed, call for pending documents if needed, approve the
proposal form, then print the policy book, dispatch the final policy with schedule to the
customer. If customer not agreed with terms and conditions, he/she cancel the policy
within days.

2.3.3 Policy servicing: Janashakthi Life policy servicing procedure

After sending the policy book to customer, all the changes and alterations will be carried
out by Policy Holder Servicing Department. This process has seven steps .Once the
alteration or change received by the customer adviser send it to the branch, branch is
updating in the register and send it to the head office, then document intimated in the
system, distributed to the relevant staff, process the alteration or change, authorize the
document, send the endorsement to customer through register post.

2.3.4 Claims: Janashakthi claims procedure

This department is responsible for paying all the claims arising of policyholders due to
hospitalization, Death, Total Permanent Disability, Partial Disability and Critical Illness.
This process has eight steps.

First step is adviser take the relevant documents from customer send them through branch
network to head office. Then head office take the claims from the daily courier and keep
the date stamp. Then all claims will be register in the system as received by the head
office. Then start up the process, if there are any other medical or relevant documents
needed that will be request by the customer, if all documents are in order and claim is
covered under the policy conditions, claim is put in to the decision. After approving the
decision, it will authorize in the system. Daily basis finance will generate the cheques and
send it to the customer address through register post.

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2.4 Organizational Analysis

Organizational analysis carried out on Janashakthi Insurance are summarized below under

Table 2.3: Janashakthi Insurance Organizational Analysis

Strengths Weakness Opportunities Threats

Low service Low market Competition from
25 years of standard perception penetration and rivals for market
experience in towards there are more share of the
insurance industry organization opportunities in the industry
insurance market
Branch network is Centralized Competitors have
52 in island wide decision making Opportunity to start good reputation on
process as a fresh company speedy settlement
Only provides Life after departure from of claims
Insurance Not clearly defined General Insurance
KPIs for employees Other competitors
Provides wide high standards of
range of insurance Outdated claims customer service
solutions paying process
Competition from
international
competitors
Source: Author
2.4.1 Strength
Janashakthi Insurance is operating with experience of 25 years in both life and general
insurance market. From 2018 April onwards it has started to provide only life insurance
and it can use all available resources to enhance life insurance business rather investing
money to general insurance business. Janashakthi Insurance has 52 branch network island
wide to provide efficient customer service to policy holders. Janashakthi Insurance
provides wide range of insurance products to both individual and corporate customers. It
provides insurance solutions for life, heath, accident, pension, education, and retirement.

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 2.4.2 Weaknesses

Janashakthi Insurance low service standards has create drop off customer portfolio in the
organization. Janashakthi Insurance has unsolved problem with culture of the
organization. Organization does not attract new blood and capable talents to the
organization. As all the decision taken by Head of Life and GM of Life Department,
centralized decision-making process reduce the productivity of the organization. As
Janashakthi has senior staff who is working for more than 20 years they do not like to
engage in minor staff activities and there is a delay in every functions at the initial level.
Another weakness is Janashakthi Insurance is not drive by the performances and Key
Performer Indicators has not defined well to allocate work to all the staff. Issues in IT
department always resulted in reducing efficiency in service quality with system shuts
downs, too many steps to follow to pay the claims and errors in the system. These will
translate in to lower quality of service and eventually higher the customer dissatisfaction.

2.4.3 Opportunities

In Sri Lanka, there is lower insurance penetration in the market. As Janashakthi Insurance
has the ability to serve island wide lower penetration will give opportunity to attract new
customer base. If Janashakthi Insurance can improve it quality of the service, it can
improve the market share through providing higher customer satisfaction.

As Janashakthi insurance separated from general insurance market, it has the ability to
revamp the life insurance brand. This will provide new opportunities in the market to
attract new customer base.

2.4.4 Threats

Local companies in the insurance industry sell the similar product is a threat for
Janashakthi Insurance. As insurance premium increase, some customers will go for
competitors who provide quality customer service and speedy claim settlement process.
In Sri Lanka laws related to healthcare is changing time to time. This will require speedy
adjustment to the policies offer with the Janashakthi Insurance. If Janashakthi will not be
able to change, accordingly it will create a threat in the market. As well as there are
foreign insurance companies, come to Sri Lanka and provide insurance solutions with
quality customer service. These companies will create a threat to compete in the market.

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When analyze the strength of the organization, which affects Janashakthi Insurance
business it was observed that Janashakthi Insurance has a strong presence in market as it
provides wide range of products for every stage of life of customers with support of 52
branch network. Janashakthi Insurance has been recognize by the all stakeholders as a
reliable company as it is operating for 25 years in the insurance business. However,
Janashakthi Insurance has been losing potential customer base and revenue due to poor
service quality provided by the head office and branch network. Further Janashakthi life
claims department customer dissatisfaction rate is higher than other department with poor
service quality provided over the past few quarters. Janashakthi Insurance is not focus on
developing people and promoting them to the next level to take maximum out of them.
Further probable growth opportunities have not been utilized effectively due to
centralized decision-making process amongst the departments.

Therefore, Janashakthi Insurance has not been able to utilize the available opportunities
adequately when compared to the rivals in the industry. However, it can say that survival
of the organization has been established well by protecting the market share and oversee
the threats arose recently due to regulatory changes.

2.5 Key Problem

After analyzing the opportunities available to the company it can be recognized that
,Janashakthi Insurance has an enormous potential to be top in the market, maintain that
company strong intensity to reduce its weakness with deliberately created appropriate
program.

Especially the advances that develop in social factors such as modification in lifestyle,
aging population, and growing rise in non-communicable diseases will discover a
considerable opportunities for insurance solutions providers. However, these capacities to
growth has been hindered by higher customer dissatisfaction rates of Janashakthi
Insurance claims department, the customer dissatisfaction has identified by the in house
survey done by marketing department every quarter of the year 2018 and 2019.

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Figure 2.1: Customer Satisfaction Rating of Headquarters and Branch Service

Customer Satisfaction Rating of Headquarters and Branch Service

8
7.05
7 6.59
6.23 6.11
6 5.59 5.85
5.23
4.89
5
4
3
2
1
0
2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4

Customer satisfaction Rating

Source: Janashakthi Life Customer Service Survey 2019

According to the survey carried out by Janashakthi marketing department, there is a

significant decline of customer satisfaction in both head office and branch level surveys.
On the fourth quarter of 2019, It shows that customer satisfaction has gone down from
5.23 to 4.89.

Figure 2.2: Customer Satisfaction Rating of Claims Department

Customer Satisfaction Rating of Claims Department

8
7.01
7 6.45
6.11
6 5.52 5.55 5.75
5.12 4.81
5
4
3
2
1
0
2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4

Customer satisfaction Rating

Source: Janashakthi Life Customer Service Survey 2019

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Janashakthi Insurance life claims departments service quality has been reduced
significantly as well, from 5.12 to 4.81 in the fourth quarter of 2019. This should be
identified and sorted in order to maintain brand image, existing customers, and new
customers

For last few years, JanashakthioInsurance has been facing a decline inlmarket share. This
will result in losing credibility amongpother business organizations and individual
customers, which creates a negative brand image and bad reputation in the industry.
According to the 2018 annual report of Insurance Regulatory Commission of Sri Lanka
(IRCSL) Janashakthi Insurance has a marked decrease in market share from 4.06 to 3.75.

Table 2.4: Premium and Market share of Insurance companies

Source: Insurance Board of Sri Lanka. Annual Report (2018)

The management feedback is one of the key source of information that can be used to
understand the problem that company experiencing right now. Therefore, three managers
were interviewed who are dealing with this issue and are authorized to provide
information on same. Table 2.5 depicts the details of managers were interviewed during
the study.

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Table 2.5: Managers Interviewed for Data Collection

Name of the Manager Current Position Tenure in the Company

Mr. Egodawaththa T D Manager - Marketing 05 Year
Mr. Thanushka Head of Finance and 02 Years
Jayasundara Planing
Mr. W M A S Wijethunga Assistant Manager - 06 Years
Human Resources
Source: Author

2.6 Description of the Problem

Janashakthi Life insurance claims department experienced higher customer dissatisfaction

rate as this department has many problems on delay in settling claims. Author is
screening the issue and found out qualitative and quantitative data related to the problem.

According to the view points of management information as mentioned table 2,5

indicated this is a critical problem for the company. Their opinion is Janashakthi claims
department can show lower performances in settling claims by taking actions to reduce
current delays in the process.

After assessing view points of the selected team author has done a qualitative analysis and
following findings can be seen within the comoany. This information will useful to
recognize problem clearly and it will easy to find solutions by having proper
understanding about problem.

2.7 Performance Gap

The main objective of the claims department at Janashakthi Insurance is to satisfy the
customer with paying claims according to the policy conditions. However, in the claims
department there is a high rate of delay in the claim settlement process. The main reasons
of the delay is the time taken to pay the claims and inappropriate standard of claims
paying practices.
This is very considerable issue they have to faced from the long period of time. There is a
gap between expected performance and actual performance in claims paying processes.
Therefore, to ensure the current situation following findings has identified from the
claims department daily dashboard information.

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Table 2.6: Dashboard figures of incurred claims and attended claims within working
days

Attended within Attended within

Quarter Total claims incurred 1-3 days 4-8 days
2018Q1 33395 18,813 14582
2018Q2 35031 19,845 15186
2018Q3 38575 19,688 18887
2018Q4 35413 18,757 16656
2019Q1 41127 21,386 19741
2019Q2 45627 23,726 21901
2019Q3 47225 22,975 24250
2019Q4 47180 24,221 22959
Total 323573 169411 154162

Total claim incurred = 323,573

Paid within 3 working standards = 169,411

As a percentage = 323,573/169,411*100

= 52%

According to the quarterly received information from life claims department there is
323573 claims has received but only 169411 has attended within first 03 working
standards. As a percentage 52% has attednded within working standard and 48% has
failed to pay. There is a significant performance gap as claims department fail to pay 48%
of received claims within stipulated working standards. This has mainly cause for decline
the quality of claims department and higher customer dissatisfaction rate.

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2.8 Problem Analysis

The problem analysis is treated as the most crucial component of this project since it
provides the direction to identify the real causes of the problem faced by Janashakthi
Insurance claims department. The environmental analysis carried out in chapter two with
SWOT analysis provides a holistic view of the current position of the organization.
Therefore, information collected through interviews with SHL management and other
company sources was analyzed using 5W and 1H method to discover the causes of the
problem. The data analysis which was carried out, identified that there are three main
causes which have supported by another sub roots in creating poor quality of Janashakthi
Insurance claims department. Figure 2.3 illustrate the identified root causes in the
Ishikawa diagram in a summarized form.

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Figure 2.3: Causes Affected of poor quality of service of Janashakthi Life Claims
Department

Source: Author

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Out of the cusses presented in the Ishikawa Diagram, it was recognized few causes have
contributed over 80% in creating this unfavorable situation. i.e. No proper authority
limits has distributed amongst senior staff to take prompt decisions, Claims department is
following the same claims paying process for more than 10 years, There is no clearly
defined KPIs for staff in the claims department, Lack of training and development
opportunities in the department and Not follow up daily dashboards of the claims
department.

2.8.1 No proper authority limits has distributed amongst staff in the claims
department

According to the interview conducted with the managers, the main communication
problem arises when settling the claims due to centralized decision making process. This
has lead to slower the decision process in claims department. At Janashakthi decision
making culture mostly based on the centralized decisions and Assistant Managers and
Executives has no power to take decisions even on minor claims. This has lead slowness
of the paying process and need to authorize senior staff to claims in to a certain extent.

2.8.2 Following the outdated claims paying process for more than ten years

As Janashakthi is one of oldest insurance companies in Sri Lanka it is following the same
claims paying process for over 10 years of duration. In the current paying process there
are dual work steps has to be follow and refer to the Assistant Manager or Manager after
every work steps. This process has cause many problems in delay in settling the claims
and errors in the system.

2.8.3 No clearly defined KPIs for employees

At Janashakthi Insurance there are no measurement has placed to identify what are the
KPIs of each level of employees. Most of Senior Executives doesn’t like to do the first
step of the claims process of “claims intimation”. Therefore, there are lot of claims which
has registered but not entered by the staff due to heavy load of intimations have to do
only by Insurance Assistants. This has clearly indicated in Table 2.6 as only 52% of
claims was able to finish within 3 working days.

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2.8.4 Lack of training and development opportunities

Janashakthi Insurance is not focusing on employee training and development to make

them competitive in the insurance market. According to the interviews carried out with
staff of the claims department, they are demotivated as there is no opportunities to go to
the next level of their carrier ladder. This has lead to fewer active members in the claims
department and ultimately reduce the performances of the employees.

2.8.5 Not follow up daily dashboards of the claims department

Janashakthi claims department consists of frustrated employees due to unachievable

target within 08 hours a day. As head office claims department is processing all the
claims they get high volume of claims on daily basis. But management is not following
up the daily dashboards which consists how many claims each employee was able to
complete within a day. This daily dashboard helps to identity where are the performance
gaps and which claims should be prioritize to pay. But the top management of the Life
department is not focus on the dashboard figures on daily basis.

2.9 Summary

This chapter consist of overview of Janashakthi Insurance in terms of current structure,

background and business functions. The organizational analysis has been done using
SWOT analysis to identify the nature of the business. Finally the key problem has
identified and explained with reasons for delay in claims paying process of Janashakthi
claims department.

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 Chapter 3
LITERATURE REVIEW

3.1 Introduction

This chapter will mainly focus on the theoretical background of employee poor service
quality of the claims department and its causes in relation to the identified issue for the
study. Therefore, available literature on customer satisfaction and service quality will be
discussed in detail. Further, this chapter will produce the study frame work, which is used
in providing solution to the identified issue by this study.

3.2 Theoretical Background to the Problem

Providing a better service quality is paramount for any service providing organization in
current business world. However most of organizations are struggling to provide the basic
customer service to its end customers. If any organization is able to provide the best
quality service consist of best knowledge and experienced people, smooth processes and
good leadership induced culture within the organization. [CITATION Gun \l 1033]

The concept of service quality emphasis that due to nature of intangibility of services
,heterogeneity and inseparability of consumption and production , the procedure of how
customers are appraise the service quality is complicated and hard to measure. Therefore
it is accepted that service quality is measures based on the production and delivery of
service with its overall outcome.

According to Gunawardane (2017), client perception towards the service quality is

essential to attract the customer loyalty and retention for future. He stated that increase of
5% in loyalty of customer can improve the organizations profit from 25%-85%. A very
well satisfied customer is six times more loyal, repurchase, and recommend to others than
customers who are just satisfy of the service

Hence it is commonly accepted that service quality]is assessed based on the outcome and
the production and delivery of services.

Acceding to Berry et al. (1990), “Customers are the judges of service quality and they
evaluate the service by comparing the service they receive (perception) and with the

21
service the expected (desire). An organization can attain a good reputation for higher
service quality when they provide constant service to the customer

3.2.1 Five Dimensions of Service Quality

In 1980's Parasur man, Berry and Zeithmal found dimension of service quality in their
research. Thy concluded the dimensions to five and names as “Five Dimensions of
Service Quality”. Those are namely Tangibles, Assurance, Empathy, Reliability and
Responsiveness.
Reliability is about dependability and consistency of the service. This describe the
organization provides the service for the first time. In insurance it is about honoring the
commitment which included accuracy of records and provide the services on a timely
manner.

Responsiveness means the willingness of employee to provide the service without any
delay. Assurance means the courtesy of employees and ability to maintain trust and
confidence. Empathy means recognizing the customers and fulfill their best interest whist
providing the individual consideration. This could be delivery service from home to
home, 24 hours service . Tangibles explains the physical attributes like equipment,
buildings and personnel appearances.

According to the CITI customers focus on these five dimensions I various percentages
and this could be vary from country to country and could depend on nature of the service
industry of the country. In general Reliability measure at 32% , Responsiveness at 27% ,
Assurance at 19% , Empathy at 16% and Tangible at 11%. These percentages show the
importance of the first two dimensions for any organization.

According to Parasuraman, et al. (1988), clients emphasizes on these five dimensions in

different percentages and this could change from country to country and could depend on
the service industry at stake. In general, Reliability was measure at 32%, Responsiveness
at 27%, Assurance at 19%, Empathy at 16% and Tangibles at 11%. This shows the
importance of the first two dimension in any organization, where it is more than 50% of
the total. Parasuraman, et al. (1994) introduced a gap model to explain how the cognitive
process which moves clients’ mindset from expectations to perception.

22
Figure 3.1: The Gap Model

Gap 5

Source: Parasuraman, et al. (1994)

Gap 1; the difference between consumers’ expectation vs. management perceptions of

those expectations. (Not knowing what customers expect and their needs)

Gap 2: the difference between management perception of what clients expect and service
specifications. (Below par service standards and quality)

Gap 3: the difference between the actual delivered service quality and service quality
specifications. (The service performance gap)

Gap 4: the difference between delivery of services and the communication to clients
regarding the services delivery.

Gap 5: the difference between client’s expectation and perception of the services.
(Determines customer satisfaction)

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3.3 Study Framework
Figure 3.2: Study Framework

Improving Claim Settlement

Process

Improving service standards

Improving Service Quality

Improving employee satisfaction

Source: Author

In this research the solution of framework should implement from the literature.
The literature should give the specific model for each framework in order to provide
the solution.
Improving Claim Settlement Process
I need to improve claim settlement process through changing the current paying
process through letting all staff to do their work equally and empower executive
staff to take decisions on minor claims
Improving service standards
I need to improve the service standards through providing more target oriented and
customer oriented KPIs to the claim department staff
Improving employee satisfaction
Employee satisfaction through better performance identification process

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