CUP Corporation

GROUP MEMBERSChirag Surti 28

Lucky Luthra

Mahesh pawar

Jitendra

Lalit Sharma

BackgroundCUP Corporation was one of the largest insurance firms based in

EuropeAcquired by another major insurance companyIt sold a various forms of insurance in the health, life, casualty,

property and automotive areasCustomer segments of the firm’s services are divided into two groups

of agents and brokers as well as end-customersGrowth of premium income in German industry is somewhat instable

Continue……1) Worse economic climate such as increasing economic downsizing, increasing unemployment and fluctuations in real income

2) Higher taxes and social welfare levies3) Increasing competition resulting from the deregulation of the

European market4) Extensive satisfaction of the demand for insurance in GermanIncreasing competition and increasing client price sensitivity in the

private insurance market has led to the shorter contracts and more cancellation of existing contracts among customers that is varied by the intensity of the products

Continue……CUP Corporation is facing some problems regarding to the customer

loyalty as well as in the corporate areaIt is reported that the lapse rate is much higher against the total

premium revenueThey had lost most of their customer base because of their own faults Quick hits and New Discoveries

1. A customer typically called because his or her agent was either unreachable or could not effectively address a question

2. A clerk working in one product line had only one screen and had access to information

3. Car insurance played a critical role in binding clients because it was often the first contract

Customer Care Center The key idea was to provide customers with one

telephone number and professionally trained people 1997 an outline for the center design was ready 1. CUP’s private customers would have one and only

one telephone number for all their questions and problems

2. Center would be open 24 hours per day and 7 days per week ( 90% of all inquiries in one telephone call)

3. Cup would benefit from a reduction in the lapse rate 4. Additional goals of CUP were: a) Becoming a

service leader in the insurance industry, b) Increasing the number of customer with multiple

Concerns and Inventing SolutionsAgents saw the center as a threat to their relationship

with the clientProduct line concern : Clerks intended to provide the

highest possible quality when talking to customers but in doing so tended to become too technical

April 1997, Center design 1. CCC would be a “ Greenfield” solution and it would

be the only center within the CUP. Calling center in branches and some product lines would be closed down

2. Centralize all customer inquiries and be available 100 percent of the time

3. Center would be established outside the existing organizational structure of CUP

4. Center would be profit center and be paid on a telephone call basis by the product lines rather a cost center supported by corporate

Indicators and measurement of SuccessAccording to the Derrick “ a decreasing lapse rate –that part of the

lapse rate, connected to the service quality of the CUP, should decrease

According to the senior executive Speed of processing, efficiency in terms of cutting out process steps, quality in terms of fewer errors, accessible all the time, and friendliness of the telephone operators

Another Executive, Responsible for through the agent channel, said the critical question was “whether we lose fewer clients”

One consultant drew a more complex picture for measuring success with clients: “How to measure defection if you have two channels to the customer: the center and the agents?”

QUESTIONS As an advisor to the the project manager, Derrick Westmuller, what set of measures

would you advise they adopt ?

1. Rather than focusing on the lower middle class of the market, they should focus on the upper class and other class of the market. As the business for the upper class would generate more commission and revenues

2. After focusing on the upper class, the lapse rate of the customer will decrease

3. Rather than focusing on the new contracts they should spend time on finding out the reason for the cancellation for the old one

4. They should focus on the service of the customer, due to which the customer would never cancel the contracts

5. Training to the clerk, staff, agent will help the CUP to retain their customer

6. With the CCC, customer would have one telephone number for all their queries

7. It would be open 24 hours per day and 7 days a week, finalize 90% of all customer inquiries in one call

8. CCC would help the customer to reach the agent or to inquire about the product when the agent is not reachable or on the weekend or in the night.

9. They should maintain the good relation with the customer by providing better facility and by providing information of the new product and new benefits

10. They should focus on the reason for the cancellation of the contracts and should give the best possible solution which will help the customer

Develop a balanced measurement system showing how the measures and measurement link to what you believe are the key success factors of the CCC

It provide customer with thewith one telephone number and