With the competition hotting up in the post-liberalized insurance market, one factor that is contributing to the overall performance of an insurance player is Customer Relationship Management (CRM) that the company is indulging in. Each of the insurers is parading its own leverages in the field and highlighting the importance attached to customer service in the organization. To what extent the promises are being delivered is the million dollar question.

One thing which is common to most companies is that they are all relatively new in the field and have not been seriously tested. This is particularly true in the case of life insurance companies who have long-term relationships with their clients. It should be the attempt of players to not only retain the existing customers but also widen the customer base by enrolling fresh customers from time to time. These two activities are inter-dependent in a way: If the customer service in the organization is really good, the customer is unlikely to look elsewhere. On the contrary, he would act as a great brand ambassador for the company, which would eventually pave the way for enrolling fresh customers. In the case of long-term contracts, it is possible that a policyholder has a host of services to be attended to during the entire contract period.

One aspect that is related to such a long-term contract is that the perishability of service may not be very significant. While it may be broadly believed so, it would not apply as an ‘across the board’ characteristic. There may be some services which may have to be attended to with all the urgency. For example: If a policyholder being serviced under the Salary Savings Scheme (SSS) of a life insurer is transferred from one place to another, an undue delay in transferring his file to the desired destination may result in all the premiums being kept in the pipeline or the suspense account. It is possible that the policyholder would realize this only at the time of claims settlement by which time it is either too late or too complicated to rectify the damage. The huge sums of money outstanding in the suspense account of the giant life insurer endorse this argument. Another example in this regard can be the grant of a timely loan. If the need of the policyholder for a loan is such that he or she requires it very urgently, the perishability is not ruled out.

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