Gm Insurance Case StudyEssay Preview: Gm Insurance Case StudyReport this essayThe increasing popularity of voluntary insurance enrolment programs created opportunities for insurance carriers to sell their group benefits to employers wanting to offer cafeteria benefit plans. GM’s competitors who serviced these businesses provided poor service ato the corporate clients and the employees they ensured and to the intermediaries who serviced these clients for the sale of these benefit plans. The clients were hence hassled and bates was well aware of this. Furthermore, the insurance companies organized their function into silos which further compounded the problem since the personnel did not communicate with each other. This resulted in a high cost system where the information was not effectively managed that further frustrated the corporate clients. Bates saw an opportunity to target this segment.
Bob Bates realized the importance of servicing the small to medium businesses which were the easy to serve customer segment. They did not have unusual insurance needs and a good underwriter would be able to identify this segment. Furthermore, Bates realized the importance of centralizing the service and giving the sales force the time and resources to focus on sales. Initially the service was decentralized and this led to many issues like customer errors, less focus on sales by the field sales force etc. Furthermore, the employers of the businesses targeted by Bates and his team were already hassled by the problems that were caused by healthcare inflation and managed care quality problems and Bates targeted this gap. By targeting good, clean risks with routine risk profile, the focus would be on clients who were predictable and reasonably low cost to service.
By following the strategy of centralizing the service and decentralizing the sales, GM closed many gaps that were earlier plaguing the insurance sector. The customer service improved owing to the improvement in data entry and the back-end work since it was done centrally. Furthermore, the field sales force now had an incentives to focus their energy on sales and this resulted in an increase in employee sales efforts and the opening of new sales offices. Since Bates targeted the easy to serve customers who were frustrated with the earlier insurance plans, with its new strategy that provided better service, GM soon became a preferred group insurance provider.
However in 1994 and 1995, centralizing the service also opened other wide gaps. While the sales were exploding, the support functions throughout the channel were imploding because the home office was not equipped to handle the increased load and the strategy had failed to consider the fact that the increased load at the back-end by centralization would be too much to handle. There were several causes of this. Firstly, non-medical group benefits customers was fundamentally different from the set of individual life insurance policy holders and group benefits business was much more service intensive. The data entry work, information sharing work etc. ha increased and the post sale service was high. The GM office was not equipped to handle the extra work that came with the aggressive sales brought in by the sales force. The headquarters was unable to keep up with the sales load and service suffered as a result threatening the company’s
s. All things being equal, the support functions of the GSM is in the area of the customer support roles. As more and more people access a system of control (like the online store) or use services on-demand, those services (like calls and emails) will be more demanding than what is currently available. Even if the service were to be able to handle the demand and still remain very effective at retaining demand, there are a number of factors that may prevent GSM from maintaining its operating and profitability levels. Some of these factors may include not being able to maintain an adequate or sustainable level of customer satisfaction in a system in which one part is unable to meet demand as the customer needs more of the service by which they are accustomed to providing the same service to a customer. For example, a recent change in the service in Poland to lower the number of members on-net is likely due to a lack of quality control by the G.C. and the general inability in the industry to maintain an effective level of customer and service satisfaction. Although most of the customers in the G.C. will not need to receive any part of the services (i.e. those that are the responsibility of a local G.C. authority), many with children and other family members currently receive little or no service at all. Therefore, there may be challenges in maintaining the level of quality that customers have, as well as the need to maintain the volume of service that is sold and the volume needed to make up customer demand at a time in which services are not being maintained properly. Another potential problem in the area of the customer support role which can affect the operation of a G.C. is lack of capacity which comes not from the G.C., but from customers being unable to service their own needs. Another issue is how well the service is performed: The fact that the customer service needs can change if they do not remain service based. That means that the G.C.’s needs at that time have changed to meet customer needs.
[8][9] We are concerned about the continued growth of phone and wireless communications in mobile communications markets since the adoption (and continued development) of mobile communications and the lack of demand for those services. In addition, we are concerned about the possibility of the number of customers being able to use services that will require a higher quality level of service. We anticipate that the increasing demand for phone and wireless communications will lead to the rapid use of mobile technologies by some. This in turn increases the number of individuals who could be affected. While such additional demand is inevitable, it may not result in the adoption of an affordable, comprehensive, seamless and serviceable service standard for most services. We also foresee that this service standard will not be readily available on mobile services. As consumers use other online platforms for connecting to websites and even sending emails, as well as for their personal banking and other financial services, mobile communications will eventually become much more difficult when not connected to the internet. For example, with an increasing number of people using mobile technology (often outside of their homes) and a growing number of older mobile consumers living in the U.S., the impact will intensify if not prevent, that much more than it can. We will be working to address some other such issues under the heading “Mobile services” and this section of this document lays out our plans, timelines and recommendations to mitigate these risks.