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In the trend of globalization and coordination of banks, insurance and security enterprises, the life insurance industry has been facing tremendous competitive pressure. Business in the era of knowledge economy has realized that efficiently capturing the knowledge embedded in their organizations and deploying it into operations and services will create an edge over their competitors. Though the issues of knowledge management have been discussed widely, there is a genuine lack of empirical research for the life insurance sector in Sri Lanka. This study addresses the research gap via extensive literature review and conducting empirical surveys with an embedded qualitative field study in the life insurance industry by using a sample company which is a giant in the industry.
CEYLINCO INSURANCE COMPANY
From a solid and innovative start in 1939, Ceylinco Insurance Company has faced numerous changes and challenges and has successfully weathered them all. Registered as Ceylinco Insurance Company Limited in 1987 and commencing business on the 14th of January 1988, in the spheres of Life and General Insurance, we have grown from strength to strength.
Today, they have become the leading insurance company in Sri Lanka, with the largest network of branches and agents in the insurance industry. Their goals include becoming the leading provider of protection and financial security in Sri Lanka and in select international markets.
The Ceylinco insurance of Limited was recorded as a public company By Actions in 1987 and as the begun matters on 14th January 1988. Shortly after that, the Business began its assurance operations in the two Lives & the General matters, having inherited the expertise in the assurance obtained Ceylon Insurance Company Limited. Ceylinco Life is the arm of life insurance of Assurance of Ceylinco. Ceylinco Life is the leader of the market in the life insurance to Sri Lanka. Ceylinco Life has one of the bigger funds of assurance and the highest proportion of creditworthiness in the industry. Ceylinco Life has more than 175 branches through the island to serve its customers better we are the fastest claim settled Life Insurance Company in Sri Lanka.
E.g.: Hospital Cash claim / Ceylinco Major Surgery.
Partial and Permanent Disability claim.
Competition in the Insurance industry is stiff and fierce in Sri Lanka with more than 10 major and recognized companies play with several broking agents are competing at each other. According to a survey carried out by Insurance Board of Sri Lanka in 2007, it was revealed that the competition in making insurance arena is worse than the other.
Some sources extracted from the IBSL reports are given below and they prove the level of competition in Sri Lankan life insurance industry. Ceylinco insurance company has the biggest portion in the Market share as per the results in 2009 report.
Source: IBSL Report - 2009
Source: IBSL Report - 2009
With the above, it clearly demonstrates that Life Insurance providers should consider improving Service Quality to increase the customer satisfaction with paramount of importance. Insurance providers should implement tools to identify service quality gaps reach and every process that caters to customers' needs as it represents more than 50%. As insurance is becoming a booming industry in Sri Lanka it is very important to focus on high customer quality. Therefore, this study would be of interest as it investigates the implementation on Knowledge Management systems and cater a good service to their customers.
Few complaints made by existing life insurance policy holders are as follows,
Lack of information on obtaining an insurance policy
Lack of information from different insurance policies Benefits
Too much of conditions and customers have not been educated on those information , when there is claim the issues arise due to that reason
Since policy benefits have not been given in a clear cut format, policy holders are getting into a trouble to make the claim.
The study tries to suggest recommendations for Ceylinco Insurance PLC to improve their services by solving issues such as above and making the customers satisfied.
Insurance companies survive in the business purely by customer satisfaction. The players in the market cannot significantly differentiate through price or product. Therefore, they always try to retain their customers by having a close relationship. Ceylinco performs varieties of tasks to maintain a good relationship with their valued customers. Customer Satisfaction which should go in parallel with customer relationship. The service provided should make and feel the customer satisfied in order to strengthen the relationship between the customer and the company.
Thus Ceylinco uses many tactics to maintain a good customer satisfaction.
A special customer relations officer is used to attend for customer issues
Customers are made feel home, through many attractive services such as providing magazines and entertainment and even refreshments.
They encourage their customers to come out with their own suggestions & developmental needs thorough maintaining a 'Suggestions Box'
To satisfy their customers beyond their expectations they maintain a 'Loyalty gift scheme'. Those who promptly pay their premium over five years will be awarded with valuable gift product to encourage their interest on insurance. This not only providing financial satisfaction to the customers but also the mental satisfaction to them.
A highly sophisticated database system is maintained to identify the customer name, date of birth, family members, occupation, work place, religion, telephone number and hobbies.
Greeting cards are sent for festivals of respective religions.
Customers are invited for special occasions organized by the company.
Customers are constantly contacted via email to update on latest services.
Though English is the corporate language; customers are treated in their native language to make them feel easy.
Based on the review of literature and the research problem, the following question has been formulated in order to determine the relationship that exists between the various dimensions of customer expectation and the service quality by the insurance companies for Life insurance policy holders in Ceylinco Insurance PLC. It is important to understand this relationship as it would enable the companies in the insurance sector to improve their service quality through Knowledge Management systems and to match and to exceed customer expectations and create a knowledge base in order to stay ahead in the market.
The following research question could be arrived based on the analysis of the research problem and the review of the literature.
How to improve customer expectations in Ceylinco Insurance PLC by implementing Knowledge Management strategies?
The main goal is to improve the customer satisfaction within Ceylinco Insurance group and improve the service quality and suggest them the methods to face the competition in the industry.
The main objective of this research is to improve the Customer satisfaction at Ceylinco Insurance Corporation in the Life Insurance sector.
The Research efforts typically focus on organizational objectives such as performance, competitive advantage, innovation, the sharing of lessons learned, integration and continuous improvement of the organization to offer high-quality customer service by using Knowledge management strategies.
CHAPTER 02 - LITERATURE REVIEW
The Literature review presents several definitions and explanation on what knowledge management is and how the life insurance industry can increase the Service Quality and customer satisfaction through knowledge management by different people.
WHAT IS KNOWLEDGE MANAGEMENT
There has been a growing recognition in the business community viewing knowledge as a critical resource knowledge resources matter more than conventional ones e.g. Lan & capital (Wu & Wong, 2006). The knowledge-based view provides a theoretical base on why knowledge-based resources are crucial resources are crucial in creating the sustainable competitiveness of the firm (Choi & Lee, 20003; Spender, 1996). Knowledge management (KM) practices enhance the flow of insight and advice between employees and therefore they can benefit from other's expertise (von Krogh et al., 2000). The idea that enterprises can improve employees' use of knowledge via K has been widely accepted among practitioners, whilst few organizations have tackled KM as successfully as they should. Parlby (20000) reported that many organizations still faced serious problems in managing knowledge, including lack of KM policies, difficulty of capturing tacit knowledge and knowledge overload.
An innovation is described by Rogers (1995) as an idea, practice or object that is perceived as new by an individual or another unit of adoption. As stated above adopting and applying KM is a relatively new phenomenon in any country for the life insurance industry. Ajzen and Fishbein (1980)'s Theory of Reasoned Action (TRA) posits that a person's behavior is a function of the person's intention determined by the attitude toward the act and the beliefs about the expectations of others, namely social normative beliefs. Technology Acceptance Model (TAM) (Davis, 1986, Davis, 1989) suggests that a person's intension to use technology is determined by perceived usefulness and perceived ease of use. Perceived usefulness refers to the degree to which a person believes that using a particular system would enhance his or her job performance, while perceived ease of use refers to the degree to which a person believes that using a particular system would be free of effort. The propositions of TAM can be applied in examining what benefits KM would be free of effort.
In this study knowledge is defined as the understanding, awareness, or familiarity acquired through study, investigation, observation, or experience over the course of time (Bollinger and Smith, 2001). In the case of life insurance business, "Knowledge "refers to the familiarity and professional capability in new policy design underwriting, claim, and customer service and so on. Carlsson (2001) suggest that KM is the process of identifying, managing and leveraging individual and collective knowledge to support the firm to become more competitive and provide a good service to the customers. Gupta et al. (2000) propose that K is a process that helps organizations find, select, systematize, disseminate and transfer important information and expertise necessary for activates. KM is also referred to manage the corporation's knowledge through a specified process for acquiring, organizing, sustaining, applying, sharing and reviewing the knowledge of the employees to enhance organizational performance and create value (Davenport and Prusak, 1998: Alavi and Leidner, 2001). According to Horwitch and Armacost (2202), we defined KM as the creation, extraction, transformation and storage of the correct knowledge and information in order to design better policy, modify action and deliver results for both the employees and organizations in the life insurance industry.
Life Insurance can be seen as an arrangement through which the risk of specific individuals can ne share by the general majority of people (Hsiao, 2003). Different from other industries, the products sold by the life insurance are comparatively "invisible" and "untouchable" (Hsiao, 2003). "People" play an important role in conveying the knowledge and service to the customers in the life insurance industry. The Life insurance industry sells life insurance policies which are composed of the obligation, image, service and knowledge of the companies. K would be imperative for life insurance companies to enhance performance and gain competitive edge (Wang, 2005). Although KM has employed in the business world for decades, its adoption and applications have been just lunched in Sri Lankan life insurance business recently. Innovation Diffusion (ID) has drawn much attention of researches in several areas (Baptista, 1999; Carter et al., 2001; Wolcott et al., 2001). However, there is literature found on the adoption and diffusion of KM, particularly in the life insurance domain. Thus, this study lays emphasis on the adoption and diffusion of innovation to identify motivations and barriers among the employees who are important in undertaking KM activities in life insurance enterprise.
ATTITUDE TOWARD KNOWLEDGE MANAGEMENT ADOPTION
"Attitude Toward the Behaviour" is suggested by Ajzen and Fishbein (1980) to be the personal factor that is critical in influencing a person's intention which is viewed to be good predictor's behaviour. The personal factor is the individual's positive or negative evaluation of performing the behaviour. A person's attitude refers to his or her judgment that performing the behaviour is good or bad and that he or she is in favour of or against performing the behaviour (Ajzen and Fishbein, 1980). According to the innovation-development process (Rogers, 1995), after organizational recognition, research and development of KM, the innovation would need the employees to adopt the concept and methods of KM and then implement the related activities.
SERVICE QUALITY AND CUSTOMER SATISFACTION
In this section our attention would be to review literature which has recognized the relationship between service quality and customer satisfaction. In other words the impact of service quality on the customer satisfaction process. Customer satisfaction will be an outcome of the interaction between customer expectations vs. customer experience.
When considering the relationship between service quality and customer satisfaction, the work of Zeithaml and Bitner (2000) needs to be highlighted. In their model they have illustrated that the product quality or service features and prices paid are also important variables other than the service quality, in the customer satisfaction process. But their attention was mainly on the service quality.
The model presented by Zeithaml and Bitner (2000)
(Source: Zeithaml and Bitner, "Service Quality , integrating customer focus across the firm", 2000,P.75)
Therefore, this model forwards that service quality is one significant aspects of customer satisfaction. Additionally product quality and pricing also has equal proportion in gaining customer satisfaction. However, service quality could be found as a vital facet in contributing towards customer stratification level.
CHAPTER 03 - METHODOLOGY
This research was primarily conducted based on the information gathered through World Wide Web. In addition to that interviews with different customers and with employees at Ceylinco insurance organisation was carried out to obtain an insight into various ideas. Questionnaires were also used to gather information on customer opinions. The Questionnaire was designed to investigate the level of satisfaction and areas to be improved in the organisation. A total of 50 questionnaires were distributed amongst different customers in the Ceylinco insurance in the life insurance sector. The questionnaires used a combination of both open ended and close ended questions with the intension of obtaining additional information.
METHOD OF DATA COLLECTION
In this study the primary data will be collected through a self completion questionnaire from customers of the selected five Insurance companies. The secondary data was collected from secondary source such Government publications (IBSL Annual Report) Ceylinco Insurance Annual Report reports and from other publications.
SELECTION OF SAMPLE
For the purpose of gathering data on applying knowledge management for improving customer expectation and customer experience, a total number of 50 questionnaires were distributed, from which a total of 50 were selected.
In an effort to improve the efficiency and effectiveness of customer service, many leading enterprises have turned to knowledge management. Companies that are able to capture and leverage the knowledge of their employees, subject matter experts, customers and partners most effectively achieve numerous benefits, including:
Enhanced employee productivity and satisfaction
Improved business processes throughout the organization
Increased customer satisfaction and retention
Although there is no universal definition of Knowledge Management (KM), generally it's a processÂ through which organizations generate value from their intellectual and knowledge-based assets. Most often, value generation involves capturing what employees, partners and customers know and sharing that information among employees, departments to derive best practices. First of all, with the right processes and technologies in place, companies can capture and share key knowledge from employees, partners and customers, including:
Knowledge of customer-related processes and how they interact
Knowledge about customer behavior and personal preference
Knowledge about customer product use or service quality
Employee knowledge, such as sales practices and client care insight
Business partner knowledge, such as the complimentary services and products of interest to customers
Knowledge about the skills, competencies and goals of specific employees
Skryme has developed a dimensional scheme for Knowledge at different key levels
Qualification and skills
Collaboration methods & Standards
Knowledge based business
Best practice KM process
Personal development programs Eg. E-learning
Tasks and outcomes
Career/ life planning
How the Dimensions work in the Knowledge Management
Policy/Strategy - By applying KM policies into this dimension, the organization will be able to improve the Policies, business strategies within the organization. The good policies and strategies will improve the relationship with the customers and it will make easy for the customer to reach the company for their requirement.
People (Individual/Group/Organization) - Once the KM strategies have been implemented within the organization, it will be easy for the staff within the organization to keep the relationship with the customers the customer and to improve their on the job requirements.
Technology - Technology is the easiest place to apply the knowledge management strategies. This will help to improve the efficiency of the organizational business processes within the organization.
Process - Ultimately through all the points that are mentioned above will increase the business process within the organization.
The purpose of knowledge management is to make organizations more efficient and effective, and to be aligned with organizational strategy for the support of achieving organizational objectives. By implementing the above strategies as an organization by Ceylinco insurance, they will definitely be able to improve the business and directly or indirectly the customer satisfaction.
CHAPTER 04 - DATA ANALYSIS & PRESENTATION
THE RESULTS REGARDING PERCEIVED USEFULNESS
Our empirical study identified the importance of these variables as percentage of respondents agreeing with the respective variables being important. Table below represents the respondents' opinions regarding how they think KM will increase the customer satisfaction. 93% of the respondents agreed that KM would enhance their "Customer Service Quality"
Table 1: Results Summary of Perceived Usefulness on KM from the Questionnaire
Questionnaire was developed based on the following areas since the language should make for the customer easier to understand.
% of respondents
Work and Service Quality
No of calls when there is a claim
Making it easier to closely work with company
Convenience and flexibility
Meeting the needs at work
Reducing the mistakes
Reducing the duplicate work
THE RESULTS REGARDING COMPLEXITY
The results regarding the complexity involved in KM is shown in Table 1. From this empirical study, it was found that more than 80% of the responding from Customers perceived that the information systems for KM were not friendly to use and not easily accessible, it took too much time to find the information need, the message was not clear, there was not instant assistance available when they had problems in applying knowledge management, and KM was not easy to use in practice. These findings indicated that there still remained several impediments in adopting and applying KM in the life insurance companies such as Ceylinco Insurance. To successfully implementing KM, the life insurance enterprise should recognize these obstacles and solve recognize these obstacles and solve the associated problems.
But by improving the KM systems and strategies within the organization and making them more strong will definitely give the best results for the organization was the main idea from all the customers in general.
CHAPTER 05 - CONCLUSION AND RECOMMENDATION
This study enlightens our understanding of the customer's perception on Knowledge management, their attitudes toward KM adoption and their KM activities in practice. Findings also help life insurance enterprises, particularly those embarking on KM in Ceylinco insurance , realize that they should well promote KM projects, solve the possible problems involved in employing KM, and generate the subjective norm in which Ceylinco is encouraged and motivated to adopt and apply KM strategies within the origination.
Following recommendations can be made through the study for Ceylinco Insurance PLC to improve the service quality, efficiency and effectiveness to provide a high-quality customer service to make their customer satisfactions high,
Implementing Knowledge management strategies will help Ceylinco to increase the customer satisfaction and by doing so will improve the market share as well. And it will realize that they should well promote KM projects, solve the possible [problems involved in employing KM
Ceylinco will generate subjective norm in which employees are encouraged and motivated to adopt and apply KM. Strongly advised to get fullest corporation from the Staff members and add their input while adopting these strategies
It can be recommended to adopt the strategy department by department as the advantageous that gains by one department will spread across the organization and it will ease the process of implementing the strategies in the other departments.
As mentioned above under problem statement, it can be recommended to have a high-quality CRM (Customer Relationship Management ) system, to record all customer complaints and later the company will be able to gather all the information in one place and analyze between teams and make correct decision to prevent them (Customer complaints) . Further the company can train the staff (agents) in house and send them to educate the customers appropriately, carry out Email campaigns with the relevant information etc.