Servicing of Policyholders
Dialogue between life insurance associations in Singapore and Malaysia January 2005
Paper presented by Tan Kin Lian, Chief Executive Officer, NTUC Income

1. INTRODUCTION
The experts have identified the following strategies:

  1.. Excellent customer service gives the edge in a competitive environment
  2.. Loyal customers give repeat business that are more profitable
  3.. It is cheaper to retain an existing customer than to find a new customer.
I wish to share the experience in NTUC Income in applying these strategies.

2. NTUC INCOME

NTUC Income provides life, general and health insurance. We have 1.2 million customers. Our premium income is $2 billion a year. Our total assets are $13.0 billion. Each day, we handle 8,000 customer encounters at our branches, call centers and claim service center. These encounters can delight or infuriate our customers.

We handle a daily average of 30,000 transactions, mostly payments of insurance premiums, which are not counted in the above figures.

3. VARIETY OF TRANSACTIONS

Our frontline officers have to handle a variety of transactions involving about 50 insurance products with different coverage. They have to handle enquiries, premium quotations, insurance applications and claims on these products.

The customers do not have a clear understanding of the products and have varying expectations of their coverage. They can also be quite demanding.

4. STRATEGY

We adopt the following structure and strategy to provide excellent customer service:

*    Referral system
*    Promptness
*    Open approach
*    Disputes
*    Customer satisfaction survey

5. REFERRAL SYSTEM

Our frontline officers are trained to handle the simple and routine transactions. This represents about 95% of our daily transactions. We adopt a referral approach to handle the remaining 5% of transactions. Our frontline officer takes down the relevant details, and passes them to a specialist or to a manager. The specialist will call the customer within 2 hours.

Customers are happy that the complicated issues are referred to the right person. They are happy that the frontline officer is able to help them to identify the relevant facts for the second level to take over. We handle about 250 referrals each day.

6. PROMPTNESS

We adopt a prompt approach (1, 4, 14 day rule) to handle our customer requests:

*  Simple issues are handled within 1 day
*  More difficult issues are handled within 4 days
*  Complicated issues (which require investigation) are settled within 14 days.

We adopt a standard response time to handle all types of issues. If the issue cannot be settled within 1 day, the customer is told of the time required, i.e. 4 or 14 days. If the case cannot be settled within 14 days (which applies to 1% of cases), a reply has to be given at that time, and an estimate has to be given on the additional time that is needed.

Many customers now contact us through e-mail. They can get a reply within the same day, and allows the customer to interact with the officer. We encourage our officer to contact the customer by telephone to discuss the issue.

7. OPEN APPROACH

We adopt an open and helpful approach in dealing with customers. If we do not know the answer, we tell the customer, and pass the issue to another colleague. If we make a mistake, we tell the customer and rectify it. If we inconvenience the customer, we apologise. If we cannot meet the specific request of the customer, we suggest one or two alternatives and let the customer choose.

We write down our servicing practice on a leaflet. The leaflet is posted on our website, and is also handled to the customer when they are involved in the issue. This practice leaflet has proved to be effective.

8. DISPUTES

We adopt a three level approach to handle disputes:

* The frontline officer identifies the dispute and tries to solve it, by listening, explaining our practice and exercising flexibility.
* Disputes and difficult issues are referred to a service quality officer, who identify and clarify the issue with the customer and pass it to the appropriate manager or panel for a decision.
*  If the dispute cannot be resolved, it is referred to an external dispute resolution body, with the
agreement of the customer.

This approach helps to take the pressure off the frontline officer. The customer is generally happy with the access to a senior person.

9.  CUSTOMER SATISFACTION SURVEY

We carry out a daily telephone survey. 200 customers are called each day. They are selected at random among customers who made a recent encounter with the office. We ask for their views about the standard of service, and their perception of NTUC Income.

We achieve a satisfactory rating of 97% on our customer service; i.e. they find our service to be satisfactory or excellent. 96% have a favorable image of our organisation.

We identify the customers who are extremely delighted (about 3%) or extremely unhappy (about 1%) with our service. Our service quality officer follow up by a phone call to talk to these customers. They give an insight into our service practices.  We are able to identify the customer satisfaction score by location. We take remedial action for locations that score lowly.

10. INSURANCE ADVISERS

Our insurance advisers play a role in providing first level service to customers. Many customers approach the adviser on their insurance needs. The above principles apply to the insurance advisers as well. We let the customer choose who they wish to contact in the first instance, i.e. the insurance adviser or the office directly.

11. BENCHMARK OF EXCELLENCE

 Our benchmark of excellence is:

* Customer satisfaction score of 95%
* Promptness, i.e. completed transactions within 1, 4 and 14 days.

By achieving the above measurements, we can benefit from an increase and retention of business from our loyal customers.

12. ORPHANED POLICYHOLDERS

Over the years, we have developed two channels to service our policyholders:

* Insurance advisers
* Customer service officers

The policyholders can get service through both channels. The office sends mails directly to the policyholders. The insurance advisers also keep in touch with their policyholders. If the insurance adviser has left, the policyholders can continue to get service directly from the officer. They can also request for their policies to be transferred for servicing by another adviser. We usually do not pay the renewal commission to the new adviser. The management of orphaned policyholders is not critical in our situation.

13. CONCLUSION

Our approach towards customer service has been successful. We are able to handle issues promptly and satisfactorily. 95% of issues can be handled satisfactory at the first level. The remaining 5% are resolved at the second or third level. We treat our customers fairly and with respect. We want them to feel that they have been served by an excellent organisation with excellent people.