CUP Corporation

GROUP MEMBERS
Chirag Surti 28

Lucky Luthra

Mahesh pawar

Jitendra

Lalit Sharma
Background
 CUP Corporation was one of the largest insurance firms based in
Europe
 Acquired by another major insurance company
 It sold a various forms of insurance in the health, life, casualty,
property and automotive areas
 Customer segments of the firm’s services are divided into two groups
of agents and brokers as well as end-customers
 Growth of premium income in German industry is somewhat instable
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 1) Worse economic climate such as increasing economic downsizing,
increasing unemployment and fluctuations in real income
 2) Higher taxes and social welfare levies
 3) Increasing competition resulting from the deregulation of the
European market
 4) Extensive satisfaction of the demand for insurance in German
 Increasing 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
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CUP Corporation is facing some problems regarding to the customer
loyalty as well as in the corporate area
It is reported that the lapse rate is much higher against the total
premium revenue
They 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 Solutions
 Agents saw the center as a threat to their relationship with the
client
 Product 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 Success
 According 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