Research Studies Project Report (M.B.A.) - Asian Institute of Technology, 1995

A research study report submitted in partial fulfillment of the requirements for the degree of Master of Business Administration.

The competition within life insurance industry today is intense. This rivalry takes place in three areas, i.e., price, product quality and service quality. If insurers try to compete on the basis of price, they have an advantage only as long as it takes the competition to match the price. If they try to compete on the basis of new products, the advantage lasts only until competitors imitate the product and in a regulated industry it is difficult to introduce new products. That leaves only one enduring way to compete - by offering better service. Production, underwriting, and claim settlement are the insurance operations which the insurers concentrate for their service quality. The characteristics of service quality can be viewed as operating things that are faster, better and cheaper. The service quality begins with the design of the service delivery system. A solution that enable insurers to compete through providing superior customer service and being more efficient and effective is the use of information technology. Insurers invest in information technology to speed up their operations and increase better service quality. Predica, the second largest life insurer in France, is very successful to do these by leveraging well-developed information technology of its owners, Credit Agricole Bank. Predica has developed computer systems to support the banks' computer networks for electronic data processing of life insurance transactions. These efficient systems have improved Predica's service quality, i.e. lower products' price, faster and better service. In Thailand, AIA, the largest life insurer, starts developing its computer systems to facilitate its agents and it plans to link these systems with the computers at head office to gain more efficiency. Although it pays attention on developing the systems to facilitate its agents, the service quality is also gained from the systems.