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Business Report on Vero Insurance

Essay by   •  August 12, 2013  •  Case Study  •  3,442 Words (14 Pages)  •  1,573 Views

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ASSIGNMENT 2

BUSINESS REPORT ON VERO INSURANCE

(SEMESTER 01, 2013)

JACKSON JOY

13088772

152.724

ADVANCED SERVICES MANGEMNT

DATED: 07-05-2013

The Executive Summary:

The main purpose of this report is to investigate the service management and marketing problems that would affect the business of Vero Insurance Limited and to provide recommendations and suggestions to improve and enhance the business in a better and possible way for the company.

Vero Insurance Limited (Vero), earlier known as Royal and SunAlliance Insurance Limited, a business which was a merger of the three well know insurers - Royal, Sun and Alliance, offers highly specialised insurance solutions. Vero is one of the biggest insurance companies in New Zealand and Australia. Due to competitions from other counterpart companies, in order to maintain their current position as a leader in the industry, they need to continually renovate their services so as to maintain the expectations of the customers. Since there are many competitors in the same industry, any flaw in providing quality service would cede customers and eventually affect the company's image.

This report talks over the issues faced by the insurance industry in managing service quality, customer relationship, the delivery channel and adopting service logic. The report also provides recommendations and suggestions by which Vero can evade these issues and improve its business and be the leader in the industry.

Introduction:

The social, economic and environmental changes that have occurred around the world in the past years have been difficult for everyone. And further more due to the financial crisis and economic downturn of the past couple of years have even taken some of the changes on a higher level of complexity. Insurance companies like Vero are in the front line when managing these challenges and upheavals they create. The purpose of insurance is to bring some predictability, stability and manageability in what is, in significance, an anarchic world. The issues faced by insurance companies include ways to put customers at the center of everything, risk and capital management, incorporate sustainability factors in business processes. This is where a business analyst plays a role in coping with these challenges.

Insurance companies like Vero, have no tangible products to sell, but must instead rely on the strong relationships build with the loyal customers, and word of mouth to help them sustain in the competition. Still, despite these challenges, the marketing strategies for Vero are really no different from any other company and thus need a strong focus on the basics of effective marketing. Vero being among the top insurers in New Zealand and Australia, need to cope, defend and safeguard themselves from these challenges if they need to improve market share and gain new business. Thus, a need arises in designing and building new and innovative products with a key focus on understanding the customer properly so that to increase the revenue profitably and to manage risks. Thus, Vero needs to incorporate service logic which in turn, would enable them to think innovatively and succeed in this chaotic world of high competition. As Gronroos (2007) claims that, service logic commences with understanding what value is being transferred to customers, and this comprise understanding their end to end experiences. Vero insures more than 150,000 houses, 115,000 cars and 28,000 pleasure boats in New Zealand, and thus it is mandatory to keep these insured within their circle of trust and thus building business as its believed customers are the natural co producers (Kalaignanam & Varadarajan, 2006).

This report will evaluate the challenges Vero faces in building service quality, customer relationship, developing new innovative products, integrating delivery channels, enhancing operational efficiency and effectiveness and embedding sustainability in the business process, suggest recommendations for these situations, and suggest how to improve its service in order for it to remain a competitive and sustainable business.

Vero Background:

Prior to becoming Vero in the year 2003, Vero was known as Royal and SunAlliance. The business of Vero has grown and diversified over the years through the acquisitions of a number of respected New Zealand insurance companies namely Guardian Royal Exchange, AMP General, Commercial Union, Axiom, Mariner and many others. In 2003, Royal and SunAlliance, a part of the Promina Group was listed in the stock exchanges of both New Zealand and Australia. In 2007, the Australian Insurance giants Suncorp Group acquired the Promina Group thus making Vero a part of one of the largest financial and insurance operations throughout New Zealand and Australia. Vero's has a very rich heritage stretching back to over 250 years, all the way from 1710 and is steeped in the insurance traditions of strength and stability (Vero, 2013).

Figure 1: The Vero official Logo.

Vero is the third largest insurance group in Australia and the second largest in New Zealand, employing over 16000 staffs in 450 different locations in the two countries. They have a total asset in excess of AU$91 Billion. The Vero brand symbol is symbolised to a guiding light as it reflect the meaning of the name Vero - certain, assured and truth and was developed around the idea of 'shafts of light'. The contrasting grey and red color combinations reflect the brand values, dynamism and performance in red and security and stability in silver.

1. Vero Insurance Commercial Advertisement.

2. Vero Hero - a promotional video

In New Zealand, the Vero head office is situated in the heart of the Auckland Central Business District and employs just under 1000 people in offices all over the country. As Gronroos (2007) says "The Employees are the first market, an internal market, for the firm's offering to external customers as well as for external marketing programmes"; the same is appreciated by Vero because of which Vero was ranked within the top 5 'Large Workplaces' in the independent nationwide Kenexa 'Best Place to Work' survey for the 7 of the last 9 years. As part of their marketing

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