INS/032

IBS Center for Management Research

Need for Training Sales Personnel in Insurance Organizations

This case was written by D.G.Prasad, under the direction of H.K.Singhal, IBS Center for Management Research. It was
compiled from published sources, and is intended to be used as a basis for class discussion rather than to illustrate either
effective or ineffective handling of a management situation.

2003, IBS Center for Management Research. All rights reserved.

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 INS/032

Need for Training Sales Personnel in

Insurance Organizations
Kurt Miami (Miami), the CMD of Pleasant Insurance Company, was troubled by the current crisis
facing his company. The company has shot into fame because it is one of the first insurance
companies to offer customized insurance products. One of the strengths of the company is its
underwriting department. The company has excellent underwriting professionals who assess and
underwrite a variety of risks at attractive premiums.
In a quarterly meeting of the company James Nickle (Nickle), vice president (Marketing),
announced that there was a drop in the number of insurance policies sold in the previous quarter.
"I don't think you need to worry too much. It could be due to seasonal factors," said Miami.
"If that is the case, then let us observe the sales in the coming quarter as well, and then reach a
conclusion," said Nickle. After discussing other vital issues, they concluded the meeting.
There was a drop in sales in the next quarter, too. This time Miami was truly worried.
"Have you analyzed the reasons for the drop in our sales this time?" Miami asked Nickle.
"Yes. I have done an analysis of the sales in the last two quarters as well as the sales for this
quarter. However, I am unable to identify the exact reason for the drop in sales. I think it requires
an in-depth analysis, which may require some more time," replied Nickle.
"We give the customers the best products in the market by customizing them to suit their needs.
So, logically speaking, there should be an increase in sales, unless there is a slump in the industry
as a whole," said Miami thoughtfully.
"But the industry is growing. More and more people are becoming aware of the need for insurance.
Also, insurance products are now more flexible. Our products not only provide simply insurance
cover, but also act as a risk cover and investment option," replied Nickle.
"In that case, you should also take into consideration customers' behavior regarding insurance
products. For instance, how many potential buyers actually buy our products? What is their post-
purchase response? Do they recommend our products to friends and acquaintances? If we get to
know about these in detail, we will be able to identify the exact reasons for the drop in sales," said
Miami.
After a lot of effort, Nickle obtained information pertaining to the above questions. He was then
able to trace the reasons for the drop in the company's sales. It was revealed that although initially
a lot of prospective buyers showed interest in knowing about the policies, they became
disinterested soon after interacting with the company's sales personnel. What was worse, even
customers who had purchased the company's policies earlier, were shifting to other firms at the
time of policy renewal. The dismal performance of the company was also driving away
prospective insurance customers.
When the company realized that the problem lay in customer service, it decided to bring in
changes in the department. It also felt the need to train its sales personnel to deliver superior
quality service.

1
 Need for Training Sales Personnel in Insurance Organizations

Shortly after, a training programme was conducted by the company for its sales force in order to
improve the quality of customer service. It was an in-house training program.
The objectives of the program were:
To make the sales personnel understand what is 'acceptable behavior.’ Here, apart from setting
high standards with regard to service delivery and customer friendliness, the sales force was
trained to handle all kinds of customers, including the extremely demanding ones.
To prepare a complete set of product and company documentation so that sales representatives
can answer customers' queries quickly. The sales representatives were trained to keep a
complete set of product description at their desks. Apart from this, they were also asked to
keep material that would provide more information related to the company's history, mission
and the details of various executives.
To develop response schedules. The time taken to respond to the company's clients was noted.
To provide a clear chain of authority. The training program helps the sales representatives
manage the customers in case they are unable to clarify their queries. The extent to which the
sales representative is free to take decisions and offer concessions to customers is made clear.
Apart from training them on these service-related issues, the employees were also provided with
information about everyone else's job. By knowing about the other person's job, the employees
could be expected to be more efficient. To do so, the company also conducted a short training
program for the employees to learn about the essential elements of various jobs within the
organization.
Pleasant Insurance Company derived the following benefits from cross-training:
All its employees could now help any customer.
All its employees now knew how to sell policies.
None of its employees were indispensable.
The top management of the company could now pay special attention to the development of
training programs to ensure long-term success.

QUESTIONS FOR DISCUSSION:

1. Pleasant Insurance Company conducted a training and development program to enhance the
performance of its employees. Discuss the importance of training and development programs
in a company.
2. In what way can the training program for sales personnel differ from that for claims handling
personnel at Pleasant Insurance Company? Can there be any similarities between the
approaches followed for training the employees in these departments? Give a reasoned answer.