Individual learning project

Running head: LEARNING PROJECT 1

Ayodesi Azeez Coker

BUSI-601

Individual Learning Project

Dr. Pierre

Liberty University

Introduction

The GEICO Insurance Agency is a subsidiary of the GEICO the insurance company, they work together so that they can service as many of their customers as possible. The GEICO Insurance Agency sells a lot of different types of insurances like: homeowners, renters, condo, identity, earthquake, special events, etc. While GEICO the insurance company solely focuses on the auto customers. The goal of the agency is to make sure that auto customers bundle their insurance policies with the agency since it can potentially save the auto book of business and increase retention. The agency works with different partners to sell all these other products, even though the insurance is not a GEICO product customers generally still receive discounts for “bundling” it through GEICO.

SWOT Analysis

Financial

The primary goal of the GEICO insurance agency is to penetrate the auto book of business. The company success is measured by how many auto policyholders have other products with GEICO. Customers with more than one policy retain better because they usually get discounts, it also makes it easier to do business when everything is with one company. Since

Stigler (1968), there has been substantial research in studying when bundling is

a profitable strategy and how bundling affects consumer welfare and overall market efficiency (Zhou, 2017). Another reason why it is very important to “bundle” the policies according to John Zinno, the president of the GEICO insurance agency is because “The auto company does not generate any profit within the first year they write a new policy”. If a policyholder cancels their policy within a year the company loses money, therefore bundling is important because it will increase the chances of the policies staying on the books and generating constant revenue. The GEICO insurance agency also generates commissions on the policies from the respective partners they conduct business with. It is very beneficial for GEICO to conduct business as an agency because they get commission on sales and do not have to worry about paying out claims since it is not their product plus, it also retains the auto book of business which will also generate more revenue in the long run.

Customer

Happy customers will generally retain better and will also create re-shoppers because they do not feel like a number. Every customer has a different need, something that is important to them it is the agents job to make sure those needs are met. The customer surveys will allow GEICO to gather data and see how they are taking care of their customers. When customers are happy with the service they are receiving, they will generally talk about it with their friends. Word of mouth marketing is crucial to the success of GEICO. According to PQ Media (2009), WOMM is the fastest-growing marketing communications segment, and American investment in WOMM campaigns was projected to be $3.04 billion in 2013 (Groeger & Buttle, 2014). When GEICO receives more 5 rated surveys, it is safe to assume that customers will have positive things to say about the company amongst their friends and family, which will eventually lead to sales.

Internal Business Process

The integrated partner system will make selling insurance quicker and easier because they would only have to go through one application. Nidia Bandstra, IT Manager in MOAT says that “How many more calls would an agent be able to take if they did not have to decline a partner? What if they did not have to check their guidelines? What if the system did all of this for the agents?” Efficiency is crucial in business, people are expecting processes to get better with time. For example, one of GEICO’s commercial states that customers will be able to receive an auto quote in 15 minutes or less. However, Esurance made a commercial not too long ago stating that customers will be able to receive quotes in 7 ½ minutes. People expect quicker and better service the integrated system will achieve efficiency for the customer, agent and company. Some sources suggest that new technologies and media, especially those characterized by fragmentation and graphical information such as television commercials and Web videos, cause shorter attention spans

Learning & Growth

Trends are very important when it comes to insurance. John Zinno stated that “If one customer says something out of the ordinary that is one thing, but if 10 customers are saying the same thing we have a problem”. All the resources are available to stay in tune with what is happening with our customers. Majority of the calls are recorded, so if numerous customers are having the same complaints about one of the partners an action needs to be taken as soon as possible. The performance monitoring analysts job description should include finding out what the problems are and how we can combat those problems. Having the PMA’s solely grade calls of agents to spot whether they are performing as trained is underutilizing the skills GEICO has at its expense. The PMA’s do check trends but as of right now it is solely based on the agents, and what feedback they can provide which will eventually lead the company to more sales. But, the real value of the PMA’s lies in being proactive to complications or concerns that the customers express.

Balanced Scorecard

Financial II

According to John Zinno, the president of the GEICO insurance agency “Auto and MOAT are both having record years, to penetrate the auto book of business we would have to open up a fourth location solely dedicated to MOAT”. The GEICO insurance agency is currently not penetrating the auto book of business because they are lacking the manpower to get it accomplished. To penetrate the auto book of business they need to have more sales than the auto department. Even though the insurance agency has had record breaking months so has GEICO the insurance company. A few things to keep into perspective is that the auto application is shorter than the other products, the auto department also has more agents compared to the other departments because they have been around longer. It is hard to outsell departments that have more agents and shorter applications.

Customer II

Agents and management are more aware of where they stand with the customer surveys. Management has gotten into contact with analyst and they constantly track surveys and send them out to the floor so everyone is aware of what the customers are saying about their experience. The GEICO insurance agency is currently on track with increasing their 5 rated surveys. Awareness helped turning around the survey results for the agents which ends up changing it for the entire company. They are currently on pace by increasing their 5 rated surveys by 5%.

Internal Business Process II

Systems have been released to make the job easier for the sales and service agents in the department. However, the sales department currently does not have all the partners in one application. Since, agents must go check their guidelines, decline partners/customers, and go from one application to the other they are not quoting their customers in 12 mins on average. They are however headed in the right direction since one partner recently announced that they are willing to enter the integrated system. The less applications agents must go through, the quicker they will be able to quote the customers.

Learning & Growth II

John Zinno stated, “We are currently spending 3.8 million to pay PMT (Performance Monitoring Team) to fill out an application. Are we using our PMA’s properly or can we get more out of them”? Mr. Zinno has pointed out on numerous occasions that he is not happy with the performance of the PMA’s because they are doing a task that a supervisor already does. He does not believe that our PMT staff can handle fact finding and coming up with solutions if the team was assigned a trend. He stated, “If we were to change the job description of the PMA’s it will affect the entire company, we are to big”. As of right now the PMA’s currently still have their same job descriptions which is grading agents calls to see if they are executing as trained. PMT does have the ability to start over in the fourth location since it will be starting from the ground up.

References

Heckert, S. E. (2011). You vs. mass media and technology: PowerPoint for today's short attention spans. Strategies: The Journal of Legal Marketing, 13(5), 14.

Groeger, L., & Buttle, F. (2014). Word-of-mouth marketing. European Journal of Marketing, 48(7/8), 1186-1208. doi:10.1108/EJM-02-2012-0086

Zhou, J. (2017). Competitive bundling. Econometrica, 85(1), 145-172. doi:10.3982/ECTA14251