Measurment of Service Orientation of an Insurance Company in a Transitional Market

Service is an intangible product and even does not exist when it is bought. This work aims to improve the understanding of the importance of service orientation and its development within a company. Studies show ‘that companies offering superior service achieve higher than normal market share growth, that the mechanisms by which service quality influences profits include increased market share and premium prices and that businesses in top quintile of relative service quality on average realize an 8% higher price than their competitors’ (Zeithaml et al, 1996). A lack of understanding of service orientation may inhibit successful organizational competitive advantage. Employees’ viewpoint is extremely important because they are also the internal customers of the company; they know the company’s internal strengths and weaknesses and can give a clearer and a more complete overall picture of the company’s service orientation. Within research scope a SERV*OR instrument (Lytle at al, 1998) is used for measuring organizational service orientation. It clearly specifies and measures key organizational practices, procedures, and routines indicative of an organizational service orientation. This study is a contribution to the understanding of insurance industry as a service industry in transitional countries. It has broken new ground – not only in the transitional countries, but also in service marketing worldwide – by investigating this rather neglected segment of service industry. Instead of polling customers’ opinion about the service orientation of the Company, this study took new approach to measure service quality and orientation of a company. It confirmed that a company’s service orientation largely depended on the employee’s perception of it. To ask the employees is as important as to ask the customer because the employee receives internal services and is alone able to assess their quality (Berry et al, 1994).