Manzana Insurance Case

...

- DEPARTMENT ISSUES:

All the departments need to follow a single strategy or a single procedure in making the policies so that they are completed without any delay or complexities. The underwriting and policy writing departments work on RUNs and RAPs first and only after they are sorted, other policies are attended. They claim to be following FIFO keeping their priorities straight which actually resulted in running of renewals so late that they are not completed on time. On the other side manager of rating department, Rick Ramirez has a different opinion that FIFO should be followed without any priorities. This implies that the different departments have different opinions on the procedure to be followed and the supposed FIFO process is not being followed.

- GEOGRAPHICAL DIVISION:

New Management had divided the underwriting team of Fruitvale branch into three categories. Each team was assigned a fixed area. In each area they are dealing with approx. 23 agents. As per exhibit 7, it was clearly shown that each team had different amount of work. As per annexure..., each team is having different number of request each days.

Number of Request Processed by Team 1= 14.63

Number of Request Processed by Team 2= 13.15

Number of Request Processed by Team 3= 11.23

Considering 30 minutes as time required for processing each request, utilization of each UT is as follows (annexure 3) –

Utilization of Team 1= 97.50%

Utilization of Team 2= 87.67%

Utilization of Team 3= 74.83%

As we can see, team 1 is having overload of work while team 3 is sitting idle for approx. 1.9 hours. This is also issue which is faced by Manzana Insurance Company.

RECOMMENDATIONS:

- Reducing Turn Around Time:

Turnaround time calculated by management of Fruitvale branch had many flaws. Instead of taking 95% Standard Completion Time for TAT calculation, taking the average weighted time it is decreased to 4.69days only. Instead of calculating TAT in a cumulative approach, if we consider the request which was processed by the DCs gets transferred to UTs and so on we will be able to arrive at 2 days.

- Approach to Renewals:

In spite of FIFO system, Fruitvale branch was focusing on only RUNs & RAPs leading to increased number of backlogs. Also they are getting $150 incentive in case of new policies above their fixed target. Focusing only on profitable ones & by giving priorities to new customers will lead to agents’ dissatisfaction. Having a straight FIFO system tends to decrease in late renewals as it serves RUNS, RAPS, and RERUNs & RAINs equally.

- Improving the Operational Efficiency of Underwriters:

Instead of having three different territories, it is desirable to work as a single entity. By comparing the utilization of each territory, we have come to this recommendation as there is uneven work distribution which leads to underutilization in territory 3, i.e. 74%. Combining all territories in one, will leads to even distribution of workload for underwriters.

ANNEXURES

Annexure 1

[pic 1]

Annexure 2

[pic 2]

Annexure 3[pic 3]

Annuxure 4

[pic 4]

Annuxure 5

[pic 5]