insurance company

Prior to applying Six Sigma tools and methodologies, one large

insurance company's cycle time for claims was 41 days. Because
nearly 89 percent of past claimants deemed 14 days sufficient time for
completion, customer satisfaction was at an all-time low. In less than
five months, the project team not only assessed the organization's
defect rate and identified the key factors involved, but it also reduced
the defect rate by more than 70 percent. In addition, the company's
project savings exceeded $250,000 in the first five months, and
customer satisfaction increased dramatically.

INSURANCE

The Business Problem

An insurance company wanted to enter the Top 100 of Fortune 500 list.
Among many things, revenues also need to be increased by another
20%. The CEO decided this to be a top goal and wanted the best
resources to be put to it. He called the Six Sigma champion and told
him to increase the revenues by 20% within a year's time using the
Six Sigma techniques.

The Benefit Analysis

The Six Sigma champion created a team of 2 Black Belts and 2 Green
Belts to achieve this Herculean task. The champion also estimated that
when the company enters the Top 100 of the Fortune 500 list, the
brand image value will increase by atleast 35%.
Problem Identification
The results of the analysis of the Six Sigma team was very expected
as in the major contributor to increasing revenues for the company
was to increase the number and value of Insurance policies executed.
The Six Sigma team had to find out what factors impact the number
and value of policies.

Root Cause Analysis

The Six Sigma team got down to collecting data for the problem. To
better understand the process they also started making calls
themselves. Upon extensive data collection and analysis it was found
that the increasing the number of policies does not impact the revenue
to that extent since the cost to maintain an account is same
irrespective of the value of policy. Therefore, the team decided to focus
on the policy value increase. Based on the data collected and the
statistical tests performed, they came to the conclusion that the
factors that impacted the policy value are annual income of the policy
holder, Agent Experience, Type of Family and Number of Visits made
by the agent.

Solution
A Design Of Experiments (DOE) was conducted to find out the optimal
values for each of the important factors and if there existed any impact
if the factors were considered together. These suggestions made by
DOE were implemented for solution.

Result

Three months after the solution was implemented, the results started
showing. The next six months policy sale increased by 30% by value
as compared to the previous months.