Operations Management MANZANA INSURANCE
It was suffering from poor turnaround time of 6 days and poor percentage late figure. In comparison,Golden Gate consumed a turnaround time of 2 days only.The key problem faced by the Fruitvale Branch of Manzana Insurance is declining market share andprofits, which may be attributed to their being non-competitive in following parameters:
High turnaround time (TAT), despite being overstaffed in rating and policy writing. Theturnaround time of Manzana as compared to Golden Gate is an alarming extra 5 days.
The backlog of policies had increased since 1989, and the number of new policies andendorsements appeared to be stagnating, whereas Golden Gate reported moderate growthrates.
All time high number of late renewals, causing a dramatic rise in the renewal loss rate, whichwas unattractive particularly for agents.There are systemic issues with the process for handling requests that have led to this deterioration,including the incorrect prioritization of requests and the uneven distribution of workload amongst itsthree underwriting teams. Other problems in the Fruitvale branch include ineffective incentive systems,increase in shift to newer policies, bottlenecks in operation, possible idle capacity in the Rating andPolicy Writing teams, etc.
Operations - Policy Processing
Manzana processes 4 types of policies:
RUNS (Request for Underwriting)
The Process of writing a new commercial policy began when a distribution clerk received a writtenrequest for Underwriting from an agent. The Clerk after performing all the required functions passes itto the Underwriting team to evaluate, select, classify and price it. From there it is passed on to the policywriting department where the actual typing, assembly and distribution takes place.
RERUNS (Policy renewal)
It dealt with annual revaluation and if necessary re-pricing of risks insured by the commercial policy. Theprocessing was similar to that for RUNS with the difference that renewals are generated by the system.The renewal was done on the anniversary of the policy date.
RAIN (Policy endorsement)
If there was any physical change in the property being insured, a policy endorsement was needed toamend the terms of the existing policy. The processing of a policy endorsement was called RAIN.