Appendices

INSURANCE & PAPER
An analysis towards the possibilities of digitalization and a more computerized future within the subscription
process
Issued by T.A. Hennis & J. van Waalwijk, May 26, 2005
Chile – University of Technology 26 May 2005
Table of contents
Appendix 1 IDEF0 Diagram A0 ........................................................................................................................................ 4
Appendix 1.1 IDEF0 Diagram A0 Level-1 .......................................................................................................................................... 5
Appendix 1.2 IDEF0 Diagram A3 ..................................................................................................................................................... 6
Appendix 1.3 IDEF0 Diagram A4 ..................................................................................................................................................... 7
Appendix 1.4 IDEF0 Diagram A5 ..................................................................................................................................................... 8
Appendix 2 IDEF0 Diagram B0 ........................................................................................................................................ 9
Appendix 2.1 IDEF0 Diagram B0 Level–1 ........................................................................................................................................ 10
Appendix 2.2 IDEF0 Diagram B1 .............................................................................................................................................. ...... 11
Appendix 2.3 IDEF0 Diagram B2 .............................................................................................................................................. ...... 12
Appendix 2.4 IDEF0 Diagram B4 .............................................................................................................................................. ...... 13
Appendix 2.5 IDEF0 Diagram B5 .............................................................................................................................................. ...... 14
Appendix 3 – Object description .................................................................................................................................... 15
Appendix 4 – Interaction-flow diagram Part 1 ................................................................................................................. 17
Appendix 5 – Interaction-flow diagram Part 2 ................................................................................................................. 18
Appendix 6 – Demarcation and assumptions ................................................................................................................... 19
Appendix 7 – Specifying processes ............................................................................................................................... 21
Appendix 10 – Simulation set-up ................................................................................................................................... 24
Warm up period ........................................................................................................................................................................ ... 24
Number of replications ...................................................................................................................................... ........................... 24
Appendix 11 – Verification ............................................................................................................................................ 26
Appendix 12 – Validation .............................................................................................................................................. 28
Appendix 13 – Computerization options, process changes ................................................................................................. 30
Evaluation module ............................................................................................................................................... ........................ 30
Business Rules Engine ..................................................................................................................................................... ............. 30
All paperwork digitalized ....................................................................................................................................................... ........ 30
Agent with IPAQ ..................................................................................................................................................... ..................... 31
Web based application ........................................................................................................................................................... ....... 32
Appendix 14 – Demarcation and assumptions digitalization ............................................................................................... 34
Digitalize paperwork of sales division ............................................................................................................................................. 34
Agent with IPAQ ..................................................................................................................................................... ..................... 35
Web-based subscription .......................................................................................................................................................... ...... 36
Appendix 15 – Interaction-flow diagram part 1, Evaluation Module and BRE ........................................................................ 37
Appendix 16 – Interaction-flow diagram, digitalized sales division ...................................................................................... 38
16.1 – part 1 ........................................................................................................................................... ................................... 38
Appendix 17 – Interaction-flow diagram, all digital .......................................................................................................... 40
17.1 – part 1, iPAQ ................................................................................................................................................... ................... 40
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Chile – University of Technology 26 May 2005
17.2 – part 1, Web based application ............................................................................................................................................. 41
17.3 – part 2 ........................................................................................................................................... ................................... 42
Appendix 18 – External variables .................................................................................................................................. 43
Appendix 19 – Recommendations .................................................................................................................................. 45
Process ...................................................................................................................................................... ................................ 45
Scenario-analysis .................................................................................................................................... .................................... 45
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Chile – University of Technology 26 May 2005
Appendix 1 IDEF0 Diagram A0
Subscription Health Insurance contracts
I
A0
Request client
Sales agent Sales Manager
Rejected request
Request for
digitalization
Process controls
• Availability resource
• Process time
Status
• Quality
• Completeness
• Accuracy
Location Cooperation
Client Controller Front office employee
Canceled request (B23)
The first part of the subscription part deals with the request for an insurance policy by a client. The sales agent of individual sales
(further on called as ‘sales agent’) obtains the necessary information and approves the request of the client. Roughly the process
can be divided into four main processes. These are in the following order: Capture client information, Revise and categorize
request, Evaluate request and Inform client.
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Chile – University of Technology 26 May 2005
Appendix 1.1 IDEF0 Diagram A0 Level-1
A1
Capture client
information at
front desk
Request
client
A4
Evaluate request
Request to controller
Request with
nothing to declare
A5
Inform client
Ok Supervisor
Authorized
request
Rejection
To DF
Sales agent Sales Manager
Request for missing info
Process controls Status
Cooperation
A3
Revise and
categorize
request
A2
Capture
information
during visit
Front office employee
The process starts when a client requests an insurance policy or an agent sells a policy by phone. The front desk employee will
ask the client to fill out a declaration form (A1). Another possibility is when a Sales agent calls client if they are interested in a
policy. If so, the sales agent will make an appointment to visit the client. (A2) After the sales agent or front office employee
captures the necessary information the declaration will be sent to a sales manager of individual sales (further on called as ‘sales
manager’) who will revise and sign the declarations (A31).
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Chile – University of Technology 26 May 2005
Appendix 1.2 IDEF0 Diagram A3
A31
Revising and
Signing Request client
A32
Categorize
request
Request with
nothing to declare
A33
Request to
complete form
Request for
missing info
A34
Send request to
controller
Request to
controller
Sales agent Sales Manager
Request ok
supervisor
Information missing
Request for analysis
Process controls Status
The request will be categorized by the sales manager into four different client requests (A32). First there is an possibility of an
incomplete declaration form, the sales agent will then ask the client to complete the form (A33).
Complete declaration forms can be divided in three kinds of requests:
1. Request, which will be send to Medical Control for a technical analysis (A34)
2. Request, which is OK at Supervisor Level
3. Request, where the client has nothing to declare
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Chile – University of Technology 26 May 2005
Appendix 1.3 IDEF0 Diagram A4
Request to controller
A41
Technical
Analysis
A44
Authorize
request
A43
Reject request
A42
Get additional
background
information
Received additional background
Rejected request
Authorized and printed
request
A45
Print declaration
Request Ok
supervisor
not delivered by client
Sales agent Sales Manager
Request ok
Request not ok
Request for add background
Process controls Status Cooperation
Controller
Request 1 (previous page) will be analyzed by a controller, for a medical control (A41) and results into three different outcomes:
a. Request, which needs additional background information, which goes to the sales agent who tries to retrieve the additional
background (A42). When the client’s additional background is received, the request will be send back to the Technical
analysis (A41), if not, the request will be rejected and the client will be notified (A41).
b. Rejected request, rejection will later be sent to client (A43).
c. Authorized request, is just as Request 2b (Authorized and Ok supervisor level requests) are printed out (A45) and made
ready for sending.
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Chile – University of Technology 26 May 2005
Appendix 1.4 IDEF0 Diagram A5
Authorized and
printed request
A51
Send information
to client
Rejection to client
A53
Mark
declarations
Request with
nothing to declare
A54
Fill out
documents
A55
Sign documents
(by client)
Canceled request
(B23)
Request for
digitalization
Sales agent Sales Manager
A52
Sign restrictions
Process controls Status Cooperation
Rejection
Restrictions
accepted
Restrictions not accepted
The declarations will be sent back to the client (A51). The client then has to accept the declaration with restrictions. When the
client accepts (or not) the restrictions in the declaration and signs the document (A52) it will be sent back to a Sales manager,
who marks the declaration form (A53). The accepted requests will be sent by the manager to the sales agent at the end of the
day. The agent will fill out the request documents so the client can sign these (A54 and A55).
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Chile – University of Technology 26 May 2005
Appendix 2 IDEF0 Diagram B0
Subscription Health Insurance contracts
II
B0
RQ - for
digitalization
Rejection,
canceled RQ
RQ - mail
RQ - complete
Chief sales Sales agent Service
assistant
Employer
RQ - for
completion
Process controls
 Availability resource
 Process time
Status
 Quality
 Completeness
 Accuracy
Location Date Cooperation
This part of the subscription process deals with the digitalization, approval and completion of requests. Also an interaction takes
place between the sales and the employer. This is just a short overview of the different processes and their sequence, the SADT-
diagrams provide a more elaborate view, including their sub-processes, their interactions and the resources.
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Chile – University of Technology 26 May 2005
Appendix 2.1 IDEF0 Diagram B0 Level–1
B1
Digitalize RQ
RQwith
errors
B2
Process notified
RQ
B3
Sign RQ
B4
Approve RQ
Rejection
Canceled RQ
FUN with error
B5
Complete RQ RQ - for
completion
RQ - mail
RQ - complete
RQ for
digitalization
RQ- control
Noti fi ed RQ
Service
assistant
Sales agent Chief sales
Employer
Notified RQ
RQfor notifi cation
Approved RQ
Process controls
Status
Location
(employer/client)
Date Cooperation
Laying off
When a request, or FUN (name of the form, part of the request)
1
, enters this part of the process, a distinction is made between
those that arrive before and after a certain date. The ones that are late go immediately to the completion process (B5), after
which all processes will be dealt with manually at ‘Control Production’. The other flow goes into the digitalization process (B1).
1
See demarcation in Appendix 6
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Chile – University of Technology 26 May 2005
Appendix 2.2 IDEF0 Diagram B1
B11
Digitalize RQ
B12
Send RQ other
city
B13
Notify employer
RQ for notification
Notified RQ
Service
assistant
Sales agent
RQ - for
digitalization
Form with
error
Process controls
Location
(employer)
Date
The orders that have to be digitalized go to three processes of digitalizing, which are modeled as one (B1), because they are all
subsequently done by the same resource. After this process one flow of requests goes to the employer of the person with the
request, who has to decide upon acceptation of this request. The other flow goes, after signing (B3) and checking on errors, to
approval.
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Chile – University of Technology 26 May 2005
Appendix 2.3 IDEF0 Diagram B2
B21
Receive
notification
B23
Cancel RQ and
take care of
errors
RQ - for
notification
Accepted RQ
(SF)
B22
Inform client and
get copies
Rejecti on,
special case
Rejecti on,
no empl oyee
Canceled RQ
(S)
Canceled RQ
Employer Sales agent Chief sales
RQ (SF)
Status Process controls Location client Cooperation
Copies not delivered
The employer decides upon acceptation after receiving the notification. A request can be accepted or rejected, and the latter can
have two causes. One of them is because the person of the request is no employee or there is an error in the notification. The
average time an employer needs is a week. The rejections have different follow-up processes. The first regards another
interaction with the client, where the right documents are being tried to be recovered (B22). If this process is successful, the
request will be canceled, otherwise the request will go back to the signing part of the digitalization process (B3). The second
possible rejection, because it is a special case, starts a process of canceling the request and taking care of the error
2
(B23). This
results in another flow, back into part 1 of the subscription process.
2
This can be a mistake in the application, e.g. wrong address. The process will start over again.
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Chile – University of Technology 26 May 2005
Appendix 2.4 IDEF0 Diagram B4
B41
Approve RQ
B43
Inform client and
get copies
RQ for
approval
Approved RQ
B42
Prepare
submitted
documents
Canceled RQ
Sales agent Chief sales
Approved
Denied
B44
Authorization VP
Authorized RQ
Process controls Cooperation
Status
Copies not
deli vered
There are two possibilities for approval, which are of course positive and negative. If a request has been approved it flows from
prepare deliveries to completion (B5). The negative approval, i.e. denial, starts another interaction with the client, again to
recover the client’s copies and retrieve the legal documents (B43). When the client does not hand over the documents, the
request has to be passed on to the VP Sales for authorization (B44). After authorization it flows as well to prepare deliveries and
completion.
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Chile – University of Technology 26 May 2005
Appendix 2.5 IDEF0 Diagram B5
B52
Complete
request
B53
Receive,
digitalize,
prepare
RQ - for
completion
RQ - mail
RQ - complete
Chief sales
Checked RQ
RQ- control
Authorized/
accepted RQ
Process controls
Status
B51
Prepare
submitted
documents
This process starts with the completion of the submitted documents (B51-2), which is followed by a black box process of
checking all the requests by ‘Control Production’ (B53). This is a separate and demarcated department. Within this process there
are three different outputs:
 RQ with error
 Approved RQ
 Rejected RQ
The RQ with error and the Approved RQ are both checked whether they are notified, because when they were laid off at the start
of this second part (they were too late), they could be unnotified. If so, the process of notification, which is done by an external
company, and all other possible follow-up processes are done within the responsibility of Control Production. The requests, which
contains reviewed errors, and the direct approvals than go to mail.
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Chile – University of Technology 26 May 2005
Appendix 3 – Object description
Beneath are the different object types listed, with their primary attributes and actions. This information is in accordance with the
IDEF0 diagrams. The table is useful in communicating and looking up the different aspects of the most important objects in the
system. A more elaborate description of the actions of the different resources will be handled elsewhere, see appendix 7
Specifying processes.
Object type Attributes Actions
Resource
Client Location
Status (at home)
Level of cooperation
(deliver copies)
Fill out forms
Receive information
Receive agent
Deliver forms
Sign restrictions
Sign documents
Sales manager Location
Responsibility
Speed
Working hours
Utilization
Digitalize declaration
Signing papers
Authorize
Accept/reject
Revise forms
Fill out forms
Prepare forms
Handling papers
Sales agent Location
Responsibility
Speed
Working hours
Utilization
Visit client
Call client
Fill out forms
Recover forms
Prepare forms
Front office employee Location
Responsibility
Speed
Working hours
Utilization
Serve client with filling out declaration and enclose background
Digitalize declarations
Service Assistant Location
Responsibility
Speed
Notify employer
Send documents
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Working hours
Utilization
Employer Location
Accessibility
Speed of handling
Fill out forms
Accept/reject notification
Send forms
Controller (Technical
Analysis)
Location
Responsibility
Speed
Working hours
Utilization
Perform Technical analysis
Controller (Control
Department)
Location
Responsibility
Speed
Working hours
Utilization
Control production
Documents Attributes
Request Status (checked, signed, accepted, rejected etc.)
Time in process
Completeness
Physical attribute (digital/physical)
Client’s documents State (delivered)
Physical attribute (digital/physical)
Other
Process Kind of process
Time, distribution
Average queue
Quality (reprocess needed?)
Dependence (previous processes, resource)
Decision Probability/distribution
Location in process
Table 1 - Object description
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Chile – University of Technology 26 May 2005
Appendix 4 – Interaction-flow diagram Part 1
Client Sales Medical
NO
YES
YES
NO
Sign
restrictions
ACCEPT
Fill out declaration
form and enclose
background
MS
Incomplete
Request to
complete
form
End
Send request
to controller
TA
Mark signed
declaration
Get
background
OK Level
Controller
OKLevel
Supervisor
Deliver
background
TA
Reject
Revision &
signing
Categorize
Authorize
request
Send
information to
client
Ask
background
Digitalize
declaration
Print
declaration
End
MS
Receive and
send
background
OK
Nothing
to declare
Decision
Mark
declarations
Not specified
Fill out
documents
Sign
document by
client
L
S
Send rejection
to client
Technical
Analysis
End
Client enter
FrontDesk
Call client for
an
appointment
Visit client
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Chile – University of Technology 26 May 2005
Appendix 5 – Interaction-flow diagram Part 2
Del ay at
employer
L
Di gi tali ze
RQ
NO
RQNotified
Si gnRQ
YES
Digitalizati on
Errors
YES
NO
E1
Approve
RQ
Recover client
copi es
NO
Prepare submitted
documents 2
YES
NO
Contact and
inform cli ents
Deli ver
copies
Cancel RQ, DS
not specified
YES End1
Request
Authorization
VP.Sal es
NO
Prepare
submittedRQfor
signi ng
Complete submitted
electronic and
physi cal documents
M
Control
product ion
Check submi tted
documents with
errors
Revi ew errors
Prepare submitted
documents 3
C
E2
Laid off
Producti on
Prepare submitted
documents 1
YES
C
SF
E
SF
Error
No
empl oyee
Outcome
RC
Cancel RQand
take care of errors
S
M
End
Mail
process
Send RQ
other ci ty
Notify
empl oyer
Client Sales Control Production Employer Mail
Outcome
control
One week between
send and receive
notification, done
by external
company
Error Appr. Rej.
RQ Notifi ed
YES
NO
End3
Approval
RDE
RC
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Chile – University of Technology 26 May 2005
Appendix 6 – Demarcation and assumptions
1. There is only one kind of entity flowing through the system, this entity represents the request of a client, even when it (for
example) changes in a notification to employer, declaration or another kind of document.
2. The monthly average number of requests is 7500, assumed is that clients request policies 12 months per year. A year has 52
weeks, a week 5 days and a day 10 hours. Therefore we assume that the average number of clients per hour is around 35
clients and around 346 per day.
3. The distribution between clients that enter the underwriting process via the front desk and via sales agents who call them and
visit them afterwards is assumed at 5% - 95%.
4. The process of calling a client and make an appointment will only be modeled with clients who accept the offer. The time of
calling clients who are not interested is calculated in this time. The duration per call without result is assumed at 11 minutes
and with result at 21 minutes. Furthermore is the distribution of calls with-without result assumed by colleagues at 90%-
10%. Hence, 9x11min + 21min = 120 minutes for every call with eventually a result.
5. After calling the client for a first appointment it is modeled that the sales agent then directly will visit the client. In reality the
sales agent will make an appointment for a few days later, but in the model it is assumed that when a sales agent has
sufficient free time to visit the client, that he will do so.
6. The working hours are between 9am and 7pm every day of the week except Saturday and Sunday. Every employee has a
lunch break of 1.5 hours.
7. Friday, except for the front desk employees, the sales agents and sales managers often leave the office 2 hours earlier (4.7%
more scheduled utilization). This is not included in the simulation. Hence, this has to be taken into consideration when
drawing conclusions about the utilization of the resources.
8. Only working days, including lunch breaks, are simulated. This has been taken into account with routing times and results of
several days. For example asking additional background from client, which takes 8 days in total in the simulation. This will
take in reality about 10 days.
9. In reality, a client will always be served by the same agent. This will not be simulated because simulating this is too complex
and useless, because it doesn’t have any influence on the outcomes.
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Chile – University of Technology 26 May 2005
10.The decision taken after the technical analysis takes 10 minutes. That is excluding the process times for sending the
documents.
11.We assume that there is always an equal amount of front desk employees present at every moment of the day, except during
lunchtime, from 14.00 until 15.00. They help the clients that are waiting before going to lunch.
12.Reprocesses have a higher priority than the other processes and are done instantly.
13.Front office employees serve clients at the front office with the following processes: Fill out declaration form, enclose
background and digitalize declaration.
14.The 3 processes of reviewing errors after ‘Control Production’ are taken together into one, because they are subsequently
done by the same resource.
15.The Technical analysis will be seen as a black-box model in this analysis. Every day, incoming declarations will be processed
and the (different) resources will not stop working after they finished every incoming declaration of that day. Therefore all the
incoming requests are handled within a day.
16.Every request that enters the Technical Analysis process will be finished at the end of the day, even if that means working
late. ING is interested in the utilization of the controllers who perform the technical analysis, and because they sometimes
work overtime, we created an extra resource, representing the Controllers working overtime.
17.After the Technical Analysis decisions have to be made about the request. In 40% of the cases there is a need for asking
backgrounds occurs. Assumed is that the expectation that this decision will be made for the second time (after obtaining the
background from a client the first time) is around 3%.
18.The agent has to visit clients, which takes time. The time for visiting clients is simulated as a process visiting client. The
corresponding time encapsulates the time going back to the office (or home) as well, hence they signify the average travel
time per visit. These times are very hard to validate, and are subject to alteration to approximate the utilization of agents
better.
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Chile – University of Technology 26 May 2005
Appendix 7 – Specifying processes
The following tables show all the different tasks of the resources that have been previous identified. The right column shows the
average time each process takes, between brackets are the reprocess times.
Sales manager
Part 1 Minutes Part 2 Minutes
Revising and signing 9 (9) Sign Request (2 processes) 7 (7)
Judge request (incomplete) 2 Prepare submitted documents 1 5
Judge request (Ok nothing to declare) 1 Prepare submitted documents 2 2
Judge request (Ok Level supervisor) 5 Prepare submitted documents 3 5
Judge request (Ok Level controller) 1 Prepare submitted Request for signing 5
Print declaration 4 Cancel Request and take care of errors 2
Mark declaration not specified 2 Request Authorization VP Sales 3
Mark signed declaration 1 Complete submitted electronic and physical documents 5
Check submitted documents with errors 1
Review errors 5
Sales agent
Part 1 Minutes Part 2 Minutes
Average calling time per agent per request 120 Recover not notified copies of Request 2
Request to complete form 5 Cancel Request, DS not specified (twice) 3
Send to controller 0.5
Authorize request 10 Other: Front office employee
Reject request 10 Part 1 Minutes
Ask background 10 Fill out declaration form and enclose background 17 (17)
Send information to client 5 Computerize declaration 23
Send rejection to client 6
Sign restriction 5
Get background 7 Other: Service assistant and Control Department
Receive and send background 11 Part 2 Minutes
Fill out documents 20 Send Request other city (service ass.) 5
Sign documents 5 Notify employer (service ass.) 10
Digitalize FUN (3 processes) 24 (11) Control Production (CP) 7
Recover client copies 3
Contact and inform clients (twice) 10
Table 2 - Process description
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Chile – University of Technology 26 May 2005
Appendix 8 – Decisions
Part 1 Part 2
Name Distribution Name Distribution
Reprocess fill out declaration Laid off production (too late)
YES 1% YES 5%
NO 99% NO 95%
Reprocess revising and signing RQ notified (2x)
YES 1% YES 81%
NO 99% NO 19%
Request incomplete Digitalization Errors
YES 2% YES 30%
NO 98% NO 70%
Categorize requests Approve RQ
Ok nothing to declare 20% YES 95%
Ok Level supervisor 35% NO 5%
Ok Level controller 45%
Deliver copies (2x)
Decide after Technical Analysis YES 97%
Authorize request 55% NO 3%
Reject 5%
Ask background 40% Outcome control
Approved RQ 80%
Accept restrictions Error 10%
YES 95% Rejected RQ 10%
NO 5%
Outcome (employer)
Deliver background Approval 90%
YES 80% Error 8%
NO 20% No employee 2%
Table 3 – Distributions
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Chile – University of Technology 26 May 2005
Appendix 9 – Routing times
In the following table are the routing times listed. Also are there not routings present, but only delays in sending information.
These are as well listed in the table.
Information document exchange
Action From To Travel time (min) Delay
Part 1
Visit client Sales agent Client TRIA(80,100,120)
Send request for analysis Sales agent Controller 0 <1 Min
Send authorization Controller Sales agent 0 1 Day
Send rejection Controller Sales agent 0 1 Day
Ask background Controller Sales agent 0 1 Day
Get background from client Sales agent Client TRIA(80,100,120) 6 Days
Send background to Technical Analysis Sales agent Controller 0 1 Day
Send restrictions to client Sales manager Client TRIA(80,100,120) 3 Days
Send documents for signing Sales agent Client TRIA(80,100,120) 5 Days
Visit client to complete form Sales agent Client TRIA(80,100,120)
Part 2
Send request to employer Service ass. Employer 0 1 Day
Delay and receive request from employer Employer Service ass. 0 5 Days
Contact and inform client1 Sales agent Client TRIA(80,100,120)
Control production Sales manager Control dept. 1 Batch per Day
Table 4 – Routing times
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Chile – University of Technology 26 May 2005
Appendix 10 – Simulation set-up
Warm up period
There are different possibilities to deal with the warm up period. A very long run can be simulated in order to diminish the effect
of the initial conditions. This is not very desirable, because it takes too much time. Other solutions are to start with higher initial
values for certain variables or to include a warm up period in the simulation. Certain important variables are monitored
graphically in order to identify the time when they stabilize. Several graphs can be found below that show important variables in
the model. These are used to define the warm-up period. The variables that have been chosen to do this are the following:
Average waiting time at Control Process, the Scheduled Utilization of the Control department and the Average time that it takes
for a (successful) request to get through the system. Control production is a process very late in the subscriptions process. All of
the requests flow through it and affect these variables. The average subscription time is one of the most important variables in
the system and clearly shows the stabilization point. The runtime is set on 2000 hours.

Figure 1 – Wait time CP Figure 2 - Utilization CP Figure 3 - Subscription time
From the first graph a clear change in the curve can be noticed, at nearly 200 hours, but a slight rise occurs a bit later, until
1000 hours. The second graph shows a slight less distinct change, but after 200 hours as well the curve begins to slow down its
rise. After 1000 hours the curve is nearly a flat line. The third graph below shows the average time in the system for successful
and unsuccessful requests. This is one of the most important factors in the system. This graph as well shows a stabilization after
1000 hours, one hundred days.
Number of replications
There are rules to calculate the number of replications. After a number of replications (n) the results are used in order to define
the ultimate number of replications at a certain level of accuracy. This can be done using the following formulas and the Student-
T distribution:
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Chile – University of Technology 26 May 2005
h = half-width
n = number of replications
s ( ) = standard deviation
h’ = desired half-value
n’ = ultimate number of replications
The results of 5 replications can be seen below. The value represents the average total time an approved request is in the system
(hours).
Using these outcomes the following calculations can be made.
s
2
(x) = 0.115
s
2
( ) = 0.023
t0.975 = 2.78
h = 0.42
Table 5 - Results replications
This indicates that with a certainty of 95% the average total time in the system for approved requests is between 118.4 and
119.2. Now we use the last formula to calculate the number of replications with certain reliability:
With a 95% certainty that the average total time of approved requests is between 116.4 and 120.4 (h’ = 2), the number of
replications has to be 1.
Value ∆
2
1 118.5 0.09
2 118.9 0.01
3 119.0 0.04
4 119.2 0.16
5 118.4 0.16
118.8
25

h
h
n = n
]
]

,
`

.
|

2
'
x
x

h
h
n = n
]
]
]
]

,
`

.
|

2
'
) x s(
t
= h
/2 - 1 1, - n α
n
(x)
s
= ) x (
s
2
2
Chile – University of Technology 26 May 2005
Appendix 11 – Verification
In this verification a check is done on the calculation of different variables throughout the system. A comparison is made
between different output variables and related variables in the model. For each of the chosen output variable a formula is created
with different variables that are related to this output variable. Then the output variable is calculated using these variables and
subsequently checked with the ‘real’ (output) value. A big difference between the calculated and the computed value could
signify a fault in the model. The symbols in the tables correspond with those in the interaction-flow diagram (see appendices 4
and 5).
Variable (#) Equal to (#) Value1 Value2 %
(Categorize) 0.997*Input + Incomplete 59404 60710 2.2
(PrintD) AUTH(0.55*MD) + OKSUPER (0.35*Input) 44048 42482 3.6
(RecBG) 0.8*(GetBG(0.4*(OKCONT(0.45*Input)))+3% FBL) 8602 8413 2.3
(FO) NoDECLARE (0.2*Input) + MSD 0.95*PrintD) 53453 52090 <1
Table 6 - Variables part 1
Legend table 3
PrintD: Print declaration
AUTH: Authorize request
MD: Make decision
OKSUPER: Request categorized at OK level supervisor
RecBG: Receive background from client
TA: Technical Analysis
GetBG: Get background from client after the technical analysis
OKCONT: Request categorized at OK level controller
FBL: Feedback loop, when backgrounds are received from the clients, they are sent back to the technical analysis.
MSD: Mark signed declaration

Variable (#) Equal to (#) Value 1 Value 2 %
(SignRQ) (L)-(C)-(RC)+(RDE) 63801 64362 <1
(E2) (5/95)*0.86*(E1) 497 557 12
(M) (L)-Σ(End1,2,3) 41640 42722 2.6
(RQ Auth. VP Sales) 0.03*0.05*((SignRQ)-(RDE)) 61 73 20
Σ(Contact&Inform1,2) 0.05(L-C) + 0.95*RC 2714 2736 <1
Table 7 - Variables part 2
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Chile – University of Technology 26 May 2005
Legend table 4
L: Signed documents coming from part 1
C: Laid off documents for completion
RC: Recover copies (No employee)
RDE: Request with digitalization errors
E1&2: Notification to employer out of town
M: (Approved) request to be sent by mail

There are differences in the outcomes, and for two variables these look pretty significant. At closer look we notice that the values
of these variables are the smallest of them all. A small difference in outcome means a bigger difference in terms of percentage.
The difference can be explained from this point of view, that the influence of distributions has a more fluctuating impact on the
smaller amounts.
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Chile – University of Technology 26 May 2005
Appendix 12 – Validation
Different outputs, such as the total subscription period, number of entities and different process times are used to consult
experts. Table 10 shows the variables, their computed and their expected value, usually per month. In the second column of
values the results are shown when the requests are delayed by the agents in the beginning of the process.
Variable C-Value Delay X-Value
3
Average subscription time accepted requests (days) 11.8 14.1 12
Average subscription time rejected requests (days) 9.0 11.5 7
Average waiting time at Control Production (hours) 3.4 4.4 4
Number of successful requests 5800 5808 5500
Number of requests with errors after Control Production 615 660 630
Number of clients that don’t accept restrictions 280 290 40
Number of requests for background 1350 1270 1250
Number of clients that don’t deliver background 266 250 300
Number of rejections after Technical Analysis 262 258 280
Number of requests through process Sign RQ (incl. RDE) 8231 8334 8500
Number of requests through process Control Production 6555 6660 6500
Scheduled utilization manager 0.18 0.18 0.20
Scheduled utilization front desk employee 0.03 0.03 0.10
Scheduled utilization agent 0.59 0.58 0.75
Scheduled utilization control production 0.81 0.83 0.85
Scheduled utilization technical analysis 0.66 0.69 0.75
Table 8 – Validation
From this table can be derived that the model represents the expected reality (by experts) relatively well. First of all it is
important to recognize the possible influence of the delay caused by the agents in order to let every other agent make its
minimum. Because the information about this strange procedure was provided very late and was also very uncertain, it cannot
be taken into account with our further analysis, but it will be taken into consideration at the recommendations. This does not
make the analysis useless, because the focus will be on the changes certain alternatives will bring within possible future
scenarios. It does not has to show the true values, but a comparison will be made between these benchmark values and the
results that the alternatives will bring.
3
X-Value is the value expected by experts.
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Chile – University of Technology 26 May 2005
As can be seen in the table, the utilization of the resources is lower than expected, which can partly be explained from the fact
that they work 2 hours less on Friday. This change in utilization of 4,7% is not taken into account in the simulation. For the agent
still leaves a gap between the outcome and the expected value of 11%. Probably there are some inaccuracies in the model or
some processes missing that are normally done by agents.
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Chile – University of Technology 26 May 2005
Appendix 13 – Computerization options, process changes
The following processes will change for each option. Assumed is that for every option, the earlier changes in processes stay. The
possibilities are handled in this specific order as well, in order of digital advancement.
Evaluation module
Revision and signing and Categorize
It will partially take over the Sales manager task to revise and sign the request and to decide how to categorize the
incoming requests (See appendix 4 Process: Categorize). The evaluation module will take over the decision making in this
specific process (categorize requests). The evaluation module has only three different outputs:
a. Ok nothing to declare
b. Send to BRE (Technical analysis)
c. Ok level supervisor
Send request to controller
This process is still done manually, but is considered redundant after implementing the Evaluation module.
Business Rules Engine
Technical analysis, Decision, Authorize-, Reject request and Ask background
After implementing the BRE the request that has been judged by the sales manager (or the Evaluation module) as ´Ok
level supervisor´ will be digital send to the BRE, which will execute the technical analysis. Also the decision about the
request after the Technical Analysis will be made by the BRE.
An overview of the implementation of above two options can be clearly seen in the new interaction-flow diagram in appendix 15.
All paperwork digitalized
Part 1
Fill out form and enclose background
When a client requests a police at the front desk, the following is applicable. In case of an agent who visits a client to cell
a policy this is not applicable. Instead of filling in the declaration form on paper, the client and the agent fill out the
necessary information into a computer.
Agent digitalizes declaration
This process is not necessary anymore because the form is already digital. However the agent has to do something else.
Instead of digitalizing the declaration form, the agent now has to scan the background papers.
Request to complete form
Neither this process is necessary, because after filling out the form, the software will automatically alert the client that the
form is incomplete and will directly notify the client which information is still missing.
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Chile – University of Technology 26 May 2005
Fill out documents
This process will also be done digitally. The agent will fill out all the documents in a computer, because all the information
is still in the computer, and will send the information afterwards to the client.
Part 2
Digitalize request
Obviously this process will not be part in this new digital environment, because nothing has to be digitalized.
Sign request
This process consists of two small processes, which are comparing the paperwork with the imported data and validate this
data. Of these processes the first will drop out in this new situation.
Prepare and complete documents
These two processes as well can be demarcated when everything is digitalized. There are no documents to prepare and
everything is, with the right software, well arranged.
Control production
This process, which currently deals with checking paperwork, will be fully digital. Requests, if not rejected, go directly to
mail, making the processes that deal with errors superfluous. The time per request will be zero, because it all happens
automatically.
Not only processes will change, also some of the decisions and flows are subject to change. There is no production laid off,
because requests flow through the system much and much faster than in the old situation. Neither are there requests with
digitalization errors, not after signing nor after control. Especially the second part has undergone a big change, so a new
interaction-flow diagram is made in Appendix 16.
Agent with IPAQ
Part 1
Fill out declaration and enclose background, Agent digitalizes declaration
This process will be done digitally, using an IPAQ to import the client’s data (including the background). If the request
cannot be processed automatically and a sales manager or controller has to process it manually, there will be send a
message to the IPAQ with the approximate delay of the information. The agent can then decide together with the client
what to do next (wait, make a new appointment).
4
Print declaration
The request is digital, so there is no need for a printed form to sign the restrictions. Possibly a receipt, without legal value,
can be given to the client. The receipt is without legal value, because then, in case of a non-approval later on, the request
does not have to be retrieved at the client.
Send rejection to client
4

This however is not taken into account in the simulation. See for more information the assumptions in Appendix 14.
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After the request has been analyzed the request can be rejected. This information will be directly sent to the IPAQ of the
agent. The agent who is still with the client can inform the client directly about the rejection.
Send information to client, Mark declarations not specified, Sign restrictions, Mark signed declarations, Fill out documents, Sign
document by client
The following processes will be totally different. If the request is simple and can be analyzed directly using the Evaluation
Module and/or the Business Rule Engine, the client will be able to directly sign the restrictions and the documents. If the
request is complex, thus it needs a more specific analysis for categorization or technical analysis, the agent will visit the
client a second time for acceptation and signing. The marking of declarations is done by the sales agent instead of the
sales manager in the new situation, using the IPAQ.
Part 2
Recover client copies, Contact and Inform clients
These processes will be turned into one process of informing the client, because there are no documents to be retrieved.
Cancel request, Request authorization etc.
The flow stops after the client is informed, hence there will be no flow after the above mentioned process.
Web based application
Part 1
Fill out form and enclose background
This process will be done by the client, wherever he feels like. There is no need for an agent to assist, because the website
is clear and should be understandable for everyone. The background information however still might have to be handed in,
which is possible via normal mail.
Agent digitalizes declaration
This process becomes partially redundant. The declaration is already digital but the incoming backgrounds have to be
scanned and attached to the digital requests.
Request to complete form
This process will also be incorporated in the website and will automatically send a notification when there is information
missing in the declaration form. Hence the process will also be redundant.
Print declaration, Send information to client, Send rejection to client
These processes become also redundant. The information will be send to the client automatically via email.
When the agent receives the enclosed background papers and has scanned them, the automated process starts. Eventually after
these processes of categorizing and evaluating certain information has to be send to the client. In case of acceptance of
restrictions, an email notification will be send to the client telling to sign the restrictions at the website.
Mark declarations, Mark signed declarations not specified
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Chile – University of Technology 26 May 2005
These processes will be abundant when using the website to apply for a policy. The software behind the website will be
sufficient for detecting errors or anomalies in the declaration form.
Sign restrictions, Fill out documents
The signing of the restriction will also be done digitally through the website. When the restrictions are signed the
information is send to a sales agent who will fill out the documents and visits the client to sign the contract.
Part 2
Recover client copies, Contact and Inform clients
These processes will be turned into one process of informing the client (by email), because there are no documents to be
retrieved.
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Chile – University of Technology 26 May 2005
Appendix 14 – Demarcation and assumptions digitalization
The following assumptions have been made according to Future Underwriting:
1. The Evaluation module can process between fifty and seventy percent of all incoming requests. There is no need for a
sales manager to interfere with these requests. However the other thirty to fifty percent contain too much specific
information or anomalies that they still have to be processed manually.
2. Estimated is that around eighty percent of the incoming requests can be processed by the BRE. The other twenty percent
will then be processed in the same way as they do now.
3. Restrictions can be accepted digitally, which does not always involve an agent or legal documents.
4. When all paperwork has been changed into digital format, the production that will be laid of is nil.
5. There are no digitalization errors in the second part of the subscription process.
6. Legal documents that are handed to the client are valid from the moment that they get their confirmation by mail (last
process), hence, early contracts are restricted.
7. There are simple and complex requests. Simple requests can be handled electronically by the Evaluation Module or by the
Business Rule Engine, complex requests cannot.
8. In case of a sales agent that has to leave a client, because for example the process has to be done manually, the sales
manager will mark the declaration as in the current situation. Only when a sales agent is capable of perform the whole
process with the client at once, he is authorized to mark the declarations instead of the sales manager
9. In case of computerization of parts or entire processes, the process will be assumed not significant and simulated as 0
minutes for processing (just a few calculations within a computer program).
Digitalize paperwork of sales division
10.The processes Fill out declaration and enclose background and Digitalize declaration, are now done in one process. Filling
out the declaration form takes around 15 minutes and enclose the background 2 more. Digitalizing takes another 23
minutes. Assuming that the front desk employee is experienced with entering information in the form, so this will be a lot
faster than a client who has to fill out the declaration for the first time. Assumed that will have an efficiency gain of 70%,
so the fill out process will be around 0.70*15 = 11 minutes. Enclosing background will be the same, adding 5 minutes
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Chile – University of Technology 26 May 2005
extra for asking the client the necessary information during the process will make a final process time of around 11+2+5
= 18 minutes.
11.The process Fill out documents will be done in the computer and assume that there is an efficiency gain (no problems with
handwriting, clear form in computer etcetera) of around 80 percent. The process takes now around 20 minutes; 0.80*20
= 16 minutes digitally
12.When digitalizing processes, it will be possible to extend the tasks of a front desk employee. Processes that follow after
the automated EM and BRE will be done by the front desk employee (mark declaration, sign restrictions and fill-out
documents). In this case it is possible for a client to leave the front desk after the first visit with a signed contract. This
however is still in the case when there is no need for manually processing of the above mentioned processes.
Agent with IPAQ
13.When the agent will process the different actions with his iPAQ i.e. Mark declarations, fill out documents and sign
documents by client. Assumed is that the time to perform these processes will be the same as is, in the current case.
14.When a request cannot be processed immediately through the EM and BRE, the result will be delayed. The agent gets a
notification of the approximate time of delay and can then decide if he stays and wait, or make another appointment.
Because at this point it is not clear to what extent this is possible and secondly there is no information about how long a
client will wait for it. Therefore it is assumed that sales agents always leaves the client’s residence and comes back
another time when:
a. The categorization process has to be processed manually.
b. The technical analysis process has to be processed manually.
c. Additional background papers are asked after the technical analysis.
15.Digitally signing is an accepted and legal agreement and can be done with the IPAQ.
16.No legal document will be transferred to the client, so the agent does not need to recover any, if rejected later in the
process.
17.When a request is rejected later in the process, the agent still visits the client to inform and possibly make another deal
(this won’t be taken into account).
18.The additional background will probably not be in digital format, but this will be digitalized by the agent back at the office,
either by scanning or by importing into a computer program.
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Chile – University of Technology 26 May 2005
19.There is software supporting the subscription through IPAQ, taking over all paperwork at the client.
20. Only in the first scenario the agent has to bring paper contracts with him, when visiting the client. This because there is
no possibility of legal digital agreements yet.
Web-based subscription
21.In the initial process, fill out declaration and enclose background, the client has to enclose background such as medical
forms etcetera. The client will fill in the necessary information from these background documents through the website.
Because of authenticity of the documents, the client still has to send these to ING. But this will not be modeled as a delay,
only will be marked as a request which needs additional background later on in the process.
22.The delay for fill out the declaration form by the client will be assumed as about the same as when a sales agent performs
this process. However 5 minutes is added, because there is no sales agent present to help in cases of unclear things.
23.The client has to send the background by mail where a sales agent has to scan the background and send the digital
information to the Evaluation module. This delay will be around 1 day.
24.However possible without, the agent will visit the client to let them sign the contract. This for speeding up the process (do
not have to wait for a client to send the contract) and building-up a more personal relation with the client.
25.If a request is complex, this is notified to either the agent’s IPAQ or the front desk employee, so that these resources can
make another appointment with the client. If the client does a request over the internet this will be notified as well.
26.Clients cannot only apply through the internet, but can also have legal agreements using the internet, no agent is needed
for this  a (restricted) policy can be sold without interference of any resource (part 1 of the subscription process).
a. In scenario 1 this is not possible. In this scenario there are still legal problems and the agent still have to visit the
client to let him sign the documents.
27. Assumed is that the website can detect errors or missing info in that manner, that there is no need for marking the
declaration form by a sales manager or sales agent. These processes will thus be excluded.
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Chile – University of Technology 26 May 2005
Appendix 15 – Interaction-flow diagram part 1, Evaluation Module and BRE
Client Sales Medical
NO
YES
YES
NO
Sign
restrictions
ACCEPT
Fill out declaration
form and enclose
background
MS
Request to
complete
form
End
TA
Mark signed
declaration
Get
background
Deliver
background
TA
Evaluation Module
Send
information to
client
Digitalize
declaration
Print
declaration
End
MS
Receive and
send
background
Mark
declarations
Not specified
Fill out
documents
Sign
document by
client
L
S
Send rejection
to client
End
BRE
Client enter
FrontDesk
Agent Calls
to make an
appointment
Agent visits
client
The implementation of the Evaluation Module (EM) and the Business Rules Engine (BRE) only affect changes in the first part of
the underwriting process. The second part will still be the same as the current process. This diagram presents the case where EM
and BRE take over all the manual activities. In reality there are still some cases where manual processing is needed and this will
be done like in the current situation, see appendix 4. This however applies for all the other revised interaction-flow diagrams in
the following appendices.
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Chile – University of Technology 26 May 2005
Appendix 16 – Interaction-flow diagram, digitalized sales division
16.1 – part 1
Client Sales Medical
NO
YES
YES
NO
Sign
restrictions
ACCEPT
Fill out declaration
form and enclose
background
MS
End
Send request
to controller
TA
Mark signed
declaration
Get
background
OK Level
Controller
OK Level
Supervisor
Deliver
background
TA
Reject
Revision &
signing
Categorize
Authorize
request
Send
information to
client
Ask
background
Print
declaration
End
MS
Receive and
send
background
OK
Nothing
to declare
Decision
Mark
declarations
Not specified
Fill out
documents
Sign
document by
client
L
S
Send rejection
to client
Technical
Analysis
End
Client enter
FrontDesk
Call client for
an
appointment
Visit client
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Chile – University of Technology 26 May 2005
16.2 – part 2
Delay at
employer
L
RQNoti fied
Val idate data
YES
NO
E1
Approve
RQ
NO
YES
Contact and
i nform cli ents1
Deli ver
copi es
Cancel RQ YES End1
Request
Authorization
VP.Sal es
NO
M
Control
production
SF E
SF
Error
No
empl oyee
Outcome
RC
Cancel RQand
take care of errors
S
M
End
Mail
process
Send RQ
other ci ty
Notify
employer
Client Sales Control Production Employer Mail
Outcome
control
One week between
send and receive
notification, done
by external
company
Appr. Rej.
End3
Approval
RC
These requests wil l be rejected at
control producti on
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Chile – University of Technology 26 May 2005
Appendix 17 – Interaction-flow diagram, all digital
17.1 – part 1, iPAQ
Client Sales agent ING Server
NO
YES
YES
NO
Sign
restrictions
ACCEPT
Fill out declaration
form and enclose
background
End
TA
Mark signed
declaration
Get
background
Deliver
background
TA
Evaluation Module
End
Receive and
send
background
Mark
declarations
Not specified
Fill out
documents
Sign
document by
client
L
S
Send rejection
to client
End
BRE
Agent Calls
to make an
appointment
Agent visits
client
AC
AC
FO
FO
Request to
complete
form
FD
FD

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Chile – University of Technology 26 May 2005
17.2 – part 1, Web based application
Client Sales agent ING Server
NO
YES
YES
NO
Sign
restrictions
ACCEPT
Fill out declaration
form and enclose
background
End
TA
Get
background
Deliver
background
TA
Evaluation Module
End
Receive and
send
background
Fill out
documents
Sign
document by
client
L
S
Send rejection
to client
End
BRE
AC
AC
FO
FO
Client enter
Website
Request to
complete
form
FD
FD
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Chile – University of Technology 26 May 2005
17.3 – part 2
Delay at
employer
L
RQNoti fi ed
Validate data
YES
NO
E1
Approve
RQ
NO YES
Contact and
i nform clients
End
M
Control
production
SF E
SF
Error
No
employee
Outcome
RC
Cancel RQand
take care of errors
S
M
End
Mail
process
Send RQ
other city
Noti fy
employer
Client Sales Control Production Employer Mail
Outcome
control
One week between
send and receive
notification, done
by external
company
Appr. Rej.
End
Approval
RC
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Appendix 18 – External variables
First, when searching for external variables it is useful to list the different processes of interaction with other parties in the
process. Processes within ING are not interesting within this context, because they can be revised by ING whenever they want
to. Behavior of other parties on the other hand is more difficult and almost impossible to influence. Therefore the processes,
which involve different parties, are listed and questions about possible external variables that have an influence on their behavior
postulated below.
The processes (per party) listed below are the same in the interaction flow diagram (see appendix 15-17).
Client
Client enter front desk
• Why do they prefer to go to the Front desk?
o Do they favor personal contact when they first apply for a policy?
o Do they like to go out for applying?
Sales agent calls client for an appointment
• Do clients like to be called by agents selling policies?
• Do they favor a sales agent visiting them at home?
• Do they prefer to stay at home instead of going to an office?
• Does the personal contact (agent visits a client at home) plays a significant role in agreeing to make an appointment?
Fill out declaration form and enclose background
• Agent’s influence on the client’s behavior is not taken into consideration.
Accept and sign restrictions or documents
• Will clients accept signing via websites in the future?
• Will clients accept digital signing via iPAQ?
• Is their a significant influence of a sales agent upon the decision to accept or deny restrictions or documents?
Deliver background or copies
• Is there a significant influence of a sales agent upon the decision to Deliver the background or copies?
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Chile – University of Technology 26 May 2005
Employer
Notification employer
• What are the incentives for an employer to send the notification back quickly?
• Will the employer accept digital notification or notification via a website?
Government
• Does the government allow digital archiving?
• Does the government allow digital signing or legal agreements via internet?
A short recapitulation brings us to the following main external variables that can be listed after taking all the questions above
into consideration:
1. Importance of personal contact for the client with ING
2. Use of internet
3. Acceptance of digital agreements (government policy)
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Appendix 19 – Recommendations
Process
Agents
Number of clients per day
Travel time per day
Real process times
Number and length of breaks
Time-intensive processes, distributions
Input
Number of calls per day
Percentage successful
Call time successful/unsuccessful
Number of clients who go to front desk
Process logic
Missing processes
Sequences
Scenario-analysis
Technology
Internet coverage (trend)
Technological possibilities
Digital signing
Software for new data storage
Interface possibilities for website and iPAQ
Clients
Needs and opinions
Agent’s help/assistance
Subscription over internet
Government
Rules and laws
Data storage
Client’s documents
Digital agreements
Possible changes
45