Case Study

Manzana Insurance: Fruitvale Branch

Group-1
Abhishek R
Vaishnav Ashok
Vishnu Sankar

1. How is the Fruitvale branch doing?

There are inefficiencies of operations at Manzana Fruitvale branch. The concerns are Declining
Profits, Policies Backlog, Improper workload balance amongst employees which is either tight
schedules or idle time for staffs and Increasing TAT meaning total time required to complete
insurance request process as compared to its competitor Golden Gate which it recently had
announced TAT of One Day. Golden Gate gave a tough competition which resulted in higher
renewal Loss rates and late renewals.
The Fruitvale branch is making a whopping loss in the quarters of 1991 and the Golden Gate is
giving a tough competition to Manzana Fruitvale branch. They are facing loss due to rising level
of settlements on liabilities.

2. What are the causes of these problems?

The Improper Use of Resources:
No proper work distribution among teams like either one is working continuously while the other
is idle. According to reports there is a huge difference between average working hours and
capacity of people i.e. capacity is higher than the average working hours.

Prioritization Method:
The company policy of Manzana is FIFO Method (First-in-First-Out), but was practiced
differently. RAINs and RERUNs were given priority like RAPs and RUNs. This resulted in a
backlog of RERUNs as the emphasis was on new requests and agents were given notice on the
last day.
Flaw in TAT:
Mean time for processing a request wasn't taken but followed Standard Completion Time.

Renewal Loss:
Since importance was given to RAP and RUN methods, loss was faced in renewal according to
data calculated, being noticed was sent on the last day to agents, which gave agents the
chance to recommend other insurance companies to clients

3. Can you identify the problems in the way Manzana is calculating turnaround time in
Exhibit 3?
The turnaround time shown is incorrect. Instead of using mean process time, they used 95%
Standard Completion Time (SCT) which is much higher than the average of 50%. The 8.2 days
of turnaround time is the result of the wrong calculation they used. It indicates the time per
process is overestimated. Golden Gate’s TAT of 1-2 days compared to Manzana was the clear
reason for their struggles to be on par with them.

4. If you were Bill Pippen, What would you recommend that Fruitvale do?
Reduce Staff in Rating & Policy Writing:
According to case, rating has become mechanical and time taken to write a policy is decreasing
gradually in recent years.
Equal workload in employees:
Work should be evenly given to staffs because as of now some work whole day without a break
while some are idle
Staff Training:
Training helps in standardization of procedures. It should be mostly given to underwriters to
lessen time duration and increase in customers.
Follow FIFO and decrease TAT:
Every method should be prioritized be it RAP, RERUN or RUN. A modified FIFO method should
be used for sufficient process time before its deadline. Solve the requests which were submitted
early. TAT ensures service quality given. TAT should be shortened as Fruitvale has 5 days
compared to Golden Gate which is 1 day.