D M A I C

Six Sigma Green Belt Project :

To improved 1st Renewal Billing Success Rate
from 80% to 93%

DEFINE
Start Date : 22 February 2010
Table of Content
1. Overview
2. Project Charter
• Problem Statement
• Business Case
• Goal Statement
• Scope and Milestone
• Roles and Responsibilities

3. Baseline Analysis
4. Voice of Customer
5. SIPOC
6. Critical Tree Mapping
7. Process Mapping
Overview
• 1st renewal billing refers to 1st premium deduction after the initial premium.
• This project covers billing process end to end for Easy Life Regular Premium in Life 400 system.
It is essential for regular premium policies to billed a monthly renewal premium or the policy will
turn into lapse and/or Premium Holiday.
• The root cause analysis for the 1st renewal billing failure will be a very important measure to
boost monthly billing capability. This will enable us to detect the root cause of the unsuccessful
billing at early stage by doing it right at the 1 st time.
• Currently, 2 payment method available are by Direct Debit from CIMB Bank account or via Credit
Card.
• Payment mode is available by monthly, quarterly, half yearly and yearly depending on customer
request at point of proposal submission.
• For direct debit, all account are required to be registered in DDS/Direct Debit System. The
registration is done through iCIMB.
• The Billing unit of Policy Servicing are responsible to send a client list for direct debit to EDS for
every billing cycle on 1st, 15th, 25th and 27th every month. CIMB Bank will send billing success
report via text file after each attempts. The attempt will consider as failure if the premium
unsuccessfully debited from the client account.
• Credit card payment will be consider as failure if the credit card failed to be debited.
Project Charter : Problem Statement
June (2009) – Feb (2010)

• We have billed a total of 9,740 policies for 1 st renewal. However 1,949 policies failed at
1st renewal billing.

Months No of Transaction Ist renewal Successful Ist renewal unsucessful Success rate (%) Unsuccess rate (%)
Jun-09 1,414 1,067 347 75 25
Jul-09 1,138 932 206 82 18
Aug-09 2,434 2,015 419 83 17
Sep-09 1,779 1,447 332 81 19
Oct-09 1,456 1,126 330 77 23
Nov-09 475 389 86 82 18
Dec-09 420 341 79 81 19
Jan-10 382 270 112 71 29
Feb-10 242 204 38 84 16
TOTAL 9,740 7,791 1,949 80 20
Increase to 93% 9,740 9,058 682 93 17
Current status 80%
Increase to 93 %
Project Charter : Problem Statement

Months FYAP Ist renewal Successful Ist renewal unsucessful

Jun-09 1,980,426.90 1,524,976.50 455,450.40
Jul-09 1,219,103.40 1,006,014.00 213,089.40
Aug-09 1,990,286.40 1,643,219.40 347,067.00
Sep-09 1,369,501.55 1,118,973.45 250,528.10
Oct-09 1,073,325.60 841,816.80 231,508.80
Nov-09 378,610.80 312,484.80 66,126.00
Dec-09 430,254.00 361,296.00 68,958.00
Jan-10 369,518.40 280,059.00 89,459.40
Feb-10 215,236.40 183,395.60 31,840.80
TOTAL @ 81 % 9,026,263.45 7,272,235.55 1,754,027.90

Potentially we will lost this amount of FYAP

if 1st renewal billing unsuccessful (foregone)
 Project Charter: Business Case

• From Jun 2009 – Feb 2010 , 1st renewal billing successful rate is at 80%.
• From Jun 2009 – Feb 2010, a total number of 1,949 polices failed at 1st renewal billing. This policies will be the
result of lapse and/or premium holiday by the 38 days.
• If 1,949 policies lapse after 38 days, potentially we will not able to collect RM1,754,027.90 of FYAP.
• This is a lead indicator for persistency rate.
!

1st renewal billing successful rate is 13% lower then billing team KPI of 93% Current success rate is 80%

Potential lost of FYAP for unsuccessful policies RM1,754,027.90 low profit margin and low retention
rate for the policies

Total number of polices failed at 1st renewal billing 1,949 polices

 Project Charter: Financial Benefit

1st renewal 1t renewal Increase FYAP by

Success Rate FYAP Successful unsuccessful 1,122,189.46
Current at 80% RM9,026,263.45 RM7,272,235.55 RM1,754,027.90
Increase to 93% RM9,026,263.45 RM8,394,425.01 RM631,838.44

80% 93% Save RM380

Operational Cost Current After
Cost of Mailing 1,949 x 0.30=RM584.70 682 x 0.30=RM204.60
Save by RM38.01
Cost of SMS 1,949 x 0.03=RM58.47 682 x 0.03=RM20.46

Importantly, this is a Leading indicator towards achieving the target of 75% persistency rate.
Project Charter: Goal Statement

Defect Definition
Total unsuccessful of 1st renewal billing x 100%
Total 1st renewal billing submission.

• To be able to identify the root cause of the unsuccessful billing for 1 st renewal for both
payment method.
• To improve the success rate of 1 st renewal billing to 93 %
 Project Charter: Scope & Milestone
Scope :
The project covers billing process for Easy Life regular premium in Life 400 system
conventional
for 1st renewal billing for all attempts for credit card and direct debit

Key Milestone and Timeline

Phase Training Coaching Tollgate date

Date Date
Define 22/02/2010 -23/02/2010 08/03/2010 12/03/2010

Measure 15/03/2010 – 19/03/2010 24/03/2010

16/03/2010
Analyse 29/03/2010 – 07/04/2010 14/04/2010
30/03/2010
Implement 19/04/2010 – 28/04/2010 05/05/2010
20/04/2010
Control 10/05/2010 – 19/05/2010 26/05/2010
11/05/2010
Project Charter: Roles & Responsibilities

Team Role Define Measure Analyse Improve Control

member

Kevin Jones Sponsor     

Yahya     
Adnan Champion
Selveen     
Muniandy MBB
Raja Intan GB     
Masrina
Fauziah SME     
Shaari
Noor Faizah YB     
Jamak
Ken Ngooi YB     
Penny Finance     
Chien Rep
Baseline Analysis : 1st Renewal Billing Success Rate (%)
Baseline Analysis : 1st Renewal Billing Success Rate (%)

Payment Method Comparison

Jun 2009 – Feb 2010
Baseline Analysis : Payment Method Comparison

83% of customers prefer

to use direct debit
 D M A I C

SIPOC – Billing Process Direct Debit

S I P O C
Suppliers Inputs Process Outputs Customers

START
• Customers • Customer Registration file generated • Registration • Customer
from AS400
information report - success
• PFA / PFC • Billing
Send file to bank or failure
• Auto debit section
• Billing • Premium
deduction Upload registration results
section form deducted from
to AS400
account
• Billing listing Update account details
in AS400 • Notification to
• Account
Billing file generated from customer
registration AS400
listing • Billing report -
Send file to bank success listing
or failure
Send file to APRO to listing
update payment

Generate Billing Status

Report

END
 D M A I C

SIPOC – Billing Process Credit Card

S I P O C
Suppliers Inputs Process Outputs Customers

• Customers • Customer START • Premium • Customer

information Billing file generated deducted
• PFA / PFC • Billing section
from AS400 from account
• Credit Card
• Billing section • Notification to
deduction Send file to bank
form customer
• Billing listing Send file to APRO to
• Report –
run batch jobs success listing
or failure
APRO update listing
payment

Generate Billing
Status Report

END
Voice Of Customer – Internal Customer (Billing)

VOC CTQ Customer requirement

Category CTS
Low success rate for No of successful transaction Billing success rate (≥) 93%
Direct Debit
Success rate for reminder letter Low of feedback received Feedback received (≥) 90%
are low

SOURCE: Billing unit, Easy life unit

 Voice Of Customer – External Customer

VOC CTQ Customer requirement

Category CTQ
Preference for other bank account for Quality > then 2 Choices of bank account
Direct Debit

Choice of billing date for customer Timeliness & Quality > Then 4 Billing cycle

No notification letter/sms sent on the Quality > 1 language for notification letter
premium due

Limited to 2 option of payment type – Quality > Then 2 choices of payment

Direct Debit & CC only remittance

SOURCE: Billing unit, Easy life unit

Critical Tree
Process Mapping
Credit Card Billing: 1 st, 15th and 27th of the month

AVIVA APRO BILLING UNIT

3.0 Retrieve billing file

Start from PAXFLR and
verify file

1.0 Billing file auto- 4.0 Upload file to CIMB

A
generated by Life400 e-Merchant website

5.0 Pickup processed

2.0 Store file in
file/s from CIMB e-
PAXFLR
Merchant website

6.0 Place Billing pay file

in PAXFLR

8.0 Run batch jobs to

7.0 Email to APRO to
update payments and
proceed with batch jobs
generate reports

11.0 Verify
Billing
y premium has been
successful
updated

no
9.1 For 1st of the month
billing, send
unsuccessful deduction
letter

9.2 For 15th and 27th

billing, send SMS
notification

10. Forward
Unsuccessful End of 12.0 Prepare monthly
y
Deduction Listing to month? billing reports for HOD
Channel Mgt

13.0 Prepare for next

no
billing download
End

A
Process Mapping
Direct Debit Billing: 1 st, 15th, 25th and 27th of the month

AVIVA APRO BILLING UNIT

3.0 Retrieve billing file

Start from PAXFLR and
verify file

1.0 Billing file auto- 4.0 Send file to ICIMB

A via FTP with fax copy
generated by Life/400
of cover letter

2.0 Store file in 5.0 Pickup processed

PAXFLR file/s from FTP server

6.0 Place Billing pay file

in PAXFLR

8.0 Run batch jobs to

7.0 Email to APRO to
update payments and
proceed with batch jobs
generate reports

11.0 Verify
Billing
y premium has been
successful
updated

no
9.1 For 1st of the month
billing, send
unsuccessful deduction
letter

9.2 For 15th, 25th and

27th billing, send SMS
notification

10. Forward
Unsuccessful End of 12.0 Prepare monthly
y
Deduction Listing to month? billing reports for HOD
Channel Mgt

13.0 Prepare for next

no
billing download
End

A
THANK YOU