Manzana Insurance

Submitted by Group 8
y Brief about Manzana Insurance y Problem faced y Operational flow y Errors in calculation of Manzana
y Calculation of operational activities y Turn Around time (TAT)
y Capacity utilization of Underwriters y RUN s queue of waiting y RUNs vs. RERUNs priority y Recommendations
y Manzana Insurance
y second largest Insurance company in the property
Insurance in California. y Main competitor: Golden Gate. y Acquired by Banque De Soil. y Case concern is falling Service levels at FruitVale Branch
y Hence profitability
y High and increasing Turn-Around Time (TAT) y Declining profitability y Policies backlog y Improper workload balancing
y Tighter schedules y Idle time
y Late processing of RERUNs due to prioritization y Non optimal utilization of work force y Very low conversion of RAPs and RUNs y Unbalanced workload among Underwriting Teams
Distribution
4 Clerks
Underwriting Team n =1,2,3

1 Underwriter 1 Technical Assistant
Rating
8 Raters
Policy Writing
5 Writers
Originating Agent
Operational Activities Distribut Underwri Policy ion ting Rating Writing Daily Activity 40 40 40 40 Tom Average time (MEMO) 40 30 70 55 Jacobss Required time 1600 1200 2800 2200 Employees/ Teams 4 3 8 5 calculatio n Capacity available 1800 1350 3600 2250 Utilization rate 89% 89% 78% 98% Daily Activity 39 39 39 29.25 Actual Average time (Actual, Ex 4) 41 28 70.4 54.8 Calculatio n Actual Required time 1599 1092 2745.6 1602.9 Utilization rate 89% 81% 76% 71%
y Instead of 95% Standard Completion Time (SCT), use
Mean Process Time (from 8.2 Days to 4.72 Days)

Total Turnaround Time (TAT)
Operating Steps RUNs RAPs RAINs RERUNs Workers/Team Total Through-put T Number of Requests 1 3 1 11 DistributionMean Time 4 0.32 68.5 50 43.5 28 Total Time Taken 68.5 150 43.5 308 Number of Requests Underwriting Mean Time Total Time Taken Number of Requests Mean Time Total Time Taken 4 43.6 174.4 5 75.5 377.5 5 71 NA 355 NA TOTAL 10 38 380 12 64.7 776.4 0 7 22.6 158.2 8 65.5 524 9 54 486 47 18.7 878.9 54 75.5 4077 56 50.1 2805.6
1.18
Rating
1.60
Number of Requests Policy Writing Mean Time Total Time Taken
1.62
4.71
RERUNs Total execution Policies (Ex 7) 162 761 196 636 1755 Mean time (Ex 4) 43.6 38.0 22.6 18.7 Total Time 7063.2 28918 4429.6 11893.2 52304.0 Average time/ request 29.80 14.63 Number of request per day (120 days in a half year) 435.87 Time utilized per day 97% Capacity utilization Policies (Ex 7) 100 513 125 840 1578 Mean time (Ex 4) 43.6 38.0 22.6 18.7 Total Time 4360 19494 2825 15708 42387.0 Average time/ request 26.86 13.15 Number of request per day (120 days in a half year) 353.23 Time utilized per day 78% Capacity utilization Policies (Ex 7) 88 524 130 605 1347 Mean time (Ex 4) 43.6 38.0 22.6 18.7 Total Time 3836.8 19912 2938 11313.5 38000.3 Average time/ request 28.21 11.23 Number of request per day (120 days in a half year) 316.67 Time utilized per day 70% Capacity utilization
RUNs
RAPs
RAINs
Territory 3
Territory 2
Territory 1
y Hence the RUNs are not spending time on people s
desk but due to miss match in capacity allocation

y Different set have different workload y Policy Writing are enjoying free time with 71% utilization y Underwriters of Territory 1 are having hectic schedule with 97% utilization y Even among underwriters the utilization is not well planned and hence delays
y Prioritizing RUNs seems to be an bad optionn over
RERUNs
y Runs increased at 2.5% quarterly where late RERUNs increased at
10.2%, raising renewal loss to 13.34%. y Agent fee for RERUNs is 7% as compared to 25% for RUNs, hence prioritizing RUNs is not a good option.
1989 Q1 Total RUNs Late RERUNs Renewal - number loss TAT (days) Increase in late RERUNs Increase in RUNs Increase in Renewal loss 263 205 193 4.7 Q2 262 191 205 5.7 Q3 270 220 232 5.1 Q4 273 201 219 5.6 Q1 266 225 400 5.9 Q2 276 248 414 5.1 1990 Q3 290 310 436 5.3 Q4 288 387 467 5.7 Q1
1991 Q2 298 425 429 5.8 326 468 497 6.2
-6.83% -0.38% -6.22%
15.18% -8.64% 3.05% -13.17% 1.11%
11.94% -2.56%
10.22% 25.00% 24.84% 3.76% -3.50% 5.07% -0.69% -5.31% -7.11%
9.82% 3.47%
10.12% 9.40%
5.60% -82.65%
8.14% -15.85%
y Calculation methodology for workload and TAT needs
revision y Removal of Priority queuing for RUNs to RERUNs y Load of Distribution and Underwriting team might need increase
y Load distribution for Underwriting team is a much needed
fact y Cross domain/ functional training might reduce workload

y Trade off of agent commisions and way underwriting is
performed
y Revision of commisions for RERUNs might play the trick
y Technological improvements where ever possible especially
in Policy Writing and rating stages

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Submitted by Group 8

Underwriting Team n =1,2,3

y Instead of 95% Standard Completion Time (SCT), use

Mean Process Time (from 8.2 Days to 4.72 Days)

Number of Requests Policy Writing Mean Time Total Time Taken

y Hence the RUNs are not spending time on people s

desk but due to miss match in capacity allocation

y Prioritizing RUNs seems to be an bad optionn over

y Runs increased at 2.5% quarterly where late RERUNs increased at

1991 Q2 298 425 429 5.8 326 468 497 6.2

-6.83% -0.38% -6.22%

15.18% -8.64% 3.05% -13.17% 1.11%

10.22% 25.00% 24.84% 3.76% -3.50% 5.07% -0.69% -5.31% -7.11%

y Calculation methodology for workload and TAT needs

fact y Cross domain/ functional training might reduce workload

y Revision of commisions for RERUNs might play the trick

y Technological improvements where ever possible especially

in Policy Writing and rating stages

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