Deutsche Allgegeinversicherung

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Executive Summary
Deutsche Allgegeinversicherung (DAV), the second largest insurance firm in Germany, had decided to adopt a new quality improvement initiative: The Process Measurement and Improvement (PMV) in order to maintain its prominent position due to the looming competition and increasingly customer demands. Kluck, the architect behind Prozessmessung und Verbesserung, was head of Operation Development at Deutsche Allgemeinversicherung (DAV). The PMV project was a revolutionary effort to use manufacturing-style improvement techniques in insurance services; it will differentiate DAV in the industry and hopefully, maintain its prominent position. Kluck, however, was facing a number of difficult problems with the improvement phase of the project. To begin to find out what accuracy levels were like throughout DAV, Kolb and Kluck selected New Policy Set-up as a pilot measurement project. The plan was to take a sample of the work carried out by the associates, and use that sample to infer what the general accuracy rate was in the New Policy Set-up process. To carry out the experiment, Kluck decided to use Statistical Process Control (SPC) which had traditionally been used for continuous variables such as the diameter of a piston. According to the SPC practice in manufacturing, a different kind of chart called a p-chart is used. In such a process, a person would measure five components every few hours, and mark the sample average and range of the measurement on the chart. In the case of New Policy Set-up at DAV, group should sample each other's work at the end of every day. Using the SPC will help with continuous improvement and help DAV keep its competitive edge in the insurance market.

TABLE OF CONTENTS
Executive SummaryPage 2
Issue IdentificationPage 4
Immediate IssuePage 4
Systemic IssuesPage 4
Environmental & Root Cause AnalysisPage 5
Qualitative AnalysisPage 5
Quantitative AnalysisPage 8
Alternatives and/or OptionsPage 15
AlternativesPage 15
RecommendationsPage 17
ImplementationPage 26
Monitor and ControlPage 30
Monitor and ControlPage 30
Conclusion and Management PlanPage 30

Issue Identification
Immediate Issue
Insurance was becoming more ubiquitous and customers were having a hard time differentiating one firm from another. Of all their core capabilities, DAV’s customer service was seen as the best way of standing out of the insurance crowd. DAV management believed that customer service was a critical element in DAV’s strategy to maintain current customers and attract new ones. In achieving this goal, DAV set out to improve on the quality of its service by reducing variability in its process. DAV needs to define what quality means to their organization and how to improve and maintain high levels of customer service. Systemic Issues

* One element of customer service that needed to improve at DAV was the ability to process information and data without mistakes, and the ability to retrieve it in a timely manner. Timing on this would be both short and long term. * The PMV project was launched and divided into two phases- Measurement and Improvement. Annete Kluck, head of Operations Development, spearheaded this process improvement project by implementing manufacturing-style improvement techniques to the insurance industry. Phase one was short term and moving into phase two will be short and long term. * Inconsistencies in service quality require systematic monitoring to see if they are random, regular, or indicative of a problem. Once the inconsistencies are determined it will be a long term quality improvement with consistent improvement. * Would these improvement techniques work, and if so, how will DAV use this information to actually improve the performance of the various processes and therefore improve customer service? To determine if these techniques will work in a...
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