This report talks about the problems faced by Fruitvale branch of Manzana Insurance in the mid 1991 and recommendations given to them. Manzana insurance specializes in commercial insurance but the Fruitvale branch handles only property underwriting. Currently the branch is confronted with problems like high turnaround time, reduced profits and stiff competition from other players. Performance of the Fruitvale branch
The Fruitvale branch of Manzana Insurance is highly underperforming and its profitability has been declining over the years. We can see the following as per the Trend Analysis of Quarterly Financial Summary & No of Policies Processed (refer excel sheet tab Trend #5 and Trend #6) 1. Flat Growth in Gross Premiums Although new policies and endorsement premiums have grown by around 40% over the last 10 quarters, because of the renewal premium remaining flat there has not been sizeable increase in Gross premiums. 2. Profits started declining from Q4 1989 and now the branch is under losses from the last two quarters.
3. Number of RUNs processed have increased by 23% over the last 10 quarters but the RERUNs processed have decreased by 18%
4. Renewals lost has increased by around 150%
5. Turn Around Time has increased by 30%
Competition has been brewing up for Fruitvale and they are underperforming as compared to Golden Gate, which is taking away major chunk of its business.Following exhibit shows the comparison of number of policies between Manzana and Golden Gate:
Main problems and their causes
Incorrect method of TAT Calculation
The Turn Around Time (TAT) calculated for the fruitvale branch has some inherent problems: 1) The TAT is based on calculating the time to complete the backlog and the new policies at the desk of each department and then arithmetically adding ...