Manzana Case
Business Issues
The profitability of Manzana Insurance Fruitvale branch was declining. There were mainly contributed by,
Increasing backlog policies since 1989, and the number of RUN and RAIN appeared to be stagnating.
Rise in late renewals resulted in increasing renewal loss rate. The renewals are decreasing and had a high renewals late rate 44%, which led to an extremely high renewal loss rate 47%, while Golden Gate’s is at just 15%.
High turnaround time. Manzana increased TAT to 5 days, Goldengate currently had 2 days and just announced a guarantee of 1 working day.
Unbalancing workload
Causes & Recommendations:
1) Optimize utilization of work force both interdepartmentally and within Underwriting department; Conduct cross functional training for DC, Rating and Policy Writing
Manzana could provide cross functional training so that employees in DC, RT and PW could be flexible to reassign depends on the different demand. The exhibit A shows the current unbalance workload between departments (the idle time for RT and PW could be even more because of computerized system). The exhibit A also shows a new capacity utilization for the scenario of reassigning one from PW to DC. Moreover, the technological improvements in early 1990s would help consolidate the cut down the size of Rating and Policy Writing dept.
The exhibit B shows unbalanced workload among three territory teams. Team 1 was overwhelmed by 92% utilization while team 3 was 70%. Besides, comparing the loss rate among three teams, even it might not be resulted from the utilization level, the overburden workload definitely affect the efficiency of work and satisfaction of employee, which will ultimately hurt business.
2) RERUNs priority over RAPs
Current types of policies and process request in the priority order are RUNs (Request for Underwriting), RAPs (Price Quotes), RAIN (Policy Endorsement), RERUNs (Policy Renewal). The exhibit C tells that RERUNs should not got deteriorate priority for the benefit of
The profitability of Manzana Insurance Fruitvale branch was declining. There were mainly contributed by,
Increasing backlog policies since 1989, and the number of RUN and RAIN appeared to be stagnating.
Rise in late renewals resulted in increasing renewal loss rate. The renewals are decreasing and had a high renewals late rate 44%, which led to an extremely high renewal loss rate 47%, while Golden Gate’s is at just 15%.
High turnaround time. Manzana increased TAT to 5 days, Goldengate currently had 2 days and just announced a guarantee of 1 working day.
Unbalancing workload
Causes & Recommendations:
1) Optimize utilization of work force both interdepartmentally and within Underwriting department; Conduct cross functional training for DC, Rating and Policy Writing
Manzana could provide cross functional training so that employees in DC, RT and PW could be flexible to reassign depends on the different demand. The exhibit A shows the current unbalance workload between departments (the idle time for RT and PW could be even more because of computerized system). The exhibit A also shows a new capacity utilization for the scenario of reassigning one from PW to DC. Moreover, the technological improvements in early 1990s would help consolidate the cut down the size of Rating and Policy Writing dept.
The exhibit B shows unbalanced workload among three territory teams. Team 1 was overwhelmed by 92% utilization while team 3 was 70%. Besides, comparing the loss rate among three teams, even it might not be resulted from the utilization level, the overburden workload definitely affect the efficiency of work and satisfaction of employee, which will ultimately hurt business.
2) RERUNs priority over RAPs
Current types of policies and process request in the priority order are RUNs (Request for Underwriting), RAPs (Price Quotes), RAIN (Policy Endorsement), RERUNs (Policy Renewal). The exhibit C tells that RERUNs should not got deteriorate priority for the benefit of