Manzana Case Operations
Operations Management
Case Analysis - 2
Manzana Insurance (Fruitvale Branch)
Group 13:
ANALYSIS
INTRODUCTION
The Fruitvale branch of Manzana Insurance is facing stiff competition and is being severely outperformed by Golden Gate casualty Insurance. On every measure of performance, Fruitvale branch seems to be falling apart. Following are the problems faced by Fruitvale branch:
1) Turnaround Time (TAT) is too high
TAT, or the number of days between the receipt of a RUN and the issuance of a final policy, is an important indicator of service quality used by originating agents to help customer choose an insurance company. Fruitvale’s average TAT of 6 days for processing a request far exceeded Golden Gate’s guaranteed TAT of 1 day.
2) Large backlog of policies
The prime reason is that the computer-generated RERUNs are not released to the distribution clerks until the last day before the due date. Hence, the rating department is unable to address its backlog because of consistently late RERUNs from the underwriting department. The prioritization of requests are in the order RUN,RAP ,RAIN & then RERUN’s. This clearly shows that downstream problems are mainly due to inconsistent priority systems among departments.
3) Large number of late renewals
Late renewals are causing a dramatic rise in the renewal loss rate, representing a significant loss of business and an overall reduction in the number of policies in force
4) Declining profitability
As is evident from the financial statement in exhibit 5 of the case, Fruitvale branch, for the first time in three years, has reported losses to the tune of $174000 and $121000 in the first and second quarter of 1991.
5) Operations workflow is not optimal
The current inefficient workflow is based on a non-optimal distribution of staff. Improper workload balancing among employees is resulting in them being over-burdened at some point in time and sitting idle at some other
Case Analysis - 2
Manzana Insurance (Fruitvale Branch)
Group 13:
ANALYSIS
INTRODUCTION
The Fruitvale branch of Manzana Insurance is facing stiff competition and is being severely outperformed by Golden Gate casualty Insurance. On every measure of performance, Fruitvale branch seems to be falling apart. Following are the problems faced by Fruitvale branch:
1) Turnaround Time (TAT) is too high
TAT, or the number of days between the receipt of a RUN and the issuance of a final policy, is an important indicator of service quality used by originating agents to help customer choose an insurance company. Fruitvale’s average TAT of 6 days for processing a request far exceeded Golden Gate’s guaranteed TAT of 1 day.
2) Large backlog of policies
The prime reason is that the computer-generated RERUNs are not released to the distribution clerks until the last day before the due date. Hence, the rating department is unable to address its backlog because of consistently late RERUNs from the underwriting department. The prioritization of requests are in the order RUN,RAP ,RAIN & then RERUN’s. This clearly shows that downstream problems are mainly due to inconsistent priority systems among departments.
3) Large number of late renewals
Late renewals are causing a dramatic rise in the renewal loss rate, representing a significant loss of business and an overall reduction in the number of policies in force
4) Declining profitability
As is evident from the financial statement in exhibit 5 of the case, Fruitvale branch, for the first time in three years, has reported losses to the tune of $174000 and $121000 in the first and second quarter of 1991.
5) Operations workflow is not optimal
The current inefficient workflow is based on a non-optimal distribution of staff. Improper workload balancing among employees is resulting in them being over-burdened at some point in time and sitting idle at some other