Manzana Insurance
PROD 529
Fall 2010
Manzana Insurance: Fruitvale Branch Case
Executive Summary
In 1991, Manzana Insurance’s Fruitvale branch was suffering on many performance measures including obtaining new policies, retaining current policies, long turnaround times, and the accumulation of a backlog of renewal policies. There are a number of problems leading to these poor performance measures including unbalanced work load on the underwriting teams, department utilization, work prioritization, and some simple miscalculations in determining standard completion times (SCT)and total turnaround times (TAT) for policies.
In order to correct some of the problems at the Fruitvale branch, the workload on each of the underwriting teams should be balanced as some of the teams may be handling more policies than the other teams. It appears that some of the tasks accomplished in the Rating Department and the Policy Writing could be eliminated with upgraded computer systems. Additionally, a strict policy for handling all policies should be implemented. If the first in-first out (FIFO) method is to be used, it must be used uniformly by each department. Lastly, the method to calculate SCT and the resulting TAT may be flawed resulting in inflated and unrealistic expectations.
Summary of the major problems at the Fruitvale Branch
Performance has steadily declined over the last 3 years at the Fruitvale branch. Profitability had declined as the backlog of policies increased along with a decline in the growth of new policies. Additionally, the turnaround time had increased. This turnaround time may have been the root cause of the profitability as agents referred customers to competitors due to this turnaround time. In additions, the long turnaround time was also the cause for the increase in the backlog of policies. In effect, there was a snowball effect occurring at Fruitvale. As the turnaround time increased, a backlog of policies grew and service suffered resulting in
Fall 2010
Manzana Insurance: Fruitvale Branch Case
Executive Summary
In 1991, Manzana Insurance’s Fruitvale branch was suffering on many performance measures including obtaining new policies, retaining current policies, long turnaround times, and the accumulation of a backlog of renewal policies. There are a number of problems leading to these poor performance measures including unbalanced work load on the underwriting teams, department utilization, work prioritization, and some simple miscalculations in determining standard completion times (SCT)and total turnaround times (TAT) for policies.
In order to correct some of the problems at the Fruitvale branch, the workload on each of the underwriting teams should be balanced as some of the teams may be handling more policies than the other teams. It appears that some of the tasks accomplished in the Rating Department and the Policy Writing could be eliminated with upgraded computer systems. Additionally, a strict policy for handling all policies should be implemented. If the first in-first out (FIFO) method is to be used, it must be used uniformly by each department. Lastly, the method to calculate SCT and the resulting TAT may be flawed resulting in inflated and unrealistic expectations.
Summary of the major problems at the Fruitvale Branch
Performance has steadily declined over the last 3 years at the Fruitvale branch. Profitability had declined as the backlog of policies increased along with a decline in the growth of new policies. Additionally, the turnaround time had increased. This turnaround time may have been the root cause of the profitability as agents referred customers to competitors due to this turnaround time. In additions, the long turnaround time was also the cause for the increase in the backlog of policies. In effect, there was a snowball effect occurring at Fruitvale. As the turnaround time increased, a backlog of policies grew and service suffered resulting in