Manzana Insurance Company Essay Example

cannot be cleared. The RERUN late rate has risen significantly from 15.9% in Q1 1989 to 44.

During the second quarter of 1991, Fruitvale experienced a 0% growth. This gave Fruitvale's competitors an opportunity to acquire their clients due to frequent reruns. Fruitvale also faced losses in the first two quarters of 1991, which were attributed to process-related issues. Branch profit plummeted from $1.776 million in the first and second quarters of 1990 to a loss of $0.

In the first two quarters of 1991, Fruitvale generated 7 million in revenue. However, the management must implement process restructuring to improve productivity and prevent Fruitvale from failing. To analyze the causes for the potential failure of Fruitvale, several factors need to be taken into account. Firstly, Manzana miscalculated the TAT of 8.2 days.

By implementing the 95% Standard Completion Time, the estimated TAT is higher than the average TAT. The backlog is caused by an unequal distribution of insurance requests among different regions, leading to some regions having no work while others struggle to keep up with the influx of requests. This results in wasted capacities. To address this issue, all territories will now be pooled together to even out differences in inflow. Currently, insurance requests are distributed by one of four Distribution Clerks (DC), who then send the request to the underwriting team (UT) responsible for the originating region.

Currently, the transmission of information from UT to one of eight raters (RT) causes additional time wastage. RTs must familiarize themselves with request evaluation, classification, and pricing despite the UT already having that information. Our solution is combining underwriting and rating, utilizing computerization to simplify rating and reduce

specialization requirements. Consequently, old raters will become three new UTs and two new DCs.

Our team has hired an additional policy writer, bringing our total to six servers at each of three levels. Despite the fact that we have 12 staff members in our newly formed UT, it is inefficient to have two individuals evaluate a single request. As a result, the UT will now underwrite two requests.

After underwriting, each team member will rate one of two requests. It is crucial that the DCs allocate similar requests in terms of rating time to a particular UT. By merging steps two and three, we can save at least 25% of the rating time (time spent on writing and reviewing the case). To ensure safety margins, we have decreased the weighted average rating time by 25% and added it to the weighted average underwriting time.

We split the time it takes to weight the first request on the desk while processing the second request between both requests. On average, the UTs will process 12 requests in 109.6 minutes. This equates to every 54 requests.

In the policy writing department, it is possible to process 6 requests in 8 minutes (109. /2 min). This means that the average service rate is the same in steps two and three, and it can improve productivity by reducing queuing time. After accounting for these changes, our calculations show a TAT of 3:53 hours (refer to Appendix). Rather than prioritizing certain products such as RUNs, RERUNs, RAPs, and RAINs based on profitability, we will implement a first-in-first-out (FIFO) approach for all items.

"Salary/Plus" incentives can be used to encourage employees to improve the weighted average

processing time for requests, which benefits both clients and staff. This approach should enable timely contract renewals and reduction of backlog. It may also require hiring more personnel.

Although abandoning Banque du Soleil's request to establish a regionally organized business is a weakness of the new process, it could potentially become an advantage for Fruitvale due to the growing market. Fruitvale will be prepared for an increasing number of requests in the future.