• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Manzana Insurance - Operations Management

Extracts from this document...

Introduction

MANZANA INSURANCE OPERATIONS MANAGEMENT CASE 1 SUBMITTED TO PROF. T. S. NAGABHUSHANA BY TEAM 1 AMIT KUMAR GUPTA (0211079) HARPREET BINDRA (0211087) HIMANSHU MITRA (0211096) PRADYUMAN KAPOOR (0211113) ROHIT JOG (0211124) EXECUTIVE SUMMARY Fruitvale branch of Manzana, which handles only property underwriting, has been performing very badly for quite some time with very high turnaround time resulting in late renewals and increased renewal loss rate. This is further worsened by increased competition from Golden Gate, a new player in insurance industry. There are a couple of problems in the fruitvale including ineffective incentive system, incorrect prioritizing of requests, increase in shift to newer policies, bottlenecks in operation, pending work not considered on a territory basis and increased turn around time etc. These problems have resulted in loss of almost half of renewal business for Manzana-Fruitvale. Some of the recommendations by which the Fruitvale can be pulled up are pooling together of underwriting teams and catering to any requests received from any of the agents of the branch. Also RERUNS should not be discriminated against because they are actually more profitable both in terms of value and the time they take to be processed. Fruitvale has to streamline its processes and will have to compete on the basis of services in this highly competitive scenario where insurance rates and commission schedules are nearly identical among competitors. ...read more.

Middle

Accordingly, it will have a higher backlog also. 5. Increased losses may be due to shift in mix to newer policies * Adverse Selection: New policies may be initiated by clients "anticipating a loss" * To get PLUS bonus, the Underwriters may be too lenient in their assessment of risk * Due to poor service, Manzana may be getting only the new policies that other insurers don't want! 6. Bottleneck in operation flow: Underwriting of Territory 1 requests: Underwriting is done by each team on territory basis. Territory 1 has the highest capacity utilisation amongst all territories. This estimate is based on steady state of operations but in reality, due to fluctuations in requests, it will not be sufficient. The average variation in the requests per day is 16.7 (from the data in case exhibit 6), which the system will definitely not be able to handle. We also note that the renewal loss rate associated with territory 1 is the highest. Hence Territory 1 is a major source of bottleneck. SOLUTION ANALYSIS AND RECOMMENDATIONS The analysis of the case and the corresponding recommendations have been provided based on the following points which can be implemented without any compromise on the quality of the work: > The underwriting teams need to be pooled together and they will perform the requests received from any of the agents of the branch. ...read more.

Conclusion

(Refer Exhibit II) It can be observed that the two employees for the distribution activities need to be recruited and two employees from the rating activity should be transferred to comprise an underwriting team. As a result, the turnaround time for each activity will average around .625 days. This will not only lead to the efficient utilization of all the available resources but also result in reduction in the total turnaround to 2.49 days (Refer Exhibit II) > Our agents receive a commission of only 7% on RERUNS. This is substantially lower than the amount they receive for RUNS, and hence acts as an incentive for agents to divert this business to our competitor. An increase in the commission rate should be effective in tackling this problem. > We should not discriminate against RERUNS as a secondary priority, because they are actually more profitable both in terms of value and the time they take to be processed. We need to implement the policy of first in first out regardless of the policy that is being processed. > We have lost out on a large number of renewals to the fact that the policy reaches the holder for renewal only after the due date is over. It is recommended that the process of RERUN initiation should start at least one week before the due date. This would result in the policies reaching in time, and hence a significantly higher rate of renewal. Operations Management - Case 1 1 ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level ICT in Business section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level ICT in Business essays

  1. Apple Incorporation - Case Analysis

    This cost must be absorbed into the products being manufactured. Money spent on cleaning up or providing cleaner operations does not add to the value of the product production so it is a negative affecting cost that must be incurred.

  2. Business Operations

    with problems of names on boarding passes, flight numbers on the tickets and times of the flight. If this happens then the customers will be rightfully annoyed at having to wait if the flight is delayed. Sensual Service (Explicit) - This refers to the perceivable benefits which comprise of the

  1. An I.T. System for Estate Agents

    This in the long run would save a lot of time for the worker and the task would be able to be done much easier and faster. An example of a task that would be very time consuming for a worker when using the paper-based system would be when matching suitable houses to customers.

  2. 3. Consider the management of resources

    having to close for a considerable amount of time due to essential refurbishment or it being dangerous to the customers and staff. This contingency plan would outline things such as - will a temporary store be opened for the customers still wanting to shop at Boots?

  1. Consulted Magna with Recommendations

    The company is organized in a number of independent divisions that are system/product oriented, for example Vision System, Powertrain System, Electronic System, etc. Each of these divisions is involved in a final system assembly stage and supplying systems to the car and light truck manufacturers.

  2. International Management

    (Hodgetts/Luthans, 2003) 2 What type of organizational arrangement does the firm use currently? If it expanded operations into North America, what type of structure would you recommend it use? What other organizational changes would you recommend? Currently the firm is using subsidiaries; this is defined as a large company owning an amount of small companies.

  1. Marketing & operations management.

    Committee Structure The activities of the Board are managed through the following committees: Education Library Services Finance Youth The Board also has a Teaching Appointments Committee and Audit Committee. 2.0 Introduction As a marketing assistant my managing director has asked me to carry out a research project to enable

  2. Knowledge management.

    Intellectual capital has a tremendous value in business organization. To manage it, companies now must start with knowledge management centers within their firms. The job of knowledge manager will be to facilitate knowledge sharing, identifying the knowledge sources within the firm such as knowledgeable people and making them responsible to

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work