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Manzana Insurance case solution

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Introduction

INDIAN INSTITUTE OF MANAGEMENT BANGALORE Manzana Insurance:Fruitvale Branch Submitted to Prof. Devanath Tirupati Indian Institute of Management Bangalore By: Group Number 6 Vikash Oraon 0911283 Abhijit Pagare 1011076 Bharathi Priya 1011087 Bhargavi Konathala 1011089 Bhavika Kansara 1011090 Vishal Kumar 1011143 Manzana Insurance Introduction Manzana Insurance was started in 1902, and by 1953 had become the second-largest home and commercial property insurer in California. However, since the 1970's Manzana has been facing troubles from intense competition from the Golden Gate Casualty, as well as problems from an inefficient operating procedure leading to late issuance of policies, customer dissatisfaction, and defection of agents to other firms. Situational Analysis Recent complaints from agents about the turnaround time, percentage late figure and the poorly performing renewal business iterate the below average performance of the Fruitvale branch of Manzana. The following points were presented in the case. ? Around 76 independent agents represent Manzana at Fruitvale and dealt directly with the public. There was a difference in the commissions each agent received according to the policy request. ? Exhibit 1 gives an overview of the Operations flow across the four tasks that are performed for every policy request. O A RUN goes through all the four stages [Distribution, Underwriting, Rating and Writing] while a RAP and RERUN bypass the select and classify sub-stages of Underwriting. O After Rating, a RAP was returned back to the distribution clerk. Only 15% of all RAPs result in RUNs and transferred to policy writing. ? On the basis of average processing times, Fruitvale is equipped with enough staff to handle each major task Exhibit 2. ...read more.

Middle

D) Hire more people - This option is valid as long as the existing capacity of employees is not sufficient to meet the daily demand even after reshuffling is done. As per the given data we know that the daily demand is 39 requests and the existing capacity is nearly handling 44 requests per day. If implemented, this option would also increase the cost due to additional employee salaries. Also it would not be supported by the Main Manager who feels that Fruitvale branch has enough people to meet everyday demands. Hence it would not be a viable solution. E) Implement Overtime until backlog is cleared The need for overtime would arise from the fact that there is significant backlog of the Rerun requests. Given the fact that they have been already delayed and no further delay should be added to their processing, these should be processed first along with the daily requests. F) De-Prioritize the RERUNs and set their priority such that the existing backlog of the requests are cleared - Among the daily requests, RERUNs have a higher share than the others and hence tend to contribute much more to the backlog if given lower priority. Hence take care of handling these backlogs first and also make provisions for any backlogs from this operation in future. G) Mandate FIFO for all processes Currently, though it is company policy to process all orders in FIFO order, most teams operate based on prioritizing the RUNs, followed by the RAPs, then RAINs, and finally the RERUNs. This is leading to the RERUNs being kept in the backlog, resulting in late renewals. ...read more.

Conclusion

81.91% Exhibit 7 : Calculation of TAT with mean processing time. RUNs RAPs RAINs RERUNs Days Distribution (4 clerks) Total at DCs 1 3 1 11 To be processed 1 3 1 11 Average per DC 0.25 0.75 0.25 2.75 Mean 68.5 50 43.5 28 Total minutes 17.125 37.5 10.875 77 0.316667 Underwriting (3 teams) Total at DCs 1 3 1 11 Total at UTs 3 7 6 36 To be processed 4 10 7 47 Average per UT 1.33 3.33 2.33 15.67 Mean 43.6 38 22.6 18.7 Total minutes 57.988 126.54 52.658 293.029 1.178256 Rating (8 raters) Total at DCs 1 3 1 11 Total at UTs 3 7 6 36 Total at RTs 1 2 1 7 To be processed 5 12 8 54 Average per RT 0.625 1.5 1 6.75 Mean 75.5 64.7 65.5 75.5 Total minutes 47.1875 97.05 65.5 509.625 1.598583 Policy Writing (5 writers) Total at DCs 1 3 1 11 Total at UTs 3 7 6 36 Total at RTs 1 2 1 7 Total at PWs 0 NA 1 2 To be processed 5 9 56 Average per PW 1 1.8 11.2 Mean 71 NA 54 50.1 Total minutes 71 0 97.2 561.12 1.620711 Cycle Time 258.6 152.7 185.6 172.3 Corrected Values Total Backlog 82 Requests-in-process Total TAT 4.714217 Days Exhibit 8 - Total System Capacity CAPACITY Actual Capacity Current Average Requests Processed / Day Distribution Clerks 43.90 39 Underwriting - All 3 teams pooled 47.54 39 Rating 51.14 39 Policy Writing 41.06 26.3 Exhibit 9 - System Capacity after the Shifting Process CAPACITY Actual Capacity Capacity After the Employee Shifting Distribution Clerks 43.90 43.9 Underwriting - All 3 teams pooled 47.54 47.54 Rating 51.14 44.74 Policy Writing 41.06 49.27 ?? ?? ?? ?? 12 ...read more.

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