The document discusses issues like high turnaround times, declining profitability, and workload imbalances at the Fruitvale branch of Manzana Insurance that are reducing service levels and profitability. It analyzes errors in calculations, priority queues, capacity utilization, and makes recommendations like revising workload calculations and priorities, increasing staffing, and cross-training employees to improve processes and balance workloads.

1. Submitted by Group 8

2.  Brief about Manzana Insurance
 Problem faced
 Operational flow
 Errors in calculation of Manzana
 Calculation of operational activities
 Turn Around time (TAT)
 Capacity utilization of Underwriters
 RUN’s queue of waiting
 RUNs vs. RERUNs priority
 Recommendations

3.  Manzana Insurance
 second largest Insurance company in the property
Insurance in California.
 Main competitor: Golden Gate.
 Acquired by Banque De Soil.
 Case concern is falling Service levels at FruitVale Branch
 Hence profitability

4.  High and increasing Turn-Around Time (TAT)
 Declining profitability
 Policies backlog
 Improper workload balancing
 Tighter schedules
 Idle time

5.  Late processing of RERUNs due to prioritization
 Non optimal utilization of work force
 Very low conversion of RAPs and RUNs
 Unbalanced workload among Underwriting Teams

6. Distribution Underwriting Rating Policy
• 4 Clerks Team n =1,2,3 • 8 Raters Writing
Originating • 1 Underwriter • 5 Writers
Agent • 1 Technical
Assistant

8. Operational Activities
Distribut Underwri Policy
ion ting Rating Writing
Daily Activity 40 40 40 40 Tom
Average time (MEMO) 40 30 70 55 Jacobs’s
Required time 1600 1200 2800 2200
Employees/ Teams 4 3 8 5 calculatio
Capacity available 1800 1350 3600 2250 n
Utilization rate 89% 89% 78% 98%
Daily Activity 39 39 39 29.25 Actual
Average time (Actual,
Ex 4) 41 28 70.4 54.8 Calculatio
Actual Required time 1599 1092 2745.6 1602.9 n
Utilization rate 89% 81% 76% 71%

9.  Instead of 95% Standard Completion Time (SCT), use
Mean Process Time (from 8.2 Days to 4.72 Days)
To ta l Tu rn a ro u n d Ti m e (TAT)
Op e ra tin g S te p s RU N s RAP s RAIN s RERU N sWo rk e rs /Te a m s ta l Th ro u g h -p u t Tim e
To
Nu mber of Requ est s 1 3 1 11
D is trib u tio n Mean Time 68.5 50 43.5 28 4 0.32
Tot al Time Tak en 68.5 150 43.5 308
Nu mber of Requ est s 4 10 7 47
U n d e rw ritin g
Mean Time 43.6 38 22.6 18.7 3 1.18
Tot al Time Tak en 174.4 380 158.2 878.9
Nu mber of Requ est s 5 12 8 54
Ra tin g Mean Time 75.5 64.7 65.5 75.5 8 1.60
Tot al Time Tak en 377.5 776.4 524 4077
Nu mber of Requ est s 5 0 9 56
P o licy Writin g
Mean Time 71 NA 54 50.1 5 1.62
Tot al Time Tak en 355 NA 486 2805.6
TOTAL 4.71

10. RUNs RAPs RAINs RERUNs Total execution
Policies (Ex 7) 162 761 196 636 1755
Mean time (Ex 4) 43.6 38.0 22.6 18.7
Territory 1
Total Time 7063.2 28918 4429.6 11893.2 52304.0
Average time/ request 29.80
Number of request per day (120 days in a half year) 14.63
Time utilized per day 435.87
Capacity utilization 97%
Policies (Ex 7) 100 513 125 840 1578
Mean time (Ex 4) 43.6 38.0 22.6 18.7
Territory 2
Total Time 4360 19494 2825 15708 42387.0
Average time/ request 26.86
Number of request per day (120 days in a half year) 13.15
Time utilized per day 353.23
Capacity utilization 78%
Policies (Ex 7) 88 524 130 605 1347
Mean time (Ex 4) 43.6 38.0 22.6 18.7
Territory 3
Total Time 3836.8 19912 2938 11313.5 38000.3
Average time/ request 28.21
Number of request per day (120 days in a half year) 11.23
Time utilized per day 316.67
Capacity utilization 70%

11.  Hence the RUNs are not spending time on people’s
desk but due to miss match in capacity allocation
 Different set have different workload
 Policy Writing are enjoying free time with 71% utilization
 Underwriters of Territory 1 are having hectic schedule with
97% utilization
 Even among underwriters the utilization is not well planned
and hence delays

12.  Prioritizing RUNs seems to be an bad optionn over
RERUNs
 Runs increased at 2.5% quarterly where late RERUNs increased at
10.2%, raising renewal loss to 13.34%.
 Agent fee for RERUNs is 7% as compared to 25% for RUNs, hence
prioritizing RUNs is not a good option.
1989 1990 1991
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Total RUNs 263 262 270 273 266 276 290 288 298 326
Late RERUNs 205 191 220 201 225 248 310 387 425 468
Renewal - number
loss 193 205 232 219 400 414 436 467 429 497
TAT (days) 4.7 5.7 5.1 5.6 5.9 5.1 5.3 5.7 5.8 6.2
Increase in late
RERUNs -6.83% 15.18% -8.64% 11.94% 10.22% 25.00% 24.84% 9.82% 10.12%
Increase in RUNs -0.38% 3.05% 1.11% -2.56% 3.76% 5.07% -0.69% 3.47% 9.40%
Increase in Renewal
loss -6.22% -13.17% 5.60% -82.65% -3.50% -5.31% -7.11% 8.14% -15.85%

13.  Calculation methodology for workload and TAT needs
revision
 Removal of Priority queuing for RUNs to RERUNs
 Load of Distribution and Underwriting team might need
increase
 Load distribution for Underwriting team is a much needed
fact
 Cross domain/ functional training might reduce workload
 Trade off of agent commisions and way underwriting is
performed
 Revision of commisions for RERUNs might play the trick
 Technological improvements where ever possible especially
in Policy Writing and rating stages