Manzana Insurance (Case Analysis Report)
The Case Brief:
Manzana Insurance is the second largest Insurance Company in the Property Insurance space in California. The case relates to one particular branch, the Fruitvale branch, which has been losing market share to its competitor Golden Gate. This branch deals with the commercial property insurance and has three underwriter teams that cater to 3 geographic territories. On an average, the Fruitvale branch receives around 39 requests per day (22 requests for new insurance and 17 renewals). The underwriting teams are supported by distribution clerks, the rating team, and the policy writers. 'Requests for New Policies-RUNs' are considered to be the most profitable business, followed by 'Requests for Price-RAPs'. 'Requests for Additional Insurance-RAINs' are considered third and 'Requests for Renewal-RERUNs' are placed last. The employees process requests on a FIFO basis within these prioritized categories of requests.
The Problem:
- High turnaround time (TAT) - Loss of renewals business to competitors
- Worsening finances over the years; the branch reported a loss of US$ 174,000 and US$ 121,000 during the first two quarters of 1991
- Backlog of Policies
- Improper load balancing among employees - resulting in tight schedules and idle time
- Pressure due to competitor Golden Gate's assurance of a single day turn around time (TAT)
The Objective:
To identify bottlenecks in Manzana's operations using process flow analysis.
The Analysis:
Manzana is a service company and hence, it has a constraint of not being able to store its products for supply unlike a manufacturing company. In this case the turnaround time or TAT defines the service quality. Manzana has a problem of not being able to renew its insurance policies on time as a result of which, many clients choose to go elsewhere. Further, in a service industry the peak demand creates backlogs and these, when allowed to be carried forward, can affect the future services of the company. In this case
Manzana Insurance is the second largest Insurance Company in the Property Insurance space in California. The case relates to one particular branch, the Fruitvale branch, which has been losing market share to its competitor Golden Gate. This branch deals with the commercial property insurance and has three underwriter teams that cater to 3 geographic territories. On an average, the Fruitvale branch receives around 39 requests per day (22 requests for new insurance and 17 renewals). The underwriting teams are supported by distribution clerks, the rating team, and the policy writers. 'Requests for New Policies-RUNs' are considered to be the most profitable business, followed by 'Requests for Price-RAPs'. 'Requests for Additional Insurance-RAINs' are considered third and 'Requests for Renewal-RERUNs' are placed last. The employees process requests on a FIFO basis within these prioritized categories of requests.
The Problem:
- High turnaround time (TAT) - Loss of renewals business to competitors
- Worsening finances over the years; the branch reported a loss of US$ 174,000 and US$ 121,000 during the first two quarters of 1991
- Backlog of Policies
- Improper load balancing among employees - resulting in tight schedules and idle time
- Pressure due to competitor Golden Gate's assurance of a single day turn around time (TAT)
The Objective:
To identify bottlenecks in Manzana's operations using process flow analysis.
The Analysis:
Manzana is a service company and hence, it has a constraint of not being able to store its products for supply unlike a manufacturing company. In this case the turnaround time or TAT defines the service quality. Manzana has a problem of not being able to renew its insurance policies on time as a result of which, many clients choose to go elsewhere. Further, in a service industry the peak demand creates backlogs and these, when allowed to be carried forward, can affect the future services of the company. In this case