Manzana Insurance - Fruitvale Branch (Abridged)

Essay by gauravgadsUniversity, Master'sA+, November 2006

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Question 1. How is Fruitvale branch doing?


1. Branch profitability is declining. It suffered a loss of $174 and $121 in 1st and 2nd quarter of year 1991.

2. Another big concern for Fruitvale is there weighted TAT days which is increasing every quarter. Since 2nd quarter of 1990 to 2nd quarter of 1991 it has increased from 5.1 days to 6.2 days. Number of requests processed in 2nd quarter of year 1990 was 2,401 where as it has reduced to 2391 in 2nd quarter of 1991. Percentage of late processed requests has gone up from 10.3% to 19.69%.

3. Renewals lost rate have gone up from 33% in 2nd quarter 1990 to 47% in 2nd quarter of 1991.

4. Branch has growth rate is almost stagnant in terms of request processed per quarter in spite of the fact that industry is experiencing moderate growth rate.

Question 2. What are the causes of the problem?

1. In Fruitvale request are given priority as per the incentives associated with them. Under Writing team is processing in the order RUN, RAP, RAIN and RERUN. Since RUN and RAP are processed first at the expense of RERUN there is delay in processing of RERUN and hence many renewals request are either getting lost or getting delayed. FIFO basis is followed within these two priority classes.

2. Policy writers further sort out the work and tries to handle simpler jobs before more complex jobs. Due to this strategy, some of the requests can get much delayed.

3. Even though only 15% of our RAPS are getting accepting we are still investing lot of time and efforts in processing of this RAP requests. Also since RAP requests approval from originating agent can come any time with in 10 days its adding lot of uncertainty...