Specify and run a simulation of the disability insurance claims handling process, taking into account the following additional information and instructions:

• You should simulate only the part of the process from the moment a new claim is received to the moment a decision is made on the claim (i.e. until the claim is rejected or the benefit entitlement is recorded). Tasks associated to benefit renewals should not be included.

• The insurance company employs two junior claim handlers and two senior claim handlers dedicated to disability insurance. Each of them spends on average 6 hours per day on claims handling. The remaining working time is spent on other tasks not relevant to this process (e.g. professional development). You may assume that a claims handler works on handling new claims from 9:00am to a certain time of the day (that you need to calculate).

• You may assume that the insurance claims arrive according to an exponential distribution during business days only. There are about 250 business days in a year

• The time spent waiting for customer authorizations follows an exponential distribution. Same for the waiting time for hospital reports.

• In case you need to assume that the execution time of a task follows a normal distribution, please set the standard deviation to 10% of the mean execution time.

• Your simulation should cover a period of at least six weeks.

• The hourly cost of a senior claims handler is EUR 30, while the cost of a junior is EUR 20. There are not additional costs associated to a task other than the cost associated to the resource performing the task

In case you need to make additional assumptions, please write them down in a short report and submit it together with the simulation model.

Important: If you will use simulation, please uninstall Bizagi Modeler 3.7 from your computer, and install version 3.1 available at Syllabus section of Blackboard. (This is because, to be able to use simulation in version 3.7, you need to upgrade from Personal plan which is free, to Professional plan which has a monthly license fee of 8 USD.)

• The time spent waiting for a customer authorization letter or for a health provider report can be modeled as a "receive" task assigned to a special resource called "System". There should be a sufficiently large number of instances of the "System" resource to ensure there is always one "System" resource available. We can assume that this "System" resource does not have any associated cost.

• Note that a junior claims handler spends a certain amount of time per day dealing with customer inquiries as explained in the description of the process. Rather than including such "enquiry handling" tasks in the process model, you may exclude enquiries from the simulation and instead subtract the time that a junior claims handler spends handling enquiries, from their daily working timetable. Similarly, senior claims handlers spend some time handling benefit renewal requests, which should not be included in the simulation. You might wish to subtract time spent on renewals from the senior claims handlers' timetable.

• You might need to define a separate timetable for junior and for senior claims handlers, since for junior and senior claims handler spend different amount of hours per week dealing with new claims.

Bonus Task 2 (Process Automation): Prepare an executable process model in Bizagi Studio for the “to-be” model you prepared in Task 6. You may make reasonable assumptions, provided that you include them in the document that contains your answers.

Answer rating: 100% (QA)

The insurance claim process typically involves five main stages from the moment you report your loss to the resolution of your claim You can prepare for the process by gathering relevant documents thi... View the full answer