XYZ Insurance Corporation. XYZ Insurance Corporation is a leading global insurance organization serving business and individuals with
Question:
XYZ Insurance Corporation. XYZ Insurance Corporation is a leading global insurance organization serving business and individuals with a broad range of insurance products and insurance-related services. The Chief Operations Officer, Alicia Johnson, has called you into her office. You are the Director of Special Projects. You have a team that works for C-level management performing internal consulting projects. Ms. Johnson provides an overview of the underwriting department. The underwriting department is regionally dispersed across the country with centralized management in the home office in New York. The department consists of underwriters, analysts, technicians and clericals working on property insurance submissions sent in from brokers. When an insurance broker has a client who requires insurance for their property, she works with the client to develop a submission to several insurance companies to obtain competitive quotes, including a quote provided by the underwriting team of XYZ. T he submission will include the locations, the construction, occupancy type, fire protection and environment of the location. Although the company receives occasional submissions via regular mail, the vast majority is now received via email from brokers. Ms. Johnson then goes on to explain the problem she has observed. XYZ receives 3,000 submissions annually. Only 1,000 submissions proceed to quotes (the output of the process). The underwriters spend 50% to 65% of their time on the submissions that are later declined. This means they only spend 35% on approved submissions they want to underwrite. She goes on to state that this has been increasing over the past 24 months to get to these levels of inefficiency. Any underwriting time that can be eliminated will allow the underwriter more time to develop better quotes for those submissions accepted and hopefully increase the chance of winning the bid. The current process also has a number of handoffs. Ms. Johnson has asked your process improvement team to help the underwriting department improve its process. She has requested that your validation of her observations as she is not sure they are totally accurate, and wants additional work done to understand the problem. She also asks you what other companies are doing in this instance. She wants suggested improvements back from the team in two weeks. Where might you go to gather additional information on the insurance quotation process from an external perspective to help understand the 'Should Be' environment? As you have not dealt with the underwriting department yet, what might you want to consider as you are doing your work?
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw