...Manzana Insurance: Fruitvale Branch (Abridged) Group No. 7 Agenda Introduction Company Background Organizational structure Operational Flow Financial Health Current Utilization Capacity RUNs v/s RERUNs Profitability Factors of the Industry Recommendations Introduction Manzana’s Fruitvale branch is suffering from declining profitability. Falling renewal rate and rising turnaround time are the main issues. Other issues are incorrect prioritization of requests and the uneven distribution of workload in 3 underwriting teams. Turnaround time (TAT) much greater than competitor’s. Company Background Founded in Sebastopol, California, in 1902. Originally specialized in orchard and farm insurance. Post 1906,expanded by buying several insurers in northern California. Anticipating boom in home ownership in southern California, bought Casualty and Escrow Company. By 1953, became California’s 2nd largest home and property insurer. In 1970s,growth starts to falter due to high interest rates and intense competition from Golden Gate. In 1989, acquired by Banque du Soleil and new management installed. Organizational Structure Operations Flow Underwriting Team 1 1 Underwriter 1 Technical Assistant Originating Agent Distribution 4 Clerks Underwriting Team 2 1 Underwriter 1 Technical Assistant Rating 8 Raters Policy Wrinting 5 Writers Underwriting Team 3 1 Underwriter 1 Technical Assistant Parameters /...
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...The Manzana Case Manzana Insurance- Fruitvale Branch case study Executive Summary The Fruitvale Branch of Manzana is facing its bitter reality of declining profitability and potential loss of market shares to its main competitor-Golden Gates due to its rising renewal loss rate and expanding turnaround time. In our analysis, we dig into several issues that were possible causes for the problem and tend to provide readers with feasible solutions that may resolve the issues on hand. Examples of such issues as we have identified in the case include, but not limited to, various departments’ deviation from FIFO system, potential capacity and staffing problems, uneven workload among three underwriting teams, outdated SCT for computing TAT, and inaccurate computation process for TAT. In order to lower the number of late renewals and reduce turnaround time, our recommendations include, but not limited to, the following: 1) Making it mandatory for all departments to comply with the FIFO system and implementing monitoring plans for overseeing the entire underwriting process to ensure FIFO is strictly implemented; 2) Revising the incentive scheme for Fruitvale Branch employees to further assist with the successful implementation of FIFO system; 3) Expanding the number of days RERUNs are released to DCs prior to the due dates to ensure that there is sufficient time for relevant departments to complete the requests on or before due dates; 4)Revising and updating the SCT used for...
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...301184488 Bo Pang 301184541 Ivan Zhang 301156657 Tao Zhang 301184502 * Case Analysis * Case Analysis Manzana Insurance – Fruitvale Branch Manzana Insurance – Fruitvale Branch Introduction Manzana insurance, founded in California in the beginning of 20th century, originally specialized in orchard and farm insurance. During the first half of the 20th century, they expanded their business throughout California by buying other insurance company. After the World War II, Manzana had become the second-largest home and commercial property insurer in California. However, the profit of Manzana has been decreasing over the past year. There are four major causes for the profit decreasing, the first one is due to the high turnaround time. Manzana has the turnaround time for six days, which the competitor, Golden Gate only take two days to process their tasks and this is the essence competition between these two companies. Secondly, a number of late renewals cause a rise in the renewal loss rate which result in losing lots of customers for the company. Thirdly, the agents recommend other carriers to customers when contract renewals were late. The last one is that the competition in the insurance business had increased sharply these days. Thus Manzana insurance lose the market share. According to Manzana’s operations flow system, the processing time and the number of requests are sources of variability...
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...| Syndicate Assignment | Manzana Insurance Fruitvale Branch | Operations | | | 01 June, 2016 | | | Manzana’s Position in the Insurance Industry Manzana has a history of seeing opportunity and seizing it. Manzana has grown through acquisition. Manzana's main competition is Golden Gate Casualty. They beat Manzana on both price and performance. Golden Gate tied with Manzana for first place in the property insurance market in 1988. By 1991, Golden Gate announced they could guarantee turnaround time (TAT) of one day. If they fail to reach that benchmark, they offer a 10% premium discount. Manzana must at least match that promise to stay competitive in this market. The current TAT for request processing has bloated to five or more days at a time. This report will recommend a number of strategies to improve the system in operational efficiencies, measurement and service. Manzana has an opportunity to increase their business through decreasing their TAT, adjusting staff incentives and delighting their customers. The acquisition of Manzana by Banque du Soleil has helped. There was a restructure that resulted in a leaner company. Underwriting standards have tightened, operating expense has reduced and this has resulted in a regain of market share. After the restructure, they are now better geared toward the property liability insurance market. Manzana now specialise in commercial insurance rather than personal insurance. That has pitted them against Golden Gate...
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...The Manzana Case Manzana Insurance- Fruitvale Branch Case Study The Manzana Case Manzana Insurance- Fruitvale Branch case study Executive Summary The Fruitvale Branch of Manzana is facing its bitter reality of declining profitability and potential loss of market shares to its main competitor-Golden Gates due to its rising renewal loss rate and expanding turnaround time. In our analysis, we dig into several issues that were possible causes for the problem and tend to provide readers with feasible solutions that may resolve the issues on hand. Examples of such issues as we have identified in the case include, but not limited to, various departments’ deviation from FIFO system, potential capacity and staffing problems, uneven workload among three underwriting teams, outdated SCT for computing TAT, and inaccurate computation process for TAT. In order to lower the number of late renewals and reduce turnaround time, our recommendations include, but not limited to, the following: 1) Making it mandatory for all departments to comply with the FIFO system and implementing monitoring plans for overseeing the entire underwriting process to ensure FIFO is strictly implemented; 2) Revising the incentive scheme for Fruitvale Branch employees to further assist with the successful implementation of FIFO system; 3) Expanding the number of days RERUNs are released to DCs prior to the due dates to ensure that there is sufficient time for relevant departments to complete the requests...
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...| Manzana Insurance: Fruitvale Branch (Abridged) | Case Analysis | | | Group no 4(Section E) | Priyanshu Kumar 1311314Shranya S Mukund KumarPreethi VenkatramanPradeep R | | | Introduction Manzana Insurance was founded in 1902 in Sebastopol, California where it mainly operated in the business of orchard and farm insurance. It now deals in property, flood and commercial property insurances. Manzana operated through a network of three branch offices in 3 states of the United States of America – California, Oregon, and Washington. Each branch was treated as a separate profit and loss center. Its dealings with public happened through a sales force consisting of 2000 independent agents who represented Manzana as well as their competitors. With the entry of a new competitor named Golden Gate Casualty Manzana’s growth began to decline owing to high interest rates and intense. This case is concerned with the performance of the company’s Fruitvale branch, which has been consistently losing business to its archrival Golden Gate in its territory. The Fruitvale branch performed badly on various measures like total number of requests for new policies, endorsements, and renewals processed, very high turnaround time resulting in late renewals and increased renewal loss rate. Problem Overview The Fruitvale branch of Manzana Insurance handled property underwriting i.e., issuing new insurance policies, quotes, endorsements or renewals. The branch profitability was...
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...tle read: ... INDIAN INSTITUTE OF MANAGEMENT BANGALORE Manzana Insurance:Fruitvale Branch Submitted to Prof. Devanath Tirupati Indian Institute of Management Bangalore By: Group Number 6 Vikash Oraon 0911283 Abhijit Pagare 1011076 Bharathi Priya 1011087 Bhargavi Konathala 1011089 Bhavika Kansara 1011090 Vishal Kumar 1011143 Manzana Insurance Introduction Manzana Insurance was started in 1902, and by 1953 had become the second-largest home and commercial property insurer in California. However, since the 1970's Manzana has been facing troubles from intense competition from the Golden Gate Casualty, as well as problems from an inefficient operating procedure leading to late issuance of policies, customer dissatisfaction, and defection of agents to other firms. Situational Analysis Recent complaints from agents about the turnaround time, percentage late figure and the poorly performing renewal business iterate the below average performance of the Fruitvale branch of Manzana. The following points were presented in the case. ? Around 76 independent agents represent Manzana at Fruitvale and dealt directly with the public. There was a difference in the commissions each agent received according to the policy request. ? Exhibit 1 gives an overview of the Operations flow across the four tasks that are performed for every policy request. O A RUN goes through all the four stages [Distribution, Underwriting, Rating and Writing] while a RAP and RERUN bypass the select and classify sub-stages...
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...Harvard Business School 9-692-015 Rev. January 30, 1997 Manzana Insurance - Fruitvale Branch (Abridged) It was a Monday morning in early September 1991. Bill Pippin had been at Manzana for only a week, but already he was thinking that perhaps he should have taken a different job. He gazed at a note on his desk from John Lombard, his boss at the Fruitvale branch: "I'm giving a speech at a conference on property insurance, so I'll be out of the office until next week. Please give this some thought while I'm gone." The note was attached to a memo from Tom Jacobs, Manzana's senior vice president for underwriting operations: To: John Lombard From: Tom Jacobs Subject: Second Quarter Performance The performance figures on Property Insurance for the second quarter have just been completed, and Fruitvale is at the bottom of the list again. More important, Golden Gate is killing us in your territory, and they have just announced a promise of one-day turnaround time to all agents. If something isn't done immediately to improve your operating performance, a lot of our agents are going to defect to Golden Gate, and some of us are going to need new jobs. Here are some of the numbers: Manzana-Fruitvale This Quarter This Year New policies Endorsements Renewals Turnaround time (average) Renewals late Renewal loss rate 326 206 1,063 6 days 44% 47% This Quarter Last Year 278 235 1,253 5 days 20% 33% Golden Gate This Quarter (estimated) 375 300 1,400 2 days NA 15% Something has got to...
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...------------------------------------------------- Manzana insurance ------------------------------------------------- Manzana insurance Operations Analysis Operations Analysis Executive Summary Manzana Insurance specialises in commercial insurance, with the Fruitvale branch typically processing 40 requests per day and the product mix being 60% new policies and 40% renewal requests. The operating performance of Fruitvale is deteriorating across five of the company’s six key performance measures. Additionally, competitor Golden Gate has promised efficiency in service and offered a guarantee for time request turnarounds. Our analysis of Fruitvale’s operations, priorities and cost structure shows that: * The “first-in, first-out” processing system is implemented differently across the teams, causing RERUNs to be submitted late and leading to lost renewals. * The increase in ordinary insured losses and declining revenues from renewals is causing a decline in Fruitvale’s profitability. * The current procedure to calculate turnaround time results in a high value and is really a worst case scenario. * There is a large degree of variance in the time it takes to handle requests, which can cause both the distribution and underwriting teams have more work than capacity. This affects responsiveness, as the system has little spare capacity to deal with increased demand due to variation, seasonality or new business. Based on our analysis, we make a number of recommendations for Manzana to implement: ...
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...OM Manzana Case Study - Team 2 (Rishi, Geoff, Vimalan, Rose, and Jonathan) Manzana Insurance Fruitvale Branch case study Executive Summary Manzana’s Fruitvale branch is suffering from declining profitability. The main issuesresulting in this phenomenon are its falling renewal rate and rising turnaround time.There are systemic issues with the process for handling requests that have led to thisdeterioration, including the incorrect prioritization of requests and the unevendistribution of workload amongst its three underwriting teams. There are also problems of understaffing in the Distribution and Underwriting teams and possibleidle capacity in the Rating and Policy Writing teams. To compound matters, the branch is using an incorrect methodology for computing turnaround time. Addressingthese underlying issues is key to Manzana’s ability to compete with Golden Gate,whose quicker guaranteed turnaround time will generate loyalty among independentagents and result in further loss of business for Manzana. To prevent this, thefollowing steps are recommended:-(i)the FIFO system on all requests received should be strictly implemented;(ii)the reward system for employees should be reviewed and aligned to supportthe implementation of (i);(iii) RERUNs should be sent to Distribution Clerks at least three days prior to theexpiry of the old policy;(iv) The workload among the three underwriting teams should be better balanced;(v)The SCT for the rating and policy writing teams need to be reviewed...
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...Systems Analysis and Design Project Stage 3 New System Specifications And Prototype Based on Harvard Business School case 9-692-015 Manzana Insurance – Fruitvale Branch Presented to Professor Michael Palley Stevens Institute of Technology MGT 772 SB Analysis and Development of Information Systems By Team 3 TEAM 3 Systems Analysis and Design Project Stage 3 MGT 772SB Analysis and Development of Information Systems Professor Michael Palley Table of Contents SYSTEM OVERVIEW ...............................................................................................................................................4 DESCRIPTION .............................................................................................................................................................4 POLICY REQUEST TYPES ............................................................................................................................................4 BACKGROUND ...........................................................................................................................................................4 CURRENT ORGANIZATIONAL PROBLEMS AND GOALS FOR THE NEW SYSTEM ............................................................4 FILE DESIGN..............................................................................................................................................................7 BACHMAN DIAGRAMS IN THIRD NORMAL FORM (3NF)...................
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...Manzana Insurance The Fruitvale branch is not faring well, they are behind competitor Golden Gate in new policies(375 to 326 in favor of Golden Gate), endorsements(300 to 206 in favor of Golden Gate), renewals (1,400 to 1,063 in favor of Golden Gate), turnaround time (2 days to 6 days in favor of Golden Gate), and renewal loss rate (15% to 47% in favor of Golden Gate) in the most recent quarter. The number of renewals, and endorsements at the Fruitvale branch are lower than they were for the same quarter the previous year, and the turnaround time, number of late renewals, and renewal loss rate have increased. The Fruitvale branch has performed especially poorly during the 1991. The main cause of the problems is that the Fruitvale branch processes RERUNS last because they are seen as less profitable than new policies. When RERUNS aren’t provided by the due date, it displeases customers and causes them not to choose to renew the policy with Manzana. In a market where prices are essentially identical, customers value the service they receive and how fast their requests can be processed. Therefore, since the Fruitvale branch is falling behind in this regard, the renewal loss rate is at a record high. Additionally, if a renewed policy is late, the insurance agent is likely to suggest another agency to customers, thus adding to the low retention rate. To make matters worse, only 15% of RAPs become RUNs, so they aren’t acquiring a large number of new...
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...Chihab EL ALAOUI Student ID: 118989 Title: Case of the Manzana Insurance Fruitvale Branch 1. Describe and evaluate Manzana's operations strategy Manzana has an operations strategy focusing on autonomy among branch offices that shows in the case operational inefficiencies, and it considers each branch as a separate profit and loss center with the space to underwrite insurance, collect premiums and settle claims within territory. Manzana has generally 3 territories of operations, where the company does not deal directly with public, instead of that it operates through 200 independent agents whom are working with other companies, but in case of Manzana the agents are dealing with 4 departments that cooperate with them from within to process the policies whom in order based on the policy process: Distribution, Underwriting, Rating and Policy Writing. The major areas of concern includes: high Turnaround time (TAT), the turnaround time is the total time taken to process a request. At present Manzana’s TAT is around six days compared to one day TAT of its major competitor Golden Gate Insurance firm. The inappropriate work force distribution at Manzana makes some workers to be idle and others being stretched to work, making the system inefficient. There is significant proportion of policies which are being renewed late, this is primarily because the policies...
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...2) Analyze and assess the operations system of Manzana (system for processing insurance requests as depicted in Exhibit 2) by taking the following questions as a lead: a) How do the various jobs (RUN, RERUN, RAIN, RAP) flow through the system? How much time do they take? The figure below shows the flow through the system of the various jobs (RUN, RERUN, RAIN and RAP) taken exhibit 2 into account. The red numbers in the figure show the daily processed requests on average based on the data of 1991 which can be found in exhibit 7. The daily requests that are coming into the system are calculated by adding all various jobs (RUN’s, RERUN’s, RAIN’s and RAP’s) processed in the first 6 months and dividing this outcome by 120 (E.g. 6 months x 4 weeks x 5 days). This means that the teams can process 39 requests on average per day. (350+1798+451+2081)/(6*4*5) = 4680 / 120 = 39 requests per day on average. All further calculations can be found in the table below. |Task |Calculation in # of requests per day |Outcome in # of requests per day | |Calculate generated RERUN |(2081)/(6*4*5) |17.3 | |RUN/RAP/RAIN |(350+1798+451)/(6*4*5) |21.7 | |Total # requests per day |(350+1798+451+2081)/(6*4*5) |39 ...
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...Technology & Operation Management, GSM 430 Case Analysis Content: Manzana Insurance is a property insurance company that operates through a network of branch offices. It does not deal directly with the public but with independent agents who in return deal with the customers. Agents require Low turnaround time and fast renewal rates. Initial analysis of the second quarter performance figures of Fruitvale branch at Manzana Insurance indicates declining profits, poor operating performance and advancement of competitor Golden Gates. Further analysis was conducted to get to the core of the problem the management is facing and consequently, provide recommendations on how to go about these issues. Issues: * Low and declining Profits: During the first quarter of 1991, there was profit loss of ($ 174,000) which declined even further in the second quarter to ($121,000) (Exhibit 1). Reasons may include: * Due to high turnaround times (TAT) * Calculate by management to be 8.2 days * Causes agents to refer clients to other companies * Causes congestion and increased accumulation of policies * Due to reduced number of renewals (low renewal rates) because of increased volumes of late renewals * Due to focus on new policies only * Due to late policies * Late RERUNs amount to 99.67% of total late requests processed in 1991 which means it has a big impact on total...
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