INTRODUCTION
The insurance company (Halk Sigorta T.A.Ţ.) that we carried out the management consultancy project for, deals with the elementary insurance branches (branches other than life and health insurances) and is one of the sixth biggest insurance companies of Turkey in terms of total premium revenues. Like most other elementary insurance companies, about 80 per cent of its revenues are obtained from accident and fire policies.
The company functions countrywide in five regional divisions. The central division which is located in İstanbul, underwrites about 45 per cent of policies. Ninety per cent of policy underwritings of the company are performed by agencies which are about 500 in number, whereas the remaining 10 per cent is performed directly by the personnel of the company.
Two major strategic management questions that we were expected to answer were the stagnation / decline in the growth pattern of the company and the continuous demand by various departments for hiring additional employees, in spite of this trend. 2. Model Structure In the first two months of the 12-month project, the company and the insurance sector are analyzed thoroughly to decide on the basic structure of the simulation model. One key decision arrived at the end of this phase was to model the company in two parts: İstanbul (central region) and Regions (other regional divisions). İstanbul and Regions perform almost equally in terms of total number of policies and premiums. Another decision was to take the simulation time unit as one month. The model was built as a discrete one, so that the simulation step was also fixed at one month.
The company is modeled into 10 major sectors some of which are similar structurally: İstanbul Accident, İstanbul Fire, İstanbul Claims, İstanbul Agencies, Regions Accident, Regions Fire, Regions Claims, Regions Agencies, Marketing and Finance.