7/17/2019 Declining Profitabilty - Manza Insurance

http://slidepdf.com/reader/full/declining-profitabilty-manza-insurance 1/2

Why have profts been deteriorating over the past several quarters?

 The Fruitvale branch o Manzana actually handles property-liability insurance cases

out o which 6! o business is with "roperty cases and #$! deals with liability

case and rest is attributed to %iscellaneous specialty lines& 't had co%e under the

scanner because o declining proftability& (asically it was struggling with the poorlate percentage fgure and a turnaround ti%e o al%ost 6 days whereas its

co%petitor )olden )ate has a turnaround ti%e o # days&

 The %ain concern o the Manzana 'nsurance was the declining %ar*et share and

proft and the reasons or the sa%e could be accounted %a+orly by the ollowing ,

points

a. Manzana was struggling with the /igh Turnaround Ti%e though it had

su0cient sta12 even it was oversta1ed in "olicy Writing and 3ating

depart%ent&b. 'ts bac*log o policies had increased since 4552 and the nu%ber o new

policies and endorse%ents appeared to be stagnating whereas others

reported a %oderate growth&c. The renewal loss rate was increasing uncontrollably because o the high

nu%ber o late renewals and this was beco%ing a really pain to the agents&

 The other actors7procedure which were contributing to the deterioration o the

co%pany are listed below

Faulty company procedure:

 Though the co%pany policy was to use F'F8 syste%2 due to prioritization or 39:s

and 3;"s2 3;':s and 3<39:s were given very low i%portance and the nu%ber olate 3<39:s is increasing consistently over the quarters during the year 455-4554

as shown in the e=hibit 6&

Poor capacity utilization

>ery poor capacity utilization o 3ating and 9nderwriting tea% and the calculation

showing only 6&#! and #&$@! which are contributing to the late processing&

Uneven workload among underwriting team

;%ong underwriting tea% there is uneven distribution o wor*load with Territory 4

9T with capacity utilization o 5#&,$! and Territory , 9T with a capacity utilization

o $&@! and the wor*load here can be distributed properly&

Increasing TAT:

 The nu%ber o lost renewals increasing and correspondingly increasing the T;T ro%

@& in 455 to 6&# in 4554ATurnaround ti%e. as shown in e=hibit 6&

7/17/2019 Declining Profitabilty - Manza Insurance

http://slidepdf.com/reader/full/declining-profitabilty-manza-insurance 2/2

Loss of business: ;pparently this caused agents to reco%%end other insurance

fr%s based on T;T since the products o1ered by the% is not di1erentiated and this

causing custo%ers to easily switch ro% one fr% to another& This causes Fruitvale to

lose the business&

Increasing Insured losses:

'ncreasing 'nsured losses over the years ro% 455-4554 as in e=hibit is another

reason or its branch proft to change ro% B46 in 4st quarter 455 to post a loss

o B4#4 in the #nd quarter 4554&