Process Flow Analysis

The Process of writing a new policy starts with the distribution clerk who distributes the request for

insurance policy from an agent or computer i.e. RUN, RAP, RAIN and RERUN to the respective

underwriting team. Distribution was also responsible for analyzing and disseminating published data,

researching competitor’s rates and overseeing rating. The underwriting team evaluates, selects,

classifies and prices the request and then it passes on to the rating department where the premiums are

calculated. The policy writing departments does the actual typing, assembly and distribution of

completed policies. In case of RAP, the quote was transferred to the originating agent from the rating

department and once accepted, went straight to the policy writers. Only around 15% of all quotes

translated into policies.

Request handled by Fruitvale= 22(new insurance) + 17(renewals) = 39(Total)

Number of requests in each department per day

Agent=39

Distribution =39

Underwriting Team 1= For year 1991(6 months) no of RUN, RAP, RAIN and RERUN are 162, 761, 196 and

636 respectively. (From Exhibit 7)

No of working days in a month= 20

For 6 months in 1991= 20*6 =120

Total requests per day= No of RUN, RAP, RAIN and RERUN/Time taken

Total Requests per day= (162+761+196+636)/120=14.625 requests per day

Similarly for underwriting Team 2 and 3

Underwriting Team 2= 100+513+125+840/120=13.15 requests per day

Underwriting Team 3= 88+524+130+605/120=11.225 requests per day

Rating Team= 39

Policy Writing Team= Total no of RAP=1798/120=15 requests per day

Out of 39,24 requests are directly send to policy team and out of 15 only 15 % of the RAP is transferred

to Policy team i.e = 24 + 15%of 15= 24 + 2.25 = 26.25

Capacity Utilization of all the departments

Review and Distribution

Underwriting Rating Policy Writing

Arrival Rate 39 39 39 26.25Weighted Average time per Request

(min.)41 28.4 70.4 54.8

Total Time required 26.65 18.46 45.76 23.975Available Persons 4 3 8 5

Capacity Available(7.5 hrs/day)

30 22.5 60 37.5

Capacity Utilization 88.83 82.04 76.27 63.93

Capacity Utilization of Underwriting Team

Underwriting Territory 1 Territory 2 Territory 3

Weighted Average time

per Request (min.)

28.4 28.4 28.4

Total

Capacity(60*7.5/28.4)

15.84 15.84 15.84

Total request Per Day 14.625 13.15 11.225

Capacity Utilization 92.3% 83% 70.8%

In the underwriting section there are three teams with each team assigned to a specific territory. The

capacity utilization of Territory 1 , 2 and 3 are 92.3 %, 83 % and 70.8 % respectively. As per the capacity

utilization it seems that Territory 1 team has more work than the other two territories.

Capacity UtilizationUsing Mean Time

DC UT RT PW Total mins

No. of policies in 1990

No. of man hours

RUNs 68.5 43.6 75.5 71 258.6 678 2922.18RAPs 50 38 64.7 0 152.7 3079 7836.055RAINs 43.5 22.6 65.5 54 185.6 895 2768.533RERUNs 28 18.7 75.5 50.1 172.3 4987 14321Total number of man hours 27847.77

Max Total number of man hours 36000Capacity utilization 77.35

Using 95% SCTDC UT RT PW Total

minsNo. of policies in 1990

No. of man hours

RUNs 128.1 107.2 112.3 89.3 436.9 678 4936.97RAPs 107.8 87.5 88.7 0 284 3079 14573.93RAINs 68.1 49.4 89.4 72.1 279 895 4161.75RERUNs 43.2 62.8 92.2 67 265.2 4987 22042.54Total number of man hours 45715.19

Capacity utilization 126.99

If we use the 95 % SCT for calculating turnaround time for the year 1990 the capacity utilization

comes around 127 % which is not possible. If we use mean processing time the capacity

utilization comes as 77.35 % which is looking more practical than 95 % SCT.