Client Successes - Increase Revenue

Industry: Insurance

Function: Order Operations

Problems: Customers left for competitors because of delayed orders and slow cycle time

Outcome: Revenue increased millions of dollars per month; the reduction in delays and cycle time increased the number of policies issued and reduced the cost of issuing policies

Situation: One of the largest insurance companies in the United States wanted to reduce policy application -- “order” -- delays and minimize inconsistencies in the way underwriters approved and risk managers evaluated potential new customers. At the time, delayed orders and slow cycle times were having an adverse impact on customer satisfaction and revenue. If an “order” was delayed for more than two days, the applicant would often purchase a policy from another insurance company. Since the order process supported all lines of business, the cost of lost opportunities was significant.

Although the order process was normally efficient, there were times when spikes in delays required that credit risk managers and underwriters take corrective and preventative actions. A hand full of credit risk managers and underwriters consistently implemented superior corrective and preventative actions that consistently resulted in significantly fewer delinquencies.

Challenges: There were four challenges. First, improve the expertise and performance of risk managers and underwriters across all lines of business. This would reduce delays, increase cycle time and improve revenue. Second, establish the One-Term One Meaning principle in at least one department that supported the entire process. Third, implement continuous improvement of expertise and cycle time. Fourth, use acquired expertise to create dynamic computer applications that could instantly adapt to constantly changing expertise.

Meeting the Challenge: MIP provided the training, Intellectual Capital Repository and guidance the Insurance Company needed to:____

Acquire and continuously improve the expertise that people used to identify the cause of the delays, resolve delays, determine corrective action andimplement preventative action. Resolve delays across all lines of business and minimize the time needed to get the order process back on track. Establish a structure for global sharing that would minimize the time required for risk managers and underwriters to learn from their colleagues, analyze situations and make decisions. Utilize the acquired expertise as business requirements for developing Decision Support Tools that minimized the analysis required to determine the cause of delinquencies, supplied the information needed to resolve delinquencies and notified the correct people.

Results: Process delays of more than two days were eliminated. Risk management and underwriting were able to approve applicants/customers in less time. This increased the number of policies the company issued, which substantially increased customer satisfaction and revenue while reducing underwriting and risk management expenses.

The expertise used to analyze delays…to identify the cause of delays…to solve problems …and to determine the correct people to notify was available to everyone. This enabled managers to proactively prevent their processes from going out-of-control. Delays were resolved in less time and mangers were able to reallocate their time to more profitable activities.

The expertise also provided the business requirements and analytical criteria that enabled the company to implement successful Decision Support Tools.

Please note: Delays in processing orders and/or customer applications is a common problem. For example, when the ICR was implemented at a Savings and Loan, finance significantly improved the cycle time for processing loan applications. Within one month, the reduction in cycle time increased revenue by more than $1 million per month. This was a significant ROI that exceeded project expectations many times over.

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