lean for insurance and finance
TRANSCRIPT
LEANING INSURANCE CLAIM CENTER OPERATION
CASE STUDY
By: Imad Al-Murib
Lean Black Belt
THIS CASE STUDY IS BASED ON A COMPLETE LEAN PROJECT DELIVERED TO A MAJOR INSURANCE COMPANY. DETAILS INCLUDING CLIENT’S NAME, LOCATION, ACTUAL STEPS TAKEN WERE OMITTED FROM THIS DOCUMENT FOR CONFIDENTIALITY REASONS. IF YOU ARE INTERESTED IN THE TOOLS AND THE METHODOLOGY THAT HAVE BEEN USED, YOU CAN CONTACT THE AUTHOR VIA EMAIL:
SUMMARY
BOTH “STAR EVALUATION SYSTEM” AND “MICRO VSM” ARE INTELLECTUAL PROPERTIES OF THE AUTHOR OF THIS DOCUMENT. UTILIZATION OF THE TOOLS WITHOUT REFERRING TO THE ORIGINAL AUTHOR IS PROHIBITED.
LEAN IMPROVEMENT CASE STUDY
EXECUTIVE SUMMARY
▸ This is a case study for implementing Lean in Motor Claim office.
▸ This case study provides a high-level improvement summary for the work done by the Lean team on mainly two points:
▸ The use of the Star Evaluation System that combines simplicity with accuracy and provides senior management with a dashboard to view performance in different branches.
▸ The use of Micro Value Stream Mapping (VSM) tool that helps solve problems in the service sector (finance, government, IT, health, HR, etc…) that the standard VSM can’t deal with.
LEAN IMPROVEMENT CASE STUDY
BACKGROUND
▸ (….) Claim center process over 90 motor claims request per day.
▸ There are total of 9 staff dedicated to motor claims.
▸ Despite improvement initiatives led by other entities, the operation is a source of major concern for:
▸ Customer Satisfaction is low.
▸ Branch manager requesting more staff for the second time.
▸ Branch is full with people at any moment of time. Request for expansion has been filed.
LEAN IMPROVEMENT CASE STUDY
CURRENT STATE SUMMARY
Total Lead Time (TLT): 120 minTotal Cycle Time (TCT): 20 minValue Time: 2 minEfficiency: 1.6%Total FTE in current process: 14 (currently there are only 9 people involved in this process which is why there are huge delays)
2%
98%Lead TimeValue Time
CURRENT FTE
CURRENT PROCESS FTE
LEAN FTE
0 3.5 7 10.5 14
Quality:Overall Accuracy = 40%Quality impact (or Lost time due to CAC%) : 8.5 min
Customer Experience: No. Customer Interactions: 4Customer wait time: 72 min.
Efficiency: 0 / 2 Customer Experience: 0 / 2 Quality: 1/ 2
LEAN IMPROVEMENT CASE STUDY
FUTURE STATE SUMMARY
Critical Path of the process for the following values:Total Cycle Time (TCT): 15 min (was 20 min) Total Lead Time (TLT): 35 (was 120)Efficiency: 34% (was 1.6%) Total FTE in current process: 5.6 (was 14)
Quality:Overall Accuracy = 75% (was 40%)Quality impact: 2 min (was 10 min)
No. of Customer Interactions: 3 (was 4)Customer wait time: 5 min when applying online 31 min when not applying online.(was 72 min)
Efficiency: 2 / 2 Customer Experience: 1.5/ 2 Quality: 2/ 2
FTE
LEAD TIME
CUSTOMER WAITING
QUALITY IMPACT
0 30 60 90 120
BEFORE
AFTER
LEAN IMPROVEMENT CASE STUDY
THE USE OF MICRO VSM
▸ VSM (Value Stream Mapping) is the heart of any Lean and Continuous improvement initiative. Its main goal is to summarize the process in a way that a Lean expert could apply the lean tools to it.
▸ Unfortunately, the process in the service sector (finance, health, IT, government, HR, etc…) is so complicated that generating a VSM diagram out of it is almost impossible.
▸ Another difficulty with the service sector is that the operation is more complicated as it involves front end and back end operation where the two have different success criteria that include not only the efficiency of the process but also long-term quality concerns and a crucial customer experience element, aspects that the standard Lean is not designed to address them.
▸ The Micro VSM framework, provides a practical and innovative way to address all the concerns above by converting the complicated process chart into a format that highlight all the areas and success criteria above and allow the use of the Lean techniques to generate an improved future state.
▸ The Micro VSM (in all its forms including the excel sheet and the web modular tool) is the intellectual property of Imad Almurib. If you are interested in using the tool, the author could be contacted at [email protected]
▸ This particular project was demonstrated in a step-by-step guide to use the micro VSM tool. Please refer to Lean Vector blog for more details.
Complicated, almost impossible to
Simple, very easy to Lean
apply Lean techniques to.
LEAN IMPROVEMENT CASE STUDY
CONCLUSION ▸ The Method of Micro-VSM and were
adopted by all the departments in that insurance firm to replace swim lanes.
▸ Star Evaluation System were adopted by the senior management team as a way to evaluate performance of all their branches and offices world wide.
▸ The Lean transformation program in that insurance firm was re-shaped after the introduction of these tools. The program gained focus and within less than 3 months, it managed to achieve improvements in Customer Experience, Efficiency and Cost savings that were seen for the first time.