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 competitors 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

Arrival Rate
Weighted
Average time per
Request (min.)
Total Time
required
Available Persons
Capacity
Available(7.5
hrs/day)
Capacity
Utilization

Review and
Distribution
39

Underwriting

Rating

Policy Writing

39

39

26.25

41

28.4

70.4

54.8

26.65

18.46

45.76

23.975

30

22.5

60

37.5

88.83

82.04

76.27

63.93

Capacity Utilization of Underwriting Team

Underwriting
Weighted Average

Territory 1
28.4

Territory 2
28.4

Territory 3
28.4

15.84

15.84

15.84

14.625

13.15

11.225

92.3%

83%

70.8%

time per Request

(min.)
Total
Capacity(60*7.5/28
.4)
Total

request

Per

Day
Capacity Utilization

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.

DC

Capacity Utilization
Using Mean Time
UT
RT
PW

RUNs

68.5

43.6

75.5

71

258.6

No.
of
polici
es in
1990
678

RAPs

50

38

64.7

152.7

3079

RAINs

43.5

22.6

65.5

54

185.6

895

RERUNs
28
18.7
Total number of man hours

75.5

50.1

172.3

4987

Max Total number of man hours

Capacity utilization

36000
77.35

Total
mins

Using 95% SCT

RT
PW

Total
mins

DC

UT

RUNs

128.1

107.2

112.3

89.3

436.9

No.
of
polici
es in
1990
678

RAPs

107.8

87.5

88.7

284

3079

RAINs

68.1

49.4

89.4

72.1

279

895

RERUNs

43.2

62.8

92.2

67

265.2

4987

Total number of man hours

Capacity utilization

126.99

No. of
man
hours

2922.1
8
7836.0
55
2768.5
33
14321
27847.
77

No. of
man
hours

4936.9
7
14573.
93
4161.7
5
22042.
54
45715.
19

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.