Operations Management in Insurance Sector

Ope symmetryns Management in INSURANCE SECTOR Q. How to measure operational efficiency in utility industry? Ans-Insurance companies manipulation KPI indicators to measure operational efficiency and ensure optimal standards. The secret to success for an indemnity company is providing the right product, having the right population selling and managing happens associated with it. Insurance organizations use and piece on metrics to block unnecessary risks. Following atomic number 18 the Key Performance Indicators (KPI) that insurance companies use to measure operational efficiency.Policy Sales Growth Ratio It measures insurance policy sales growth over a set point of judgment of conviction. It is increase in the number of clients over a specified tip. It is helpful to gain insights into policy sales trend. The high this percentage, the better it is. Policy Sales Growth = (Current period sales revenue previous period sales revenue)/previous period sales revenue Claims Ra tio It is defined by claims in a period divided by earned bountifulness in the period. It helps to receipt the risk of claims and effectiveness of the policy.The ratio needs to be analyzed cautiously to understand the risk associated. A higher ratio channelizes too umpteen claims compared to premiums and it isnt good for the company. A lower ratio may indicate difficulty claiming which would lead to customer dissatisfaction. Claims Ratio = summate claims per period/ bestow earned premiums per period Percentage of Total Lapses It measures the total number of helpless payments in a period compared with the policies sold. It helps in understanding why lapses are occurring and s pull in them from occurring at a high frequency.Read also mental testing Operations ManagementA high percentage might be because of inefficient trading operations such as problems in the payment process. A company incessantly improves its operations to decrease the percentage of lapses in each period. P ercentage of Total Lapses = Lapses/Policies Sold Average Time to watch a Claim It measures the time it takes deign claims. A decreasing trend is fortunate. Lower time to compensate the claim defines higher operational efficiency of the company. Average Time to Settle a Claim = Total no(prenominal) of days taken to settle all claims/ Total claims Quotas vs.Production It measures the effectiveness of sellers and agents at meeting their bespeaks. It helps in identifying when target sales are below and taking corrective action. A ratio below 1 means targets is not being met. A higher than 1 ratio means brokers are exceeding the target and it is favorable for the organization. Quotas vs. Production = Total Rs. Quoted Business/Total Revenue Top Brokers in Sales Revenue It ranks brokers based on sales revenue and no. of policies sold. It helps to identify top performers for each category of policies.It also helps to improve the death penalty of brokers who are lacking behind. Top Bro kers in Sales Revenue = stray top 3 or 10 brokers based on sales revenue Total Benefits as a percentage of premium It is an indicator of financial performance. This measure helps in pricing of insurance policies. It helps to know the risk factors associated with each policy and set fair premiums. Total paid benefits as a percentage of premium = Total paid benefits/Total premium earned Q. How to ensure quality in service business and how to recruit quality in service sector?Ans-There are several ways to ensure and enhance the quality of an insurance company. These are listed below. Six Sigma concepts tush be implemented to ensure quality and conform to consumer needs. Six Sigma concepts work out use of statistical tools which makes measurement of results easier. Dividing the company into parts based on contrasting categories of insurance such as separate departments for car insurance and health insurance. This would let better understanding of which categories of insurance s hould be improved by the company. Deciding on the maximum time to settle an insurance claim. This would drop out to improve service and quality of claim processes as claims would be colonised more quickly. Online information should be used to provide policy holders with accounts that provide updated information regarding their claims and premium payments. Insurance companies can get into an strategic coalition with mobile banking providers so that customers can pay their premiums through mobile banking A chart showing the updated rankings of brokers should be available to all brokers.This would increase rivalry and let the brokers know how much they are lacking behind others. Incentives for top performing brokers should also be announced in advance to cover the motivation level high throughout and improve services. Regular upbringing programs should be conducted for brokers in order to increase their marketing and selling skills A complaint center should be established in the premises to volume with the complaints received from customers. The complaints should be discussed and a corrective action plan should be develop to deal with problem.The action plan should be implemented and results moldiness be analyzed A maximum time to act on a complaint should be decided within that time the department has to act on the complaint. The corrective action taken should be document and implemented within the specified time External benchmarking with other insurance companies might also be helpful in identifying short comings and modify services Define to brokers the criteria of quality customer interaction and to led them act on it