Watch Out For Waste In Repetition
Those of us who have dealt with the day-to-day operations of an insurance company know how repetitive some of the process tasks can be. While in many cases, this is necessary for quality assurance, there is good reason why the repetition has earned notoriety. As Trindent often sees on engagements in the insurance industry, sometimes repetition hides inefficiencies that can have a negative impact on profitability.
Simple, Yet Perilous
One of the best examples of this can be found in the process of validating agents as a sub-section of insurance applications processing. This process deals with verifying that an agent’s credentials are valid and in good enough standing to meet compliance requirements. While validation is essential in ensuring the integrity of an application, this seemingly straightforward process can be plagued with inefficiencies of unnecessary repetition.
How Does It Become Status Quo?
A lot of the flaws in insurance company processes – including agent verification – can be traced back to a disorganized approach in the initial design of the process. Lack of standardization and poorly developed policies and procedures lead to ambiguity and poor quality when tasks are first being handled. For example, if no set list of mandatory information necessary to validate an agent has been established, then it’s likely that the initial case manager handling the file will not collect all the information required for validation. When the file is subsequently handed over to the next agent in the process, they will realize the information is incomplete and will have to repeat some portion of the data gathering procedure.
Poor verification during the intake stage then leads to repetition and rework down the line, and as the application progresses through this process, it creates a diminishing trust in the collaboration around it. Front line employees start to perceive the lack of quality as norm, and repetition as the only quality control solution.
It Can Be Changed
The cumulative repercussions of repetition on operational profitability can be significant; but finding and eradicating the waste frequently proves difficult. The faulty processes are usually so deeply rooted in everyday operations, they are not easy to pick out.
To start down the road to reducing repetition, inefficient processes need to be identified using structured observation to root out poor design, and to separate value-added from non-value-added activities. An analysis of management operating systems and behaviors of the process participants will further help to identify repetition and find improvement opportunities.
This is the approach Trindent Consulting uses to address inefficiencies and find improvement opportunities in processes, systems, and behaviours. We work with our insurance industry clients to not only identify improvements, but to implement them and train client staff on how to sustain them. Our typical results include a significant reduction of handling volumes, along with reduction of handling time, which, when realized, has an immediate effect on the bottom line.
Click here to read more about how Trindent’s approach can work for you.