Insurance Process Improvement

Work Smarter, Not Harder

Green geckos, good neighbors, good hands, 15 minutes, 7 minutes, $500, 24/7, to bundle or not to bundle, forgiving accidents…

Insurance organizations are generally focused on the same things; acquiring new customers and retaining current customers. It’s all about keeping customers happy. Based upon their marketing campaigns to the public, insurance organizations are focused on service, cost, quality, speed, and expertise. These objectives can be achieved through strategic insurance process improvement – working smarter, not harder.

Keep the Customers HappyInsurace Process Improvement

The insurance world has recognized that lean helps them achieve their goal of keeping their customers happy. From shortening lead times on claims processes, to improving the quality of customer service, lean can be applied anywhere for insurance process improvement - from life insurance, car insurance, health insurance, etc. Insurance organizations that recognize the strategic benefit of people development and insurance process improvement will have an advantage over their competition through:

  • Faster claims processing,
  • Knowledgeable and empowered customer service representatives,
  • Leadership alignment,
  • Process waste reduction
  • Value-add activity improvements

Creating the lean enterprise by implementing lean throughout an organization begins with strategy development and deployment. Strategy development starts with defining breakthrough goals, developing a leadership strategy, performing operational and lean assessments, creating A3 work plans and PDCA.

The Foundation of Insurance Process Improvement: A Problem Solving Culture

The lean enterprise is a problem-solving culture. Becoming lean means that all people in the organization are focused on identifying and eliminating root causes of problems. In the lean enterprise, having “no problem” is a problem because it means people aren’t paying attention. Every insurance company has and will continue to have problems. Insurance organization leaders need to give people the tools and freedom to engage in insurance process improvement. This will be tough on the organization in the beginning, as many managers believe their job is to hide problems. But in a lean enterprise, finding problems is good! Hiding problems is bad!

The lean enterprise finds solutions to problems through sharing of best practices. Known as Yoketen, this is the art of sharing knowledge across an organization. Sharing knowledge and ultimately creating a learning culture is the overarching essence of the lean enterprise.

Insurance Process Improvement: Value-Add Process or Not?

To take an organized approach to understanding core issues, the first necessary task is to break down the problem. Understand the current state so opportunities can be identified to focus on increased efficiency. The lean enterprise is focused on adding value to the customer; any activities that do not add value to the customer are considered waste. The sequence(s) of activities that add value to the customer comprise what is called the value stream – the flow of the important parts of the process that create the products and services for the customer.

Value-added (VA) Activities/Processes: Any activity or process the customer will be willing to pay for. For example, a claims processor entering customer data correctly into the system would be a value-added process. VA work needs to be optimized and improved upon.

Non-value-added (NVA) Activities/Processes: Any activity or process the customer would not want to pay for, but which cannot be eliminated at this point. For example, legislative and Homeland Security processes may be considered business-value-added. These processes need to be rationalized and then minimized and automated where possible.

Value stream improvements such as lead time reduction and waste elimination are achieved through the utilization of value stream mapping, process mapping, and cross-functional collaboration. Understanding organization from end to end truly allows companies to identify areas of particular importance that need to be analyzed for insurance process improvement. Organizations must understand what the company is doing, how it is doing and why the process improvements are necessary. In breaking out the problem we can distinctly identify areas to create solutions that help drive value.

Posted by LeanCor Supply Chain Group

LeanCor Supply Chain Group is a trusted supply chain partner that specializes in lean principles to deliver operational improvement. LeanCor’s three integrated divisions – LeanCor Training and Education, LeanCor Consulting, and LeanCor Logistics – help organizations eliminate waste, drive down costs, and build a culture of continuous improvement.

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