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Six Sigma For Insurance Firms

Mar 11, 2008
In effect, we can say that Six Sigma is applicable in any organization, irrespective of the actual number of processes that might be there in the organization.

To understand how this process is helping insurance firms, it is essential to talk about some of the main processes where it has been successfully deployed.

Policy Conversion Process

The main worry for most insurance firms is usually policy conversion turnaround time, which determines how well the firm is able to market and sell its policies. Since turnaround time reflects the overall time it takes for a proposal to get converted into a policy, it becomes necessary for insurance companies to undertake initiatives that will help in reducing the existing turnaround time. This is exactly where many insurance firms have felt the need to deploy highly effective process improvement methodologies such as Six Sigma.

It makes sense to deploy 6 Sigma, because reducing the turnaround time depends a lot on satisfying customer needs and expectations, a tough task that can only be accomplished with this type of process. What it does is that it utilizes time-tested tools such as VOC (Voice of the Customer), which go a long way in satisfying customer needs and expectations.

By using VOC, insurance firms are able to assess the exact needs and requirements of their customers, which in turn allows them to make the necessary changes in their service offerings, i.e. insurance proposals. This automatically results in increased customer interest and consequently increased policy turnaround time, often the main objective of insurance companies.

The Claims Settlement Process

This is another area where insurance firms need to be extra cautious - because inability to process claims in a timely manner can easily tarnish the brand image and reputation of the concerned insurance firm. By communicating the lack of efficient services to their family, friends and associates, even a single unsatisfied customer can seriously affect the firm's future business prospects, something that makes it all the more important for insurance firms to deploy Six Sigma.

This process helps because it enables insurance firms to streamline their claims settlement process that normally comprises of various other sub-processes, often leading to complexities and time delays. Off late, it has started utilizing automated tools and techniques that have enabled insurance firms to make even more improvements in their existing claims settlement process.

For the best results, insurance firms need to deploy Six Sigma right from the time when a new policy is being designed and developed. Ongoing deployments are no doubt possible as is evident from changes made in existing policies, but since not much can be said about the effectiveness of such deployments and since there is plenty at stake, it makes sense to implement Six Sigma right from the beginning. It is only then will the concerned insurance firm be in a better position to ensure the success of its insurance policy proposals.
About the Author
Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution's Six Sigma Online offers online six sigma training and certification classes for six sigma professionals such as, lean six sigma, black belts, green belts, and yellow belts.
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