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    Managing Complexity at a Major Insurance Broker

    The Company

    This affinity insurance broker manages policies for 100+ global brands, with millions of new insurance contracts annually covering policyholders in 10+ countries.

    Its banking, telecommunications, manufacturing, and retail clients offer their customers insurance policies and service contracts for credit cards, mortgages, cell phones, concert tickets, and consumer products. 1,000+ employees work at several international locations.

    Situation and Challenges

    The company has grown steadily, with an expanding list of brand-name clients for whom high quality, speed, and custom solutions are a given.

    Operations teams must quickly and precisely handle a complex stream of policies, inquiries, and claims. With volume up 15-20% annually, 15,000 items arriving daily by email, fax, and mail, and an onslaught of phone calls, the backlog of work had become unmanageable. The company acquired software to automate document sorting and cut lead time, but the process still needed to be improved. Work in process remained stubbornly high at 15,000+ claims.

    As response times grew, calls and emails poured in from customers trying to follow up. This “failure demand” only added to the burden.

    Unhappy staff worked in a lackluster environment with too much paperwork and rework, unpredictable quitting times, excess overtime, and inconsistent targets. Customer satisfaction was in jeopardy. To reduce claim times, improve customer experience and staff morale, and offer quality solutions for a growing list of clients, the situation had to change.

    Improvement Approach

    The company decided to engage in a broad lean transformation and called in Productivity Inc. to diagnose the situation, help set a master improvement plan, and work with managers and teams to change things.

    Improvement began in the mailroom (the entry point for most claims) where 20+ staff opened, sorted, qualified, and scanned mail for processing. Qualifying claims is a complex and critical task; mistakes here wreak havoc downstream and add to failure demand.

    The team started by mapping their “value stream.” They analyzed incoming work (customer demand) their processes, and waste. After learning lean principles, they defined a future state that would make the workload visible, organize it to be predictable, and create continuous flow where possible (see p. 1 sidebar, Making Work Visible).
    They developed “standard work” for processes, aligned targets across operations, and shared them among the staff. To improve consistency, quality, and flexibility, people were cross-trained.

    The daily routine was revamped to start by analyzing the workload every morning and estimating time to complete it. By noon, everyone would know the work volume, how many people were needed in each area, and when they could expect to finish for the day.


    By reorganizing the work and making it visible, the average length of day in the mailroom shrank by almost two hours. Same-day mail processing is now guaranteed.

    Downstream work teams know that new claims will be in the system within 24 hours. As the backlog (and “backlog attitude”) has improved, failure demand has plummeted. Work is now predictable and transparent. Everyone knows what needs to be done at every pitch interval, every day. Productivity is up and work in process has been slashed, while volume continues to increase as more new business comes in.

    Monitoring the work has created new discipline. With shared targets and predictable schedules, it all adds up to a much better workplace. People are less isolated in the open layout, happier, and more engaged. Teams take ownership for processes, for communicating new standards, and for cross training. Meaningless tasks have been eliminated, employees are learning new skills, and everyone can see how their efforts contribute. They are energized by the daily meetings and proud of their accomplishments. Instead of unpredictable overtime, they now have extra time to work on more improvement.

    Making work visible

    To improve flow and visibility, the team eliminated walls and rearranged desks. They also rearranged the work.

    Each morning, work is organized into “families” with like processing needs, divided into daily time slots or “pitch” increments, and posted on a white board or “flow management board” so that it can be managed. Pitch increments vary depending on the process, but typically range from two-hour to half-day windows.

    Supervisors have become “flow managers.” Every morning each team works together to review daily demand, define priorities, and assign staff to handle the flow. At each pitch interval, supervisors complete the board and the team reconvenes to monitor progress and adjust as needed.

    Integration and rollout

    The same principles were applied in other operations struggling with complexity and failure demand, including departments handling phone calls and emails for credit card and cell phone policies.

    Teams mapped value streams, classified demand into “families,” and established response priorities. Work is now organized by recency, to clear out older requests first and cut failure demand.

    Key outcomes

    • Work in process reduced by 80% (from 15,000 to 3,000) with global volume growing 15-20% annually.
    • Claim processing lead times cut more than 50%.
    • Improved morale and productivity, with fewer new hires and drastically reduced overtime.
    • Greater agility and flexibility with cross-trained staff.
    • Improved customer satisfaction and customer experience ratings.
    • More new business from existing and new customers; increased revenue.

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