In 18 months the division produced a profit of £1.1m
THE ORGANISATION
A division of a major insurance cover provider to motorists to cover the legal costs of pursuing a claim against a third party driver
Employs 130 staff in 7 claims offices
Had grown by 80% in 2 years and was expecting a further increase of 100% in claims in the next 3 years
Marketed both own products and 3rd party brands
THE ISSUES / PROBLEMS
The division was losing £200k per annum
There was a major disparity in the caseloads and cost of settled claims between each office
The forecast growth was unlikely to improve profitability, as historic growth was replicated by a parallel growth in staff costs
Inefficient systems which cultivated a culture of 'walk and talk'
Unclear definition of roles and responsibilities
No means of measuring broker performance
Lack of product costing and pricing
Lack of capacity planning to balance caseloads between offices
PROJECT ACTIVITIES
Analysis of structure in order to understand decision making process
Study of document flow, which was replaced by faster and more cost effective processes
Analysis of broker performance, resulting in variable pricing which would reward efficient brokers and penalize the inefficient
Cost analysis by product group, to enable contribution to be assessed and unprofitable products to be eliminated from the portfolio
Initial closure of 3 claims offices, eventually moving to a single office in a low cost location
Creation of a management and supervisory structure, thus providing for clear definition of roles and responsibilities
Empowerment of claims negotiators thus reducing requirement for supervisors to review all cases
PROJECT RESULTS
Clear definition of roles and responsibilities
Improved morale and job satisfaction
Balance between available capacity and demand
Faster case settlement
Elimination of unprofitable brokers and products
Improved client satisfaction.
In 18 months the division produced a profit of £1.1m - a return of 87 times the investment of the project.