Six Sigma and P&C claim departments.

Zoltar

New Member
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Anyone have any direct or indirect experience with Six Sigma running P&C claim departments for large companies? Are the results good, bad, or mixed? I always thought Six Sigma pertained to manufacturing environments. Are the employees happy? Is customer satisfaction improved?
 
Six Sigma is about process improvement, or more technically, data-driven process improvement. I can see where it would be used in a claims department very well to help improve the claims process.

Unfortunately, it has NOTHING to do with making employees happy. If I was driving it, the ultimate goal would be customer satisfaction based on a series of metrics, such as claim turnaround time, paperwork defects, claims errors, etc. Of course, all of this and save claim $$$ too, because that is what management wants to be happy ;)
 
Almost forgot, the manufacturing part is more about Lean or Lean Six Sigma. That is about cutting out some unnecessary steps in the manufacturing process and tends to make people really nervous as it gets implemented. It does work (eventually) though.

I worked at a place that implemented this once (I didn't work in manufacturing, but my office was next to the floor). It was interesting to watch the process, but ultimately, the quality did go up which is what it was about (for this company).
 
Six Sigma is about process improvement, or more technically, data-driven process improvement. I can see where it would be used in a claims department very well to help improve the claims process.

Unfortunately, it has NOTHING to do with making employees happy. If I was driving it, the ultimate goal would be customer satisfaction based on a series of metrics, such as claim turnaround time, paperwork defects, claims errors, etc. Of course, all of this and save claim $$$ too, because that is what management wants to be happy ;)

Re saving claim dollars.

Wouldn't the better thing be to see that claims were correctly processed in relation to policy provisions so the company actuaries could then see that risk and service were properly priced and the legal department could make contract revisions if necessary?
 
I've heard some stories about Six Sigma and don't know if they're true. With an experienced staff (30+ years) that includes people with bachelor's and master's degrees, management times their people in the bathroom, plus another dozen statistics like that. It sounds like micromanagement on steroids. I've never heard of white collar professionals being timed in the bathroom. And employee turnover is triple what it was pre-Six Sigma (?).
 
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Re saving claim dollars.

Wouldn't the better thing be to see that claims were correctly processed in relation to policy provisions so the company actuaries could then see that risk and service were properly priced and the legal department could make contract revisions if necessary?

Actually, the six sigma process would try to impose repeatable standards in the claims process, which would ultimately lead to what you are after by giving better data on claims to the actuaries.

When I said save claims dollars, I needed to think more like management and say improve the combined ratio. I've never talked to an insurance company executive that had any problems paying out claims, heck, they realize that is why they are in business. But in the end, they combined ratio (and premium to claims ratio) need to work.
 
Re saving claim dollars.

Wouldn't the better thing be to see that claims were correctly processed in relation to policy provisions so the company actuaries could then see that risk and service were properly priced and the legal department could make contract revisions if necessary?

I believe what Dan is referring to is, every company wants to avoid bad claims. Also, there is a lot of money spent in claims management that really doesn't go to actual claims. So anything a company can do to avoid unnecessary overhead in handling claims is money saved. That can either go to the bottom line, actual claims or reduced premiums. Also, every fraudulent claim a company can avoid paying is big savings to everyone.

Adjusters don't work for free, just ask Jack. Claims reps, supervisors, managers, attorneys, etc. all have to be paid. Plus they need a place to work, supplies, benefits, etc.
 
I'm just surprised to the extent that Six Sigma involves micromanagement of things like having a stopwatch on people while they're in the bathroom, and monitoring whether their computer mouse is moving or still for any length of time. If this is true, it seems to be a humiliating situation for those employees with 30+ years at the company and a graduate degree. Employee morale would be in the toilet. What's next? Juice and cookies, and an afternoon nap?
 
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Six Sigma is about process improvement, or more technically, data-driven process improvement. I can see where it would be used in a claims department very well to help improve the claims process.

Unfortunately, it has NOTHING to do with making employees happy. If I was driving it, the ultimate goal would be customer satisfaction based on a series of metrics, such as claim turnaround time, paperwork defects, claims errors, etc. Of course, all of this and save claim $$$ too, because that is what management wants to be happy ;)
I don't think Six Sigma works. The company I considered going to is losing employees by the hundreds. The turnover rate is horrendous. No one (adjusters, managers, agents, customers) like the service under Six Sigma. It's micromanaging on steroids. It's a cluster.
 
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