Deutsche Allgemeinversicherung Harvard Case Solution & Analysis

Introduction

            Deutsche All misunderstanding ,which means German general Insurance came into existence in the year 1966. The company had been growing rapidly over the years and in the year 1996, the company had become one of the leading insurance companies. Also, the company had been writing around 48 billion in DM for around 32 countries for their premiums.

            The majority market share of the company came from Germany of about 51%. Within this 51% market share, 60% of the sales came from the retail insurance which normally related to life insurance, property, and health and income protection. DAV is considered as one of the giant in the insurance markets in Germany. DAV is also ranked as the second largest company in Germany.

            The company had developed a wide range of products over the years. The company provided its clients with outstanding customer service and expert and intelligent group of insurance risk managers. One of the smaller companies always focus on nibbling away their little market share whereas on the other hand DAV has maintained its prominent position in the insurance industry. The insurance market was becoming more and more ubiquitous and with the passage of time the customers was having problem to differentiate the services of one company from another. In such a situation, the customer service of the company differentiated the company in the insurance market.

Problems & Issues

            The Process Measurement and Improvement project was launched by DAV. This project was divided into two phases which were the measurement phase and the improvement phase. The head of operations development of the company, Nantucket was the one who had emphasized over this process and he was the one who had implemented the manufacturing style techniques for the improvement in the insurance industry.

            In order to check the accuracy levels throughout the company, the company took up a pilot measurement project with the help of New Policy Set-Up. The overall plan was designed and the plan included that a sample of work for each of the individual associates would be taken and based on that sample the general accuracy rate for all the associates would be analyzed in the policy set-up process which was just introduced.

            In order to test this project, the company made the extensive use of statistical process control such as the p-charts and control charts. The sample for each day for each of the worker was recorded as DAV for the new policy set-up group. However, as soon as the pilot process was introduced based on SPC, there were a range of concerns and issues that emerged and were significantly highlighted by the process.

            The issues that were highlighted by the new policy set up group related to the increasing concerns of the members that were performing, automatic charts, and the degree of mistakes, sample sizes and yard sticks for measurements of different teams. The SPC is one of the most popular methods for measuring and monitoring the performance of the processes. The SPC made extensive use of the control charts and p charts to monitor the progress and the performance of the processes. The SPC had built in tools to identify the variances in the measurements of the processes and also identify the specific causes of the variations.

            There were many other challenges which were faced by the management of DAV. One of the issue was that the actual accuracy rate of the process was not known by the management of the company. Kluck wanted to increase the efficiency of the process and to determine the accuracy number. Secondly, other issue was that Kluck wanted that his employees become used to the new process and that it becomes a part of their everyday jobs, which enhances the performance of the management and management quality.

            However, the most core issues faced by DAV which needed specific solutions were:

  • Those teams that had a higher accuracy rates were starting to feel burdened as the sample sizes increased.
  • Defining specific problems and the quality of measuring those problems.
  • Most of the senior managers had started to behave negatively to the chartered data. Most of the people were becoming more concerned about the remaining people that were employed.
  • The measurement and the sampling process was causing frustrations and within the context of a legal department it was critical to measure the bad and good work.

Most of the groups had to charter the data manually and they were frustrated with this and they wanted that this should be done automatically. .................

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