PROCESS IMPROVEMENT OF CLAIM SETTLEMENT IN A LIFE INSURANCE COMPANY

• Main Author: Suzwamela
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/35503
• Institution: Institut Teknologi Bandung

Every stage of process in claim settlement is moment of truth. Completing the claim settlement process is crucial in running the life insurance business. In the condition where competition getting tougher with low awareness about the insurance need, losing customer become a major problem where disappointed customer can easily shift to other life insurance company to seek for better services and coverage. Company faces some issues in handling the claim settlement process. Current Service Level Agreements (SLA) do not satisfy customer needs anymore where some competitors has offer faster SLA. Improvement in current claim settlement process should be taken to be in line with the market. With low system support and cost efficiency objectives, company should seek cost saving improvement approach. Lean Six Sigma (LSS) becomes the options to be observed and used due to its capability, methodical approach and framework to streamline the process efficiently by eliminating waste but keeps continuing in delivering value to the customer. Instead of exploring and challenging entire process in claim settlement which impact to radical redesign and take longer time and higher efforts, LSS focus on alignment and maintenance to reduce the variation and streamline the processes to achieve customer satisfaction which may not necessarily change the entire process flow. LSS supports in understanding the real problem statement which is not only about How to Fasten Up the SLA but How to find a solutions in reducing current defect in processing time to meet the current SLA. The first priority of improvement is to reduce these defects and the improvement made generate positive result with 3.0 sigma of DPMO (lower than previous DPMO 2.7 sigma). The control process had proven that that the SLA of Claim Settlement can be reduced as follow: from 14 working days (wd) to 10 wd for settling the clean case claim, from 45 wd to 25 wd for settling the unclean case claim due to incomplete documents and from 60 wd to become 45 wd for settling the unclean case claim due to incomplete documents and investigation process. Some post implementation activities should be taken for 3 months to capture the possible out layers so that further action to revisit the improvement and ensure the implementation can be taken.