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Six Sigma Benefits the Insurance Industry

The insurance industry has also seen great benefits accruing out of the implementation of Six Sigma tools and techniques for its processes. The improvements brought about with the use of the Six Sigma can be seen in speedy settlement processes, speedy policy conversion processes, etc.

Improvement Opportunities in Processes

• Policy conversion process: Insurance firms have to be constantly on the lookout for new ideas and techniques that would help to reduce the policy conversion time.

Using Six Sigma’s tools such as Voice of Customer (VOC), insurance companies can determine the customer needs and requirements. This helps them to revise the service offering (i.e. the insurance proposals that they make to customers).

With a better understanding of the customer requirements and the adjustments to their policy proposal, they can well expect increased policy turnaround times.

• Claims settlement process: The claims settlement process is a very critical process for insurance companies. Timely processing of claims helps to sort out issues with family members.

When the processing of claims takes too long, customer satisfaction may be affected to a large extent. Six Sigma helps bring about a systematic flow to the enumerable processes and sub-processes.

It enables automation tools and techniques to be used for different processes. This helps the speedy processing of claims, thus bringing about customer satisfaction.

Benefits to Insurance Companies

• Better decision-making: Six Sigma is useful for managers to base their decisions on statistical data collected for the purpose to provide the best possible insurance policy to policyholders.

Insurance industry decisions are no longer dependent on the gut feelings of the insurance providers and their managers.

• Structured approach: Insurance companies have benefited from the disciplined approach that Six Sigma has brought to the entire process.

The approach also helps in the elimination of waste, thus leading to a reduction in the cost of the services. Moreover, the systematic approach also means highly improved quality of processes at greater speed and lesser level of rework and workaround.

It also helps companies to reduce costs, increase savings and avoid any drastic cost-cutting measures.

• Improved customer satisfaction: Six Sigma aims to achieve customer satisfaction. The best tool that Six Sigma offers is VOC, which enables the team to understand the prospective customers’ and policyholders’ needs.

As insurance companies can understand and satisfy all the customer needs, it builds up loyalty among policyholders. The loyalty of the customers means a lot for the long-term success of the business.

The insurance industry has benefited from the acceptance of Six Sigma to undertake effective and strategic planning and to link them to the high quality operational performance.

They can now plan and aim to achieve higher goals to attain increased customer satisfaction and increased profitability.

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