Six Sigma In The Insurance Industry – Industry Insurance

Six Sigma concepts and philosophies were originally developed for improving the overall quality of business processes in the manufacturing sector. Companies like Motorola and GE were among the first few that successfully introduced Six Sigma concepts in their business processes. However, with the development of newer tools and techniques, Six Sigma is now deemed appropriate for the services sector as well. The usability of Six Sigma in the services sector is easily evident from the increasing number of finance and insurance companies that are opting for Six Sigma.Consumers are increasingly becoming aware of the quality of services being offered to them, making it essential for the services industry to implement quality improvement techniques like Six Sigma for conforming to customer expectations. This is especially true for the insurance industry where the relationship between the insurer and the insured is still largely governed by sustained personal contact. By implementing Six Sigma programs, insurance companies have been able to offer quality services at affordable rates to their customers.Identifies Key Business ProcessesUnlike other quality management practices such as Total Quality Management (TQM) whose effectiveness is difficult to measure, Six Sigma based improvement programs make use of statistical tools, which can measure the effect of changes being made in a very short time. Six Sigma focuses on process orientation, enabling organizations to identify key business processes that are necessary for improving customer satisfaction. This helps managers in understanding the exact requirements of their customers and in altering business processes to suit customer needs and expectation.Follows A Disciplined ApproachSix Sigma has helped insurance companies in improving quality as well as reducing costs of services offered. It has enabled insurance companies to follow a disciplined approach, which has helped in preventing errors, minimizing hand-offs, and eliminating rework and workarounds. It has also helped in increasing the speed of business processes used in the insurance industry.Helps In Making Informed DecisionsSix Sigma has enabled managers in taking informed decisions based on statistical data. With the use of Six Sigma tools and techniques, managers no longer have to rely on their perceptions or gut feelings for rendering the level of services promised to policyholders, clients, and prospects.Helps In Building Customer LoyaltySix Sigma emphasizes on understanding the needs of the customers before making any changes to business processes. This helps insurance companies in building customer loyalty among their policyholders, which is necessary for the long-term success of any business organization. Insurance companies can also hope to increase their market share, as satisfied customers are most likely to recommend a company that offers quality services while advising a friend, relative or business associate.
Helps In Reducing CostsSix Sigma tools and techniques aim at streamlining business processes in such a way that helps in reducing costs. This helps insurance companies to improve their savings and avoid drastic cost-saving measures such as downsizing, which can have a negative effect on employee morale. It can also create doubts in the mind of policyholders and prospects as downsizing usually attracts a lot of negative publicity.Six Sigma has helped the insurance industry in bridging the gap between planned strategies and actual operations by providing analytical and in-process performance measurement tools. These tools are used for comparing planned goals and objectives with actual outcomes and for finding the reasons as to why a particular business process is not giving the desired results. Once the exact problem has been pinpointed, managers can make the necessary changes that will help in improving overall quality of services rendered to policyholders and prospects.

Ag Industry and Climate Change – Industry Insurance

Within the next 40 years, food prices will climb steadily. After that, things could get wild. News from the United Nations’ Food and Agriculture Organization (FAO) states that changes in climate – global warming, if you will – is expected to have a dire effect on developing nations, but will also negatively impact food pricing across the board.
Estimates by the organization show predictions of agricultural productivity decreasing by as much as 21 percent by 2050, with African countries potentially becoming more dependent on food imports for its food supply.Here’s what we can expect, says the organization: higher temperatures, higher levels of carbon dioxide emissions, fluctuations in rainfall, and more frequent natural disasters. All this will be happening as our global population reaches 9.1 billion.However, solutions to curb the prediction’s accuracy are already underway. The FAO has studied the situation and located some solutions to help decrease the effects of global warming and help protect food supplies going forward. Soil carbon sequestration – transferring carbon dioxide from the air into the soil through crop residues and organic solids – decreases the re-emission of carbon dioxide back into the atmosphere.FAO is also recommending improvement to current nutrient management programs, restoration of degraded lands, and the use of new technologies to further protect against climate change.
Make no mistake – the agriculture industry within the United States and other developed nations will play a major role in future food supply chains. Likewise, insurance companies have received the call to action by Lloyd’s, which stated in a recent report, Climate Change or Bust, that “The insurance industry must start actively adapting in response to greenhouse gas trends if it is to survive… There could hardly be a debate of greater importance to the insurance industry.” Some figures have insured losses in the year 2040 at a record $1 trillion for just that year.The agriculture insurance industry is now considering new products to respond to increased climate change exposures, including risk controls and outreach programs to clients to raise awareness of the issue and possible solutions. It’s too early to tell what impact such measures will have on your business, but climate change will certainly play a primary role in the future of your business.