The document discusses the quality program at an insurance company. It aims to improve customer satisfaction and broker relationships by focusing on key quality characteristics like accessibility, accuracy, responsiveness and timeliness. The program includes new hire certification to ensure minimum processing knowledge, ongoing production quality checks, and metrics like defect free rate. It has led to achievements like a quality culture, production quality standards, and an IT system to support quality initiatives globally.

1. ASQ SECTION 300
INSURANCE COMPANY CASE
Jorge Rosas – Quality Manager
Chubb Group of Insurance
New York, October 12, 2010
All material presented is Chubb & Son Proprietary information and may not be used or replicated
without prior written consent.

2. Broker Survey Conclusions
• Broker perception of a high quality service hinges on
the relationship with front line team (UW/UA/CSR).
• This perception of high quality service has a definite
impact on both the overall broker satisfaction and the
probability of placing additional business with Chubb.

3. Key Characteristics* of High
Quality Service
• Ease of access and communication with company
representatives (Accessibility)
• Conformance with Client/Broker specifications and
requests (Accuracy)
• Timeframe of contact after submission
(Responsiveness)
• Delivery of quotes within specified timeframes
(Timeliness)
*Based on VOC survey

4. Customer Satisfaction Benefits
• Increased loyalty
• Higher growth
• Improved renewal retention rates
• Enhanced market share
• Decreased acquisition costs
• Improved profitability
• Rising stock prices

5. The Kano* Model – Impact of Quality
Characteristics on Satisfaction
• Delight (key drivers):
– Accessibility High
Delightful characteristic
– Accuracy
– Responsiveness
Broker Satisfaction
– Timeliness
• Performance (basic Max pt.
drivers), i.e.:
Performance
– Technical expertise characteristic Must-be characteristic
– Competitive rates
• Must-be (non drivers),
i.e.:
– Financial solidity
– Reputation
Low Investment in Characteristic
*Dr. Noriaki Kano, Science University of Tokyo

6. Stock Performance of Companies with Quality
Programs (Kopp Index) vs. the S&P 500 Index

7. Therefore…
By investing in the enhancement of those quality
characteristics that drive delight (Accessibility, Accuracy,
Responsiveness and Timeliness), we will exponentially
improve the probability of brokers placing business with
Chubb, thus improving the potential appreciation of Chubb’s
stock.

8. What is the Quality Program
Measuring?
• It concentrates on the accuracy of the
transaction
• Measures customer sensitive characteristics
• Tracks regulatory compliance

9. How does this impact the
Brokers?
• The goal of the Quality Program is to deliver error free
policies to the Brokers
• Minimizes Broker E&O exposure
• Enhances Broker efficiency by reducing rework and
“bounce”
• Uncovers areas of improvement that both the Broker and
Chubb may influence

10. How can we use the Quality
Program as a Marketing tool?
• By providing Broker specific reports that show how
Chubb is performing in customer sensitive Quality
metrics
• By using the same Quality checklists used by Brokers to
control Carrier quality, so that they are comfortable that
we are measuring what is important to them
• By establishing differentiated Quality based SLA’s

11. QUALITY PROGRAM REVIEW

12. The Past. . .
• Quality assessments were performed by
individual zone or branch
• Compliance and state-specific-oriented vs.
customer-oriented
• Diverse checklist, administered with great
variation
• No standardized tools or systems to capture
data

13. The Present…
• Standardization of checklists
– New Hire and Production Line QC
• Standardization of procedures
– New Hire Certification and Random Sampling
• Designated person to check consistently
• Standardized reports and metrics

14. Quality Improvement Benefits
• Customer Satisfaction: the overarching Quality
Management System and the Process Improvement
methods are predicated upon the Voice of the Customer
(VOC), which is a customer driven methodology.
• Decreased Costs: through focusing on continuous and
relentless improvement in end-to-end quality, more
efficient and effective processes will be implemented
resulting in decreased rework and improved capacity.

15. QUALITY AND PROCESS IMPROVEMENT
Methodology Customer
Satisfaction
DESIGN
US
MEASURE IN UO NT
CONTROL NT EME
Process CO OV
R
IMP
Improvement
Quality of
ANALYZE Performance:
QUALITY
IMPROVE
effectiveness
Quality of and efficiency
Conformance:
uniformity and
dependability
Quality of Design:
customer orientation
Brainstorming, Cause & Effect Descriptive stats, SPC, Process
analysis, Customer surveys, Calibration, CAPA, capability,
ServQual, QFD, Quality Reliability, Quality manuals Quality audits,
characteristics, Data mgt COPQ, ROI
QUALITY MANAGEMENT SYSTEM

16. • 100
% Pr
• Pro e-
ductio issuance
W or k n or P QC
ractic
• Sel
f- e
chec Review w
k ith NH
• Rev lists
ie QC
proce w of Cer
ss tificat
ion
New Hire
Practicum
Training QC
• 100
% Pre
• Pro -
ductio issuance
• Pro n wor QC
cess k
QC
Stage
1 Rev
iews
Stage 1
New Hire
• 50%
Pr
• Produ e-issuance Q
ct C
• Proce ion work
ss Stag
e 2 Re
views
QC
New Hire Certification
Stage 2
New Hire
Certification
• 30 T
r
CSR, ansactions
issuan20 per UA per year, p
- Post er
• Prod ce QC -
uction
• On-g work
oing
Quality Program Phases
Production QC
Production QC

17. The Checklists - CTQs
• Created by a cross-functional team of experts
• Designed specifically for New Hire and
Production QC
• Customized for each Line of Business subject to
QC
• Compliance and Customer focus
• Yes/No answers (binary distribution) = less
ambiguity

18. QC Staff Roles
• Quality Coordinator
– Lead and/or facilitate the quality control process within one or more
locations.
– Focus on Quality process coordination and generating reports.
– Serve as the liaison with the other functional areas of the Centers to
provide support to comply with quality initiatives.
• Quality Specialist
– Responsible for the ongoing Branch and Center QC processes.
– Analyze quality trends and provides feedback to Center/Branch
management.
– Maintain communication with Home Office Quality on system and
process issues.
• Quality Technician
– Provide quality support in the Centers.
– Perform basic quality tasks.
– Responsible for the NHQC transaction reviews.
– May switch between QC and CSR responsibilities.

19. New Hire QC Method
• A Continuous Sampling Plan was chosen as the best
way to obtain a statistically valid sampling procedure
(CSP-C i =10, f =0.5, c =0)
• A certification algorithm was created as a way to ensure
consistent quality of WPC’s products.
• All transactions subject to QC
• All reviews performed pre-issuance

20. Certification Algorithm
• Conforming Reviews:
– Those in which 85% or more of the checklist questions are
considered correct.
• Stage 1 QC:
– 100% control on all transactions.
– 10 consecutive reviews must be considered conforming before
moving to Stage 2.
• Stage 2 QC:
– 50% of the transactions will be reviewed.
– 5 consecutive reviews must be considered conforming before
certification can be issued.

22. Production QC Method
• Conforming Reviews: 100% of checklist questions
considered correct
• Quota random sample, evenly distributed, minimum 30
reviews per year, c = 0 (Zero Acceptance Number)
• Book/Issue transactions only, on major LOB
• All reviews performed post-issuance
• Defect Free Rate (DFR) metric
• Goals established at individual, unit and Branch level,
based on DFR
• Trend analyses used for CAPA

23. Global Quality Information System (GQIS)
Quality Sampling
Characteristics Plans
Repository SM and Procedures
(questions)
QM
COGNOS Business
BPM Intelligence Reports
QC
Roles and
Workflows
QM = Quality Management, QC = Quality Control, SM = Statistical Methods, BPM = Business
Process Management

24. GQIS FEATURES
• BPM: automated workflow and process controls
• Automated data loads: ability to source data from multiple systems;
i.e. CUW IM, CSI Express, EZER (EUZ)
• Flexible sampling plans: large array of sample variables available
• Customized checklists: the checklists containing the quality
characteristics under scrutiny are designed based on user needs
• Role-based user profiles: GQIS uses different roles, which are
defined in the system’s BPM engine to provide a role-based view of
the process
• Variable workflows: system maps are configured based on user
defined and documented workflows and procedures
• Scalability: supports a large number of concurrent users in multiple
locations

25. Defect Free Rate (DFR) Improvement
PROCESSING CENTERS BRANCHES
DFR % Start Year 2 DFR % Start Year 2
ATD 83 91 ATD 78 84
Auto 61 89 Auto 77 81
Marine 91 95 Marine 74 83
Package 65 79 Package 79 88
Umbrella 70 85 Umbrella 49 68
WC 74 88 WC 88 93
TOTAL 69 84 TOTAL 71 81

26. Cost of Quality
Investments Losses
• Prevention: activities • Failures: the costs
specifically designed to relative to non
prevent poor quality in conforming products or
products and services. services
• Appraisal: activities – Internal Failure Costs: those
that are identified prior to
associated with delivery of the product or
measuring, evaluating or service, or that are not visible
to the customer after delivery.
auditing products and
– External Failure Costs: those
services to assure that are identified after
conformance with delivery of the product or
service to the customer.
standards.

27. Prevention – Appraisal – Failure Model
Failure
costs
Costs $
Total
Quality
Costs
Appraisal and
Prevention
costs
0 Quality % 100

28. Cost of Quality Results
CCI's cost analysis as a result of Finance for Improvement Program.
$25,000,000
Finance for Improvement Breakdown
Prevention Costs
$20,000,000 Appraisal Costs
Failure Costs
$4,057,175
$15,000,000
$3,443,651 $3,306,444
$10,000,000
$3,313,731 Quality
Program is
in a Medium
to Advanced
$5,000,000 $11,589,672 stage
$8,387,775
$-
2007 2010

29. Achievements
• Quality Culture: both centralized and field operations have adopted Quality metrics as
a key strategy element. Employees now accept and request their individual Quality
metrics.
• Certification: ensures all new hires reach a minimum processing knowledge threshold
prior to production duty.
• Production QC (PQC): ensures production line employees are performing up to
expected Quality standards through an ongoing feedback loop.
• Defect Free Rate (DFR) Goals: this metric, which indicates how often we are providing
the customer a flawless product and how well we are complying with applicable
regulations, has become an integral part of individual and Branch/Center level
performance goals.
• Global Quality Information System (GQIS): a dedicated Quality application has been
deployed throughout the U.S. It is the platform through which future Quality
products/services will be delivered for all domestic and international territories.