Industrial Engineering

Six Sigma safety net

AAEAAQAAAAAAAAVfAAAAJDE2ODU3ODVhLTc3MjQtNDgwNS04ODNmLWYxZjc4ODk0YzdmYg

Picture source: https://media.licdn.com
INDUSTRIAL ENGINEER – VOLUME 45: NUMBER 07

If a principal with Ernst & Young’s insurance practice has her way, lean, Six Sigma and other industrial engineering tools will help develop new products and practices in commercial insurance.

Gail E. McGiffin penned an article for the Insurance and Technology website noting the manufacturing sector’s rapid operational changes brought about by globalization, creative destruction and the revolution in operational and strategic practices stemming from advanced research and development, sophisticated computer analytics and product life cycle management (PLM).

First, commercial insurance carriers could design products like car companies design vehicle platforms, where product variation comes on top of a standard set of components. Like multiple lines based on core assets, insurers could build different classes of products from the same set of coverage components, according to McGiffin. Simpler, less expensive coverage plans could morph into more expensive insurance contracts for different market segments.

Insurers also could use advanced analytic tool sets and high-quality data to transform the industry, much like high-powered CAD systems have revolutionized product design. And forward-looking carriers, she wrote, already embrace PLM concepts to make sure they identify and maintain the components necessary to all products, along with options and elements that can be tailored for different customers and various distribution channels.