/Down with batching

Down with batching

Moving away from batching at lean insurance company SulAmérica

FEATURE – To speed up the issuance of insurance policies, a SulAmérica department decided to move away from big batches and start working in flow.

Words: Ricardo Felix, Operations Manager, SulAmérica

SulAmérica decided long ago to focus on the SME (small- and medium-sized enterprises) market as a business strategy in the healthcare insurance segment. This proved to be a good move, with the SME insurance quickly becoming a best seller within our healthcare portfolio. This is the retail side of health insurance, catering for small business owners and giving them access to our network of hospitals and services.

The process of issuing the policies, however, wasn’t quite as successful as the product itself. It took us days – typically around two weeks – to complete it. Worried about being able to control this process, we put in place a complicated system of checks consisting of inputting each proposal we received from the Sales Department into an ExCel sheet. This, coupled with a working system based on batching, meant that we received three large stacks of proposals per day from the Dispatching area.

Until the whole batch was processed and all the related information transferred onto the ExCel sheet, the next step in the value stream could not start their work – and that’s how delays occurred. Before a policy could be issued, we need to ensure all the documents are there, input the information in the system, check that the client’s signature is authentic, make sure the client has no pre-existing conditions, occasionally call for a medical analysis (upon submitting a proposal, a client needs to include Personal Health Declaration; in the presence of pre-existing conditions, SulAmérica needs to determine whether we can underwrite the risk), and finally perform a quality check.

The delays in the process also caused people from the Sales team to call us all the time to know when a proposal would be issued (only then do brokers get their commission, so you can imagine their hurry). Of course, clients can only begin to benefit from their health or dental policy after the policy number is issued.

I was the person responsible for all the handoffs between steps. Each of them was registered on the ExCel sheet – which meant that I saved and carried its backup around at all times, saved on a pen drive that I kept around my neck all day long. My colleagues joked that I went to sleep with it, for fear of losing it.

At first, the team struggles to see the batching problem. They knew there were issues with the process, but couldn’t see the biggest of them all. One day, during our first attempt at a hoshin exercise, our coach Flávio Battaglia from the Lean Institute Brasil applied a dynamic using a batch-and-flow signature process and we suddenly understood that it reflected our current process. It was clear that it made no sense to work in batches.


One of the first measures we took was to remove the checks in between process steps – our biggest bottleneck – keeping only one at the beginning and one at the end of the process. As a result, we saw a dramatic reduction in our lead-time. Eventually, controls were removed altogether, because complete and correct proposals could be processed on the same day. (The only ones that couldn’t be completed in a day were those that were missing information and had to go back to the broker and those that had to be sent to medical analysis.) Same-day processing of a proposal is a competitive advantage for us, of course.

To move away from batching – previously, we received three deliveries per day of almost 100 proposals each – we introduced a new system in three steps, called House 1, House 2 and House 3. Despite clear layout challenges (one of the Houses was located in a different room), the system now made for three clearly defined steps. An unwanted effect was that the different teams started to compete with one another and often ran to the Dispatching area to get more proposals to work through. House 2 and House 3 were forced to wait for House 1 to finish its work and started complaining. So, while improving the situation, the Houses system also created some problems.

After we moved to a new building, we could place all the steps in a line, one next to the other. It was a very logical organization of work that enabled us to move away from the Houses system. By taking measurements to deeply understand each task and how long it took to complete it, we could allocate our resources more effectively. So, for instance, we assigned two people to the Dispatching and seven to the Analysis step (the core step in the process, where all information is put into the system and the team checks that all the documentation is there; if anything is missing, the proposal is sent to another team that is tasked with fetching missing information). After that, we implemented standardized work for each of the tasks, to bring consistency to the way they were performed and to prevent errors. As a result, the team was able to get to a point where they process one policy at a time – one-piece flow, we lean practitioners call it.

A huge contribution to the achievement of this goal came from the use of visual tools and the introduction of daily management meetings. First of all, we placed boxes next to each step in the process, to make potential bottlenecks clearly visible.

To organize our day and allocate resources in the best possible way, we started using daily management boards. They tell us how many people are in on any given day and help us to assign them to different tasks. By now, everyone in the team understands the board and we manage to rotate leadership weekly. To make it easier for everyone to help with problems and speed up the whole process, we also put a lot of emphasis on multi-skilling: we created a “capability autonomy index” to see who could do what in each team and identify opportunities for further capability development, which became a big responsibility of the leadership team. It was great to see how, over time, people became more proactive and started to pay more attention to the goals they set for themselves and how they would impact the whole of SulAmérica.

The proof is in the pudding, they say. The proof that our system works lies in the fact that the Department can deal with peaks in demand (whenever we run a campaign or before we adjusted our prices, for instance) much faster and more efficiently than ever before.

The SME insurance team at SulAmérica


The success of the SMEs Department continues to inspire others in SulAmérica to adopt similar measures and approaches. In the area I work in now (which deals with customer complaints and policy cadastral changes, as well as insurance products for professional associations or unions), for example, we are currently focused on daily management. However, I encountered a common pitfall of lean implementations here: the dreaded copy-and-paste approach, with managers simply taking good practices they had seen elsewhere and dropping them into their processes.

We quickly realized we had to involve the teams in the daily management. To engage them in this practice, we turned it into a game: tasks became missions, with different teams being assigned the figurine of a superhero they can use to track progress of their activities. Our goal is to deal today with 97% of the requests that arrived the day before. To do that, we need to reduce delays as much as possible, which entails understanding our capacity and workload – daily management represents a powerful tool for this. By using it, we ensure that those who need help get it and that the right number of people is assigned to each step in the process.


Ricardo Felix is Operations Manager at SulAmérica, in Brazil.