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Liberty Mutual

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Submitted By Tonda08
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Tonda Gaines

Liberty Mutual Insurance

MGT 513-Advanced Economics

Indiana Wesleyan University

March 29, 2011

Liberty Mutual Holding Company, Inc, is a US-based property casualty insurance

company provider. It operates as the parent company of Liberty Mutual Group and its entities.

Liberty Mutual offers a broad range of insurance products and services including personal

automobile, homeowners, individual and group life, workers compensation, multi-peril

commercial, group disability, fire, and surety. Less than ten years ago, the Liberty Mutual

Group, was best known as a workers compensation carrier that used multi channels to distribute

its products. The Liberty Mutual of today enjoys a well-earned reputation for engineering

disciplined yet dramatic changes in its structure and operations to create an energetic, efficient,

and unmistakably agent-centric organization. In October 2008, Liberty Mutual completed its

largest acquisition to date by acquiring Safeco Insurance Company. Safeco Insurance Company,

was a solid independent company that focused on selling its product through independent agents

and based out of Seattle, WA. With the acquisition, Liberty Mutual has now the fifth largest

property & casualty insurance company in the United States and employs over 45,000

employees. An insurance company is only as good as its claims service backs it.

Specifically with personal policy holders, when an accidents happen, Liberty Mutual policy

holders expects their insurance company to get it right the first time from start to finish.

Currently, at Liberty Mutual, employees are operating out of four separate claims systems,

How can Liberty Mutual deliver on the promise when operating out of four systems and expect

To become the number one property and casualty company in the United States for personal

lines. In this paper, I will provide some alternatives to this salient issue, provide

recommendations and how to implement my final solution.

As previously stated Liberty Mutual has made several acquisitions with Safeco Insurance

being its largest to date. However, with each acquisition Liberty Mutual never consolidated its

claims system with each acquisition. Moreover, when Safeco Insurance was acquired, Safeco

employees are charged with handling not only its personal policy holders but each company that

Liberty Mutual acquired previously totally four claims systems. Operating out of four separate

claims systems delays the claims process from start to finish, which in essence affects customer

service, which effects efficiency, which effects renewal of business.

There are alternatives to this salient issue; Liberty could continue business as usual, by

continue to subject Safeco employees to work in four different operating systems . Update each

system to fix any kinks that can be worked out. Hire additional staff, assigning staff to each

claims system, which will in the long run is not cost effective. Or Liberty could create an all in

one claims system that would have the capability of having all policyholders information in one

system.

The recommendation that is recommended is that Liberty Mutual acquire a claims system

that is tailored to all four claims systems. By purchasing an all in one claims system, it will

eliminate delay in claims processing, it will improve customer service for the company, and the

possibility increase renewal to current policy holder and potential new ones.

How can this amazing recommendation be implemented??? Currently, Liberty Mutual

has for several months researched and met with several vendors who provide this

recommendation. It will take time, there are many contributing factors that will make this a

reality. The price tag for this implementation will be in the million, however it will assist

Liberty Mutual accomplish its long term goal of becoming the number one property and casualty

company in the United States. This implementation will take a least a three year span to become

live. The reasoning for the three year timeframe is due to approval of the CEO, testing of the

actual claims system, conversion of policies, piloting of claims professional, training of

employees, and finally becoming an functioning system.

In conclusion, by acquiring an all in one claims system, Liberty Mutual will become

efficient with claims handling practices, creating less delays in the claims process, and

provide five star customer service. Not only will this business move create a happy policy

holder, it will create a happy employee who will be proud to be apart of a winning company,

who cares about not only the dollar but its employees.

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