In the realm of motor insurance, customers judge the claims experience by a few practical outcomes: How quickly was my claim acknowledged? When will my vehicle be assessed? When can repairs begin? When will payment be made?
Value Stream Mapping (VSM) makes the complete flow visible. Rather than examining the contact centre, assessors, repairers, finance team and claims system in isolation, it connects every activity from First Notification of Loss (FNOL) to settlement and closure.
This deep-guide example uses a blended commercial claims operation handling motor own-damage claims under AUD 15,000, supported by a preferred-repairer network. The data is a worked improvement scenario designed to show how a Lean Six Sigma team can expose waiting, rework and approval delays.
Scope Selection: Map One Product Family End to End
The fundamental purpose of scope selection is to create a manageable value stream with a clear customer outcome.
Product family
- Motor own-damage claims under AUD 15,000
- Preferred-repairer network
- Start point: FNOL received
- End point: repair settled, payment completed and claim file closed
- Operating model: blended contact centre and assessing back office
- Workforce: 78 FTE
- Monthly volume: 4,300 new claims
- Working days per month: 21
The average arrival rate is:
[
4,300 \div 21 = 204.8
]
That is approximately 205 new claims per working day, or around 25.6 claims per hour across an eight-hour operating day.
At peak contact periods, the operation records 9.8% abandonment, giving an approximate take rate of 90.2%. This is not simply a service-level issue. Abandoned contacts can create repeat calls, duplicated case creation and additional pressure on the same downstream teams.
Customer requirements, or CTQs, include:
- Fast acknowledgement and clear next steps
- Accurate policy and excess confirmation
- Prompt assessor allocation
- A predictable repair start date
- Fair, accurate settlement
- Minimal repeated information requests
Current-State Value Stream: Where Time Is Actually Spent
To fully appreciate the opportunity, distinguish touch time from queue time. Touch time is the active work performed on a claim. Queue time is the period a claim waits between activities, often because of capacity, missing information, system boundaries or approval rules.
The current-state map shows 21.4 calendar days of end-to-end lead time, while total touch time is only 3.1 hours. Converted into days, 3.1 hours is approximately 0.13 days.
[
\text{Flow efficiency} = \frac{0.13}{21.4} \times 100 = 0.6%
]
Therefore, current flow efficiency is under 1%.
Worked current-state process map
| Process step | Touch time | Queue time | Rework rate | Handoffs |
|---|---|---|---|---|
| FNOL intake call | 0.35 hr | 0.10 days | 4% | 1 |
| Policy validation and excess confirmation | 0.20 hr | 0.40 days | 11% | 1 |
| Triage and complexity coding | 0.15 hr | 0.20 days | 6% | 1 |
| Assessor allocation | 0.10 hr | 3.20 days | 8% | 2 |
| Photos and quote review | 0.55 hr | 1.30 days | 9% | 2 |
| Repairer booking | 0.20 hr | 0.90 days | 7% | 1 |
| Parts ordering | 0.10 hr | 2.60 days | 8% | 1 |
| Repair authorisation | 0.25 hr | 2.10 days | 10% | 2 |
| Repair completion | 0.45 hr | 6.87 days | 12% | 1 |
| Invoice reconciliation | 0.20 hr | 0.80 days | 8% | 1 |
| Settlement and payment | 0.25 hr | 1.10 days | 5% | 1 |
| Customer follow-up and closure | 0.30 hr | 1.70 days | 4% | 1 |
| Total | 3.10 hr | 21.27 days | – | 14 |
Several facts stand out:
- 24% of claims are re-queued for missing information.
- Assessor allocation creates an average 3.2-day lag.
- Parts waiting contributes 2.6 days.
- Policy validation has an 11% first-time-right failure rate.
- Excess waivers and incorrect betterment create 6.4% leakage.
- Peak call abandonment reaches 9.8%.
- Fourteen handoffs increase the likelihood of duplicate entry, unclear ownership and delayed escalation.
The repair completion stage has the largest queue, but the assessor allocation and repair authorisation steps are important upstream constraints. If the estimate, photos or coverage decision arrives late, the repairer cannot reliably schedule work or order parts.
The Eight DOWNTIME Wastes in Claims Processing
VSM should translate observations into specific waste categories. In this operation, the eight DOWNTIME wastes appear as follows:
- Defects: Incorrect policy details, incomplete FNOL records, wrong excess treatment and quote errors.
- Overproduction: Duplicate notes, repeated claim summaries and status updates that do not change the customer outcome.
- Waiting: Assessor allocation, parts availability, authority decisions and customer responses.
- Non-utilised talent: Skilled assessors spending time chasing documents or performing avoidable data entry.
- Transportation: Moving information between email, claims platforms, repairer portals and spreadsheets.
- Inventory: Work in process represented by open claims, unreviewed photos, pending quotes and unactioned supplements.
- Motion: Searching across systems, switching queues and locating attachments or approval history.
- Extra-processing: Re-keying data, duplicated validation and multiple approvals for low-value, standard repairs.
Approval is a necessary governance mechanism, but a uniform approval rule creates a bottleneck. A AUD 2,000 standard repair should not follow the same authority path as an unusual or high-risk claim.
Future-State Build: Establish Pull, Flow and Clear Authority
The future-state map should reduce waiting without weakening claim quality or financial control.
1. Capture complete information at FNOL
Introduce a mandatory FNOL script with guided prompts for:
- Policy and vehicle identification
- Incident date, location and damage description
- Excess confirmation
- Customer contact preferences
- Immediate photo or video capture
- Preferred-repairer consent
The aim is to reduce the 24% missing-information re-queue rate at the source.
2. Create one-piece triage
Instead of allowing claims to accumulate in a general queue, triage each claim once and route it immediately into one of three pathways:
- Straight-through: Simple, low-value, complete-information claims
- Standard repair: Preferred-repairer claims requiring quote and assessor review
- Complex exception: Coverage uncertainty, unusual damage or higher financial risk
This creates a pull-based flow and prevents simple claims from waiting behind complex cases.
3. Use straight-through validation
For claims meeting defined rules, automatically validate:
- Active policy status
- Vehicle and policy match
- Excess amount
- Repairer eligibility
- Estimated claim value
Exceptions should be reviewed by specialists. Standard cases should not wait for manual confirmation when the data already satisfies the control rules.
4. Smooth capacity across shifts
Use the daily arrival pattern and work-in-process levels to distribute assessor and back-office capacity. A visual workload view should show:
- New claims received
- Claims awaiting allocation
- Claims aged over 5, 10 and 15 days
- Available assessor capacity
- Repair authorisations due today
5. Introduce a tiered authority matrix
Set approval thresholds based on value, risk and complexity. For example:
- Standard network repair under AUD 3,000: delegated authority
- AUD 3,000–10,000: experienced claims specialist
- Above AUD 10,000 or outside standard rules: senior approval
This preserves governance while reducing unnecessary escalation.
6. Integrate repairer booking and parts signals
A repairer integration should transfer approved scope, photos, estimate and customer details without re-keying. Parts status should be visible before a repair date is promised, reducing avoidable rescheduling.
7. Manage aged claims visually
A daily visual board should highlight claims aged over 15 days, assign a named owner and record the next action. The board is not merely a reporting tool; it is an escalation mechanism that makes blocked flow visible.
Current Versus Future-State Targets
The following targets are appropriate for a controlled pilot. They should be validated through a Measure and Analyse phase using actual claim timestamps.
| Metric | Current state | Future-state target |
|---|---|---|
| End-to-end lead time | 21.4 days | 7.2 days |
| Total touch time | 3.1 hours | 2.4 hours |
| Handoffs | 14 | 6 |
| Peak abandonment | 9.8% | 4.0% |
| Claims re-queued for missing information | 24% | 8% |
| Policy validation first-time-right | 89% | 97% |
| FNOL to repair authorisation | 10.9 days | 1.0 day |
| Leakage from excess waivers and betterment | 6.4% | 1.5% |
| Customer NPS | +8 | +35 |
| Cost per claim | AUD 186 | AUD 132 |
The major improvement does not come from making every activity faster. It comes from removing avoidable queues, reducing handoffs and preventing incomplete work from entering the value stream.
90-Day Kaizen Sequence
A disciplined sequence prevents the operation from launching disconnected improvements.
Days 1–30: Stabilise and create visibility
Owners: Claims Operations Manager, Contact Centre Manager, Lean Six Sigma project lead
- Confirm baseline definitions and timestamp quality.
- Introduce standard work for FNOL and policy validation.
- Launch the mandatory FNOL script with photo capture.
- Start one-piece triage on one pilot shift.
- Create a daily visual board for claims aged over 15 days.
- Review performance every day for 15 minutes and every week for 45 minutes.
Days 31–60: Improve flow and decision speed
Owners: Head of Claims, Workforce Planning Lead, Authority Governance Lead
- Expand one-piece triage across all shifts.
- Smooth capacity using arrival patterns and queue levels.
- Pilot straight-through validation for simple claims.
- Implement the tiered authority matrix.
- Measure first-time-right performance and leakage weekly.
- Hold a structured weekly kaizen review using Pareto analysis and control charts.
Days 61–90: Connect the network and control the gains
Owners: Repair Network Manager, Technology Product Owner, Finance Controls Lead
- Integrate repairer booking and parts-status information.
- Remove duplicate data entry between claims and repairer systems.
- Establish weekly review of aged claims, authorisation time and repair delays.
- Confirm process ownership and escalation rules.
- Publish standard work and audit adherence.
- Complete a 90-day benefits review against lead time, NPS and cost per claim.
Build Capability Through Lean Six Sigma Certification
A motor claims VSM is most effective when the team can connect customer requirements, process data, waste analysis and control methods. White Belts can support awareness and data collection. Yellow Belts can participate in kaizen events and maintain standard work. Green Belts can lead the DMAIC project, analyse variation and validate benefits. Black Belts can guide complex cross-functional change and mentor improvement teams.
For a practical pathway, explore Lean Six Sigma online training, review the Lean Six Sigma course options, or use the Lean Six Sigma glossary to strengthen your working knowledge.
Enrol in a Lean Six Sigma certification course today and learn how to turn claims-process data into faster flow, stronger governance and measurable customer value.
Kaizen. Kai-Care. Kai-Done. ( Lean Six Sigma)
