Insurance companies start with a functional structure, then move to a divisional structure. They can choose between a centralized or decentralized version, with the latter increasing response times and potentially leading to more business.
The organizational structure of an insurance company generally depends on the size, age and specialty of the company. More often than not, it will start with a functional structure where workers are organized vertically based on what they do. From there, the company will often move into a divisional structure, where individual teams will manage specific concerns. Large insurance companies that expand into multiple offices can choose between a centralized and a decentralized version of their current structure. This determines the level of autonomy of the individual branches.
When most companies start out, they use a common organization chart. This breaks down to a leader, one or two managers, and a large group of workers. Insurance companies, however, even new ones, are too complex for that simple structure. Instead, they typically start with a functional structure.
In a functional organizational structure, a person’s job determines his or her position within the company. If the worker is a regulator, he is part of the adjustment group, an underwriter is part of the underwriter group and so on. This works very well for smaller offices where there are only a few people in a team. As the company begins to expand, the functional structure tends to isolate one group from another, and such division can have a negative impact on the company.
More often than not, the insurance company will switch to a divisional format. In this situation, teams are created with one representative for each major area of the organization. The team have specific cases they work on, where they are able to benefit from a wide range of knowledge and skills.
The divisional organization is the most common among insurance companies, but may undergo another change. In multiple or single offices, the company must decide how much responsibility each team or branch has. This is divided into two main types, centralized and decentralized.
A centralized facility uses a single office where everything is processed. A main office, often containing the most experienced workers, will review every decision made by the organization before it is approved. While this makes the company less likely to make a mistake, it slows down the entire process dramatically.
Decentralized structures are the exact opposite. This organizational change gives each team and office some leeway with respect to their own cases. This structure increases the possibility of error, but also increases team response times. This improvement often translates into happier customers and more business. Most companies use a hybrid model where teams can make some decisions themselves, while others have to go to the main office.
Protect your devices with Threat Protection by NordVPN
