Detecting financially troubled property-liability insurers

The financial failure of property-liability insurers results in unpaid claims amounting to approximately $25 millions annually. A more effective system must be developed to detect these troubled firms at an earlier date and reduce this cost to society. The current system employed by the National Association of Insurance Commissioners relies primarily on loss reserves and loss ratios. It appears that most failures result from dishonesty and the removal of assets from the company into the possession of management. This study presents a model which incorporates variables designed to detect this draining of assets and identify companies which show a high probability for failure. This model is tested on an independent sample and is successful in correctly classifying 88% of the firms three years prior to liquidation. This study differs from prior studies by using a new approach to selecting the variables for the model.     

Manage your human sigma

If sales and service organizations are to improve, they must learn to measure and manage the quality of the employee-customer encounter. Quality improvement methodologies such as Six Sigma are extremely useful in manufacturing contexts, but they're less useful when it comes to human interactions. To address this problem, the authors have developed a quality improvement approach they refer to as Human Sigma. It weaves together a consistent method for assessing the employee-customer encounter and a disciplined process for managing and improving it. There are several core principles for measuring and managing the employee-customer encounter: It's important not to think like an economist or an engineer when assessing interactions because emotions inform both sides' judgments and behavior. The employee-customer encounter must be measured and managed locally, because there are enormous variations in quality at the work-group and individual levels. And to improve the quality of the employee-customer interaction, organizations must conduct both short-term, transactional interventions and long-term, transformational ones. Employee engagement and customer engagement are intimately connected--and, taken together, they have an outsized effect on financial performance. They therefore need to be managed holistically. That is, the responsibility for measuring and monitoring the health of employee-customer relationships must reside within a single organizational structure, with an executive champion who has the authority to initiate and manage change. Nevertheless, the local manager remains the single most important factor in local group performance. A local manager whose work group shows suboptimal performance should be encouraged to conduct interventions, such as targeted training, performance reviews, action learning, and individual coaching.     

A critical examination of team-teaching of health care administration courses: student, faculty, and administration perspective

There are several teaching techniques adopted by faculty in order to provide information to students in the most effective manner. One of the relatively new teaching techniques is known as team-teaching. It has been observed that over the recent years this form of teaching has been gaining increasing interest and popularity among academicians. Nevertheless, there seems to be a great deal of confusion associated with team-teaching format. This paper attempts to clarify the various definitions and concerns that are associated with this form of teaching. The pros and cons of this form of teaching are discussed in detail.     

Separating uncertainty from heterogeneity in life cycle earnings

This paper develops and applies a method for decomposing crosssection variability of earnings into components that are forecastableat the time students decide to go to college (heterogeneity)and components that are unforecastable. About 60% of variabilityin returns to schooling is forecastable. This has importantimplications for using measured variability to price risk andpredict college attendance.     

Joining a Queue or Staying Out: Effects of Information Structure and Service Time on Arrival and Staying Out Decisions

We study a class of single-server queueing systems with a finite population size, FIFO queue discipline, and no balking or reneging. In contrast to the predominant assumptions of queueing theory of exogenously determined arrivals and steady state behavior, we investigate queueing systems with endogenously determined arrival times and focus on transient rather than steady state behavior. When arrival times are endogenous, the resulting interactive decision process is modeled as a non-cooperative n-person game with complete information. Assuming discrete strategy spaces, the mixed-strategy equilibrium solution for groups of n = 20 agents is computed using a Markov chain method. Using a 2 × 2 between-subject design (private vs. public information by short vs. long service time), arrival and staying out decisions are presented and compared to the equilibrium predictions. The results indicate that players generate replicable patterns of behavior that are accounted for remarkably well on the aggregate, but not individual, level by the mixed-strategy equilibrium solution unless congestion is unavoidable and information about group behavior is not provided.JEL Classification: C71, C92, D81