How Activity-based Costing benefited Sun Life Insurance?
Decreasing margins and increasing per unit costs pressured the management of Sun Life to reduce costs to maintain profitable operating results Sun Life Insurance is a Toronto based insurance company, providing individual and corporate life insurance, group retirement services and benefit management services. The companys Claims Division provides drug and dental claim management and claim adjudication to companies across Canada. The company faced increased competition and customer demand. Its profit margin decreased due to increased costs and decreased revenue per unit. Under these circumstances the company was forced to Reduce cost Reduce time taken to process claims Increase due diligence performed on claims After a quick review, the company realised that different centres were using different procedures and adapting different standards for the same process. The time taken and the resources utilised also varied across centres for the same process. The Strategy The company sought the s
Decreasing margins and increasing per unit costs pressured the management of Sun Life to reduce costs to maintain profitable operating results Sun Life Insurance is a Toronto based insurance company, providing individual and corporate life insurance, group retirement services and benefit management services. The companys Claims Division provides drug and dental claim management and claim adjudication to companies across Canada. The company faced increased competition and customer demand. Its profit margin decreased due to increased costs and decreased revenue per unit. Under these circumstances the company was forced to Reduce cost Reduce time taken to process claims Increase due diligence performed on claims After a quick review, the company realised that different centres were using different procedures and adapting different standards for the same process. The time taken and the resources utilised also varied across centres for the same process. The Strategy The company sought the s
