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Introduction
Company Background: Manzana Insurance was founded in 1902 in California and specialized in orchard and farm insurance then. But, a series of acquisitions followed the San Francisco earthquake and by 1953, Manzana was the second largest property insurer in California.
In the 1970s, it faced intense competition from Golden Gate Casualty, a new entrant in the home insurance business. Golden Gate could spend on intensive marketing and spark off price war due to the backing of its corporate parent, one of the largest retailers in the world. The high interest rates during this period also adversely affected Manzana's property insurance business. Hence, Manzana started venturing into other business areas and began insuring liability too. From almost no liability policies in the mid 60s, it went to almost a 50-50 split between liability and property insurance in the 1980s and now, 65% is property while 20% is liability insurance. But unfortunately due to the insurance crisis of the 1980s, settlement claims on liabilities rose and the company posted its first annual loss in 1985. It was subsequently taken over by Banque du Soleil in1989. Manzana, under the new management adopted a back to basics strategy and concentrated on regaining its market share in the property insurance business. Less profitable lines of business were discontinued and the operations at the branch offices were geographically re organized in order to improve the market responsiveness.
Organization: The Company operates through a network of semi-autonomous branch offices. It treats each branch as a profit center and a territory is assigned to each branch. Manzana does not deal directly with the customer, but has a ...