INFORMATION TECHNOLOGY IN INSURANCE

CHAPTER 01 INTRODUCTION

INFORMATION TECHNOLOGY IN INSURANCE

INTODUCTION TO INSURANCE
What is Insurance?
The business of insurance is related to the protection of the economic value of assets. Every asset has a value. The asset would have been created through the efforts of the owner, in the expectation that, either through the income generated there or from some other output, some of his needs would be met.

For Example:
1. In the case of a factory or a cow, the production is sold and income generated. 2. In the case of a Motorcar, it provides comfort and convenience in transportation.

There is normally expected life time for the asset during which time it is accepted to perform. The owner, aware of this, can so manage his affairs that by the end of that life time, a substitute is made available to
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INFORMATION TECHNOLOGY IN INSURANCE ensure that the value or income is not lost. However, if the asset gets lost earlier, being destroyed or made non-functional, through an accident or other unfortunate event, the owner and those deriving benefits therefore suffer. Insurance is a mechanism that helps to reduce such adverse consequences.

DEFINITION OF INSURANCE
It is a form of a contract or agreement under which one party agrees to pay in return of consideration an agreed amount of money to another party to make good loss, damage or injury due to some uncertain event in which the insured has interest. Insurance is a contract by which one party, for compensation called the premium assumes particular risk of the other party and promises to pay to him or his nominee a certain or ascertainable sum of money on a specified contingency.
-E.W. Patterson

CONCEPT OF INSURANCE
Insured, are you? The Functions of Insurance will give you an idea on how to go ahead with the approach of Insurance and what type of insurance to choose. In a laymans words, insurance means, a guard against pecuniary loss arising on the happening of an unforeseen event. In developing economies, the insurance sector still holds a lot of potential which can be tapped. Majority of the people in the developing countries

INFORMATION TECHNOLOGY IN INSURANCE remains unaware of the functions and benefits of the insurance and it is for this reason that the insurance sector is still to grow.

Introduction to IT
Overview
Now days Information Technology permeate virtually every aspect of modern business to the extent that its effective use can easily mean the difference between success and failure. The effective use of Information Technology is one of the biggest challenges facing most of the organization today. Understanding the role of information technology plays and how to make the best use of Information Technology systems is an essential requirement for any organization seeking competitive advantage.

What is IT?
IT stand for Information Technology and in its widest sense, refers to any technology controlled by a microprocessor (or a computer chip). For example: Microprocessor is used to control the delivery of essential services such as water, electricity and

telecommunication.

INFORMATION TECHNOLOGY IN INSURANCE

There is no organization that can afford to ignore the empowering technology of the modern world. Todays IT systems can help a business to be more responsive, efficient and flexible in the face of continuous and rapid change. Properly used Information Technology will allow every company to stream line its processes and focus on its core skills and abilities that differentiate if form its competitors in the market place failure to embrace the opportunities that are ace offered by Information Technology today is likely to result in business failure.

The developments in Information Technology (IT) are working wonders in all fields of activity. It has become possible to send and receive information almost instantaneously. If circulars do not reach the agents does not have details of new plans announced in the press, the agent may face awkward situations with the prospects. These problems can be totally avoided with the use of IT. Insurers traditionally, have been quick to adapt latest advances in technology. This is happening in the areas of IT as well. The extent of IT application will vary between insurers.

Using the power of modern Information Technology systems to the best advantage is a strategic skill that has become an essential requirement if an organization already of its competitors Information Technology fulfills many functions in an organization including automated process and systems management; but for manager the key role is as an enabling technology. Manager must select and use Information Technology systems to simplify business process and to acquire analyze and manage data on which their business depends.

INFORMATION TECHNOLOGY IN INSURANCE

CHAPTER 02 LITERATURE REVIEW

INFORMATION TECHNOLOGY IN INSURANCE

"This is a point of great change. I recommend you think both tactically and satirically about you can use technology," Harris said. "Make sure your technology is aligned with your business our come it will allow you better longevity of the projects, as well as provide greater business home Select vendor packages that meet business requirements and match enterprise architecture. We are seeing a great shift in insurer's
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INFORMATION TECHNOLOGY IN INSURANCE thinking about vendor packages. It is not necessary to build alliance solutions. Focus on enterprise agility and flexibility and understand the risks associated with technological maturity. Many technologies are not mature at this point, and there will be a risk in implementing these. Understand first mover advantage with emerging technologies."

A.T. Kearney

recently

completed

study

of

emerging

technologies to isolate opportunities for capturing strategic advantage. These trends in insurance are part of a broader landscape in which innovative technologies are significantly driving change across a wide range of functions and industries. Figure 1 highlights the main trends in five areas: consumer and employee experience (leading to innovation breakthroughs), applications and telecommunications (leading to growth and profits), and information management (leading to improved operations).

INFORMATION TECHNOLOGY IN INSURANCE

The study included interviews with more than 150 leading technology executives worldwide. The findings suggest that social networking, telematics and SOA are essential to growth and competitive advantage. The following discusses each in more detail, including how each technology could play a role in transforming the insurance industry.

CHAPTER 03
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INFORMATION TECHNOLOGY IN INSURANCE

FIELD STUDY

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INFORMATION TECHNOLOGY IN INSURANCE

Purpose & Need of Insurance

Assets are insured because they are likely to be destroyed or made non-functional, through an accidental occurrence. Such possible occurrences are called perils. Fire, floods, breakdowns, lightening, earthquakes, etc, are perils. The damage that the perils may cause the asset, is the risk that the asset is exposed to. The risk only means that there is a possibility of loss or damage. It may or may not happen. The mechanism of insurance is very simple. People who are exposed to the same risks come together and agree that, if any one of the members suffers a loss, the others will share the loss and make good to the person who lost. A human life is also an income generating asset. This asset also can be lost through unexpectedly early death or made non-functional through sickness and disabilities caused by accidents. Accidents may or may not happen. Death will happen, but the timing is

uncertain. If it happens around the income will normally cease, the person concerned could have made some other arrangements to meet the continuing needs. But if it happens much earlier when the alternate arrangements are not in place, insurance is necessary to help those dependent on the income.
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INFORMATION TECHNOLOGY IN INSURANCE In the case of a human being, he may have made arrangement for his needs after his retirement. These would have been made on the basis of some expectations like he may live for another 15 years, or that his children will look after him. If any of these expectations do not become true, the original arrangement would become inadequate and there could be difficulties. Living too long can be as much a problem as dying too young. These are risks which need to be safeguarded against. Insurance takes care of it. Insurance does not protect the asset. It does not prevent its loss due to peril. The peril cannot be avoided through insurance. The peril can sometime be avoided, through better safety and damage control management. Insurance only tires to reduce the impact of the risk on the owner of the asset and those who depend on that asset. It compensates, may not be fully, the losses. Only economic or financial losses can be compensated. The concept of insurance has been extended beyond the coverage of tangible assets. Exporters run the risk of the importers in the country defaulting as well as losses due to sudden changes in currency exchange rates, economic policies or political disturbances. These risks are now insured. Doctors run the risk of being charged with negligence and subsequent liability for damages. The amounts in question can be fairly large, beyond the capacity of individuals to bear. These are insured. Thus, insurance is extended to intangibles. In some countries, the voice of a singer ort the legs of a dancer may be insured, even though the advantage of spread may not be available in these cases.

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INFORMATION TECHNOLOGY IN INSURANCE There are certain basic principles which make it possible for insurance to remain popular which make it arrangement. The first is the fact that people are exposed to risks and that the consequences of such risks are difficult for any one individual to bear. It becomes bearable when the community shares the burden. The second is that no one person should be in a position to make the risk happen. In other words, none in the group should set fire to his assets and ask others to share the costs of damage. This would be taking unfair advantage of an arrangement put into place to protect people from the risks they are exposed to. The occurrence has to be random, accidental, and not the deliberate creation of the insured person.

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INFORMATION TECHNOLOGY IN INSURANCE

Functions of Insurance
The function of insurance is divided into two parts:
A. Primary Function B. Secondary Function

PRIMARY FUNCTION SECONDARY FUNCTION

A. Primary Functions i. Insurance provides certainty:

Insurance provides certainty of payment at the uncertainty of loss. There is different types uncertainty of risk. The risk will occur or not, when will occur how much loss will be there? Insurance removes all these uncertainty and the assured is given certainty of payment of loss. The insurer charge premium for providing the said certainty.

ii. Insurance provides protection:

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INFORMATION TECHNOLOGY IN INSURANCE The main function of the insurance is to provide protection against the probable chances of loss. The insurance guarantees the payment of loss and thus protects the assured from sufferings. The insurance cannot check the happening of risk but can provide the losses at the happening of the risk.

iii. Risk sharing:

Life and property of person are subject to a number of uncertain risks. Thus the loss that a few may suffer is spread over to a number of people who have insured against the same risk. The premium paid by a large number of persons are used to compensate the loss, that a few may suffer i.e. insurance company never takes the risks; it covers the risk and immediately spreads the risk among many insureds. Because the premiums for insurance are paid by large number of insureds whereas the loss is suffered by few insureds. premiums Thus from the the

collected

compensations are paid to the sufferers.

B. Secondary Function
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INFORMATION TECHNOLOGY IN INSURANCE

i. Prevention of Loss :
The insurance join hands with those in situations which are engaged in preventing the losses of the society because the reduction in loss caused lesser payments to the assured and so more saving is possible which will assist in reducing the premium. Lesser premium is reduced to, which will stimulate more business and more protection to the masses.

ii. Provides capital :

The insurance provides capital to the society. The accumulated fund are invested in productive channel, the dearth (Lack) of capital of the society is minimized to a greater extent with the help of investment of insurance.

iii. Improves efficiency:

The insurance eliminates worries and miseries of losses at death and destruction of property. The carefree person can devote his body and soul together for better achievement. It improves its efficiency.

iv. Economic Progress:

The insurance by protecting the society from huge losses of damage, destruction and death, provides an initiative to work hard for the betterment of the masses. The next factor of economic progress, the capital, is also immensely provided by the masses.

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INFORMATION TECHNOLOGY IN INSURANCE

Kinds of Insurance
The insurance can be classified into three categories from business point of view:
I. Life Insurance II. General Insurance III. Social Insurance

LIFE INSURANCE
GENERAL INSURANCE SOCIAL INSURANCE

I.

Life Insurance
Life Insurance is a contract or agreement by which Insurance Company agrees to pay in return premiums or lump sum premium, an agreed amount of money at the time of death or maturity of policy whichever is earlier. Life Insurance is the latest type of insurance and popular type of insurance. In India the business of Life Insurance is
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INFORMATION TECHNOLOGY IN INSURANCE conducted by Life Insurance Corporation of India, which is an example of statutory Company. This life insurance is based on two principles i.e. utmost good faith and insurable interest. Life Insurance contract is not a contract of Indemnity. It is a contract for the payment of a specific amount, as the value of human life cannot be measured in terms of money.

II.

General Insurance:
The General Insurance includes property insurance, liability insurance and other forms of insurance. Fire and Marine insurance are property insurance. Motor, theft, fidelity and machine insurances include the extent of liability insurance to a certain extent. The strictest form of liability insurance is fidelity insurance, whereby the insurer compensates the loss to the insured when he is under the liability of payment to the third party.

III.

Social Insurance:
The social insurance is to provide protection to the weaker section of the society who is unable to pay the premium adequate insurance. Pension plans, disability benefit, unemployment benefit,
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INFORMATION TECHNOLOGY IN INSURANCE sickness insurance and industrial insurance are the various forms of social insurance. With the increase of socialistic ideas, the social insurance is the obligatory duty of the nation. The government of the country must provide social insurance to its masses.

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INFORMATION TECHNOLOGY IN INSURANCE

EVOLUTION OF INFORMATION TECHNOLOGY

Information technology (IT) is a term that encompasses all forms of technology used to create, store, exchange, and use information in its various forms (business data, voice It is a

conversations, still

images, motion pictures etc .)

convenient term for including both telephony and computer technology in the same word. The technology is driving what has often been called the information revolution". Information is a stimulus that has meaning in some context for its receiver. When information is entered and stored in a computer, it is generally referred to as data. After processing, i.e. compacting, editing,

deleting, merging, etc., the output data can again be perceived as information. When information is packaged or utilized for understanding, it is known as knowledge.

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INFORMATION TECHNOLOGY IN INSURANCE Information Technology is a business tool that can radically improve the way business is managed. If systems are to deliver real benefits, then they must be:

1. Transparent to the user:

Users need not know how systems work; the requirement is simply that the systems perform as and when needed.

2. Fast and Easy to use:

Users should find the systems simple to use and must be able to complete the tasks without having to wait any significance time for the system to respond.
3. Flexible:

Changing needs require systems that are capable of being adapted quickly. Changes with the technology sector of the insurance industry are occurring with unique speed, traveling beyond and impacting companies more fully than ever expected. Business drivers are leading insurers to look for technologies and business processes that are significantly different from anything they have used before. Driving forces such as market globalization, merger and acquisition activity, and the critical need to adopt market segmentation strategies are forcing companies to move to the information age at a unique speed. Those unwilling to make the move risk being left behind with unsatisfactory business levels, declining profits and ultimately, the inability to survive.

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INFORMATION TECHNOLOGY IN INSURANCE On Account of various reasons, the insurance industry in India has not kept pace with the rapid development in technology. It is only in recent years that an attempt is being made to become technology-wise. The revolution in communications and Information Technology is promising to change the way business is done. These innovations are promising to make things transparent, quicker and accessible. From their controlling offices located thousands of miles away a company such asM/s Hindustan Lever Limited (HUL) which has become Hindustan Unilever Limited (HLL) claims it knows the stock movement at remote depots a minute-to-minute basis.

Other Examples:
A patient undergoing tests in the U.S in the evening finds his reports processed and ready in the morning. A lawyer dictates his notes in his recorder late in the night. The next morning neatly typed out notes is available in his computer. The processing work has been done in a distant country like India. In Insurance also, Technology will play a vital role. Any player in the market will have to be technology know-how, to be competitive and to enable the organization to survive. It should be possible for a proposal in Guwahati to be evaluated in Mumbai and acceptance confirmed immediately. All these new technologies promise to reduce operational costs significantly.
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INFORMATION TECHNOLOGY IN INSURANCE

The Earlier Business Model

In the pre-computer days, agencies, handled almost all customer service. Though manual, this system was efficient in the there was no duplication of processes by agencies and insurers. The insurers main role was to provide financial backing and keep statistical information. The advent of computers in the 1960s allowed insurers to change their business model. As mainframes became entrenched, more functions flowed back to home office. Agencies did less, and big bureaucracies in both home and branch offices became necessary to run the companys business. Built around centralized control and a large bureaucracy at the home office, the old business model customarily relies on a mainframe or other large computer system. This technology foundation offers centralized processing power and huge data storage capacity. However, under this model, customer support for billing, claims, and policy servicing are often split between the agent and the company, and the often handled by different company departments. Customers with multiple concerns are bounced from agents to company and from department to department, introducing many opportunities to commit errors. That often results in a dissatisfied customer and high service costs that are difficult to manage. In this environment, a cadre of highly trained and expensive programmers is needed to maintain the mainframe or large computer
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INFORMATION TECHNOLOGY IN INSURANCE system. Users, such as marketing staff and underwriters, must make a written request to the information systems (IS) department, which then puts the request in its queue. The order may take weeks, months, or years to fulfill. The first attempt is often sent back for fine-tuning because of communication gaps between the business unit and the IS department and time lags need definition and programmed resolution.

Today, the mainframe or other large computer system is still an industry workhorse. But insurers are recognizing that it is a millstone because the environment is so inflexible. Changing business process is time-consuming and requires expensive programming and even then the results may not be optimal. The enormous cost and anxiety spurred by year 2000 compliance issues provides an extreme example. Thats why many insurers are no longer putting new lines of business on their mainframes, turning instead to client/server systems that offer a superior, user-friendly development environment centered on fulfillment at the point of sale.
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INFORMATION TECHNOLOGY IN INSURANCE

Application of Information Technology (IT) in Insurance (The New Business Model)

There has a revolution in the way insurance companies do business. The new emerging business model depends heavily on information technology. What is this new business model? Primarily, it is customeroriented. That is, all processes are designed to satisfy customer needs, rather than the companys needs. The new model is also decentralized; with more responsibility and power given to the people who are on the front lines with the customers-whether they are independent agents, brokers, captive agents, or company employees. Giving these people the automated tools they need to handle all customer requests, often in a single session, lets insurers satisfy customer needs faster and better. As result, the new business model is flexible, responsive and cost-efficient. Many established companies, especially those with a keen eye on the strategic advantages of leading- edged automation, having already adopted the new technology-driven business model either

comprehensively or in specific niches, such as a specially line or a residual market. And forward- thinking start-ups are now running their

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INFORMATION TECHNOLOGY IN INSURANCE entire company on the new business model and powering with a network of personal computers.

Information Technology Applications in Functional Areas

Even though the information technology has wide application in all the spheres of the insurance, yet following are the most important ones in respective functional areas:

Marketing:
The scope for use of information Technology in marketing function is tremendous. It may start from the consumer accquitance to an insurance product to claims settlement or further selling of new products or developing consumers for the products. Information technology can be integrated with almost all the Ps of marketing. It may help in formulation and implementation of various marketing strategies including pricing, promotion and customization strategies. Some of these areas are discussed below.

1) Customer Awareness:
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INFORMATION TECHNOLOGY IN INSURANCE The use of information technology may be path breaking for the insurance companies since conventionally the awareness of the insurance products in India is low. With the use of internet the information about the products and pricing policies can be made available to the public in few seconds and much transparency in operations can be established. There are numerous websites available which can help the prospective customers to compare the insurance products of various issuers and decide the product suited to his needs. Also, the information about the new products changes in the existing ones and of course, the information on various discounts and incentives can be provided at a much faster rate and lower cost. 2) Customer Services: The insurance being a service needs high concerns in terms of services. Customer service requires maximum attention and should span the entir gamut of activities in the purchase of a product i.e. right from the dissemination of information, documentation to policy administration and claim settlement. The service quality standards of the new private insurance players have posed a threat to the then giants viz. the LIC and GIC. The investments in the personnel and knowledge systems have helped private players companies build significant domain expertise. The emerging areas of IT applications are: a) Market Research b) Consumers Targeting and Segmentation c) Customizations of Product

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INFORMATION TECHNOLOGY IN INSURANCE d) Easy Procedures like premium payments, claims settlements, tracking of brokers and agents e) Complaints management/ grievance handling f) Intermediary analysis.

3) Finance:
Information technology can be effectively used for internal management viz. Accounting, treasury management, financial performance reporting etc. and as well as in resource mobilization, portfolio management, investment planning etc.

4) Human Resource Management:

Application of IT in human resource management is obvious. It can be effectively utilized in a) Recruitment and selection, b) Training, c) Performance appraisal, d) Promotions, transfers and dismissals, e) Valuations etc

5) Research and Development:

R & D has been made an easy task with increasing use of IT. Surveys and research on market potential, analysis of markets, tracking with international norms and developments are the profound areas of It applications.

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INFORMATION TECHNOLOGY IN INSURANCE

INFORMATION TECHNOLOGY IN THE INSURANCE SECTOR

Information Technology plays a vital role in efficient operations of insurance carriers. Obtaining accurate information as quickly and efficiently as possible remains an integral component to the framework of the insurance sector. Unfortunately, the dynamically changing corporate landscape, situated alongside progressively expanding legislation, results in the need for consistently improving information technology.

1. Client Data
Insurance carriers maintain accurate and updated client data records. Information Technology must be both secure and comprehensive enough to store multiple names, addresses, telephone numbers, email addresses and other pertinent details.

2. Policy Details
For those insurance companies providing policies across multiple lines of insurance, information technology requirements become even more complex. Details of each insurance policy, ranging from life, home, auto, boat, liability and business products, need to be accurately recorded and merged with client data.

3. Claims Management
Investigating, paying and recording claims data is crucial to any insurance companys financial stability. Information technology plays a vital role in allowing carriers to record claims details and share data with police, other carriers, attorneys and beneficiaries. Advanced computer software ensures important information remains accessible and updated.

4. Beneficiaries
Life insurance companies utilize database technology to record policy owners beneficiary designations. Aside from the personal details of the

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INFORMATION TECHNOLOGY IN INSURANCE insured individuals, beneficiary names, addresses, telephone numbers and death benefit portions are of monumental importance.

5. Payment Information
Perhaps the most essential area requiring accurate and efficient information technology is an insurance companys client payment details. Above all else, billing and invoicing systems generate the necessary revenue to keep the company in business. Cash flow remains vital to daily operations and without superior information and processing systems, the carriers financial stability is at risk.

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INFORMATION TECHNOLOGY IN INSURANCE

The Role of IT in Insurance

American insurance companies are rapidly becoming technology-driven organizations, replacing millions of paper files with databases of information. Where once the industry lagged behind other, more progressive sectors of the economy, insurers are now at the forefront of technological innovation, targeting several key areas.

Actuarial Analysis
Insurers base their rates on actuarial models that seek to determine what risks are more or less likely to experience a loss. Insurance companies are using technology to analyze years of claims and policyholder data searching for correlations between risk characteristics and claims. Technology has allowed actuaries to analyze risk at a much more precise level of granularity.

Policy Administration
Most insurance policies are still printed and delivered to policyholders by mail each year. The process of creating these documents used to be accomplished by armies of clerks, technicians and typists. In most cases, this repetitive task has been completely re-imagined using technology. Customer data is maintained in massive databases, where it is accessed by computer systems that automate the renewal of each policy. Policies are assembled using complex software packages and printed using advanced high-speed printers.

Automated Underwriting and Rating

Every insurance policy undergoes an underwriting process that determines if the insurance company is willing to provide insurance. If the risk is acceptable, it is then rated, to determine the price the company will charge. Once the purview of highly trained underwriters and rating technicians, this process is now automated, with only the most unusual risks requiring personal attention.

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INFORMATION TECHNOLOGY IN INSURANCE

The Need for Information Technology

The rapid innovation in the field of information and communications technology has posed serious challenges for the insurance industry in India. The use and applications of Information Technology in wide variety of Insurers operations has now become strategic in the sense that it has direct impact on the productivity of resources, and a sweepening impact on reducing the cost of various activities. With the arrival of private insurance players, the competition has become more intense and an important role is being played by the insurance sector. Even though the use of information technology is not new to the insurance sector, yet we may find tight compartmentalization regarding the use of information technology in various departments of the insurance companies including the major players since last years. The most visible of these departments are accounting, policy issue and servicing, claim processing sales management etc. The innovation in information technology can be effectively utilized in the following areas

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INFORMATION TECHNOLOGY IN INSURANCE

Speedy and correct issuance of documents. Expenditure disposal of claims Proper building of accounts and statistics

Quality Assurance & Efficiency

Therefore the imperative for all the insurers, especially LIC and GIC is to build up an efficient interface between the various departments and segments. This would reduce the paper work, improve efficiency of service delivery and provide competitive advantage to the insurance companies.

INSURANCE AND ELECTRONIC COMMERCE- E-INSURANCE

On a global basis, there is mad rush of companies willing to enable their business. E- Insurance ispo-facto, not aloof, is one of the growth areas in India. Enormous opportunities are being created by the Internets new connectivity such as improving customers service, reducing cycle time, becoming more cost effective, and selling goods, services or information to an expanded global customer base. As entire industries are being reshaped and rules for competition are changing, enterprises need to rethink the strategic fundamentals of their business in order to be successful. Globally, insurance on the net has lagged behind other financial service products such as banking and brokerage. Of the total online users only 5% used insurance service online.

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INFORMATION TECHNOLOGY IN INSURANCE This lag was due to lack of relevant and adequate content. Traditional insurers, while leveraging on new information technologies, have been slow to utilize the internet as an alternative distribution channel. Generally the largest insurers have been focused on static marketing presence online, encompassing product information, FAQs and quotes. Only a few insurers have added the ability to submit applications online. This lack of participation in the e-business revolution is seen across lines. The insurance companies attribute two factors for the slow take off. First and foremost, insurance is a product that is sold and not bought. The internet is perceived to be a buyers medium, with online customers able to search quickly and for the most competitive prices and variety of products. Insurance is one product, which involves personalized selling. The process of insurance sales requires a series of face-to face interactions.

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INFORMATION TECHNOLOGY IN INSURANCE

International Trends
The convergence effect of IT is being felt by the insurance industry as well in developed countries. In the US, personal savings are almost evenly distributed between banking, insurance, mutual fund and other financial institutions. The insurance industry is expected to lose market share to banking and other financial institutions. Customers today expect enhance levels of service due to increased competition. This customer demand is likely to result in non-traditional access to specific information. The global online insurance market is expected to achieve and exponential growth in the near future. In the life insurance segment alone, the total online business will grow to $21 billion by 2003. Premium income from the non-life policies will go up to $18 billion in the next three years. The Gartner Group in a study conducted by them says that in a year 25% of all customer contacts and enquiries for enterprises will come via the internet, e-mail and online forms. Bancassurance customer service, which has been almost exclusively done via the telephone (96% of all transactions), will become increasingly email based in the next four years; decreasing telephone related service by 28%.

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INFORMATION TECHNOLOGY IN INSURANCE In response to these trends in customer preference, insurers are mobilizing their online sales and customer account management capabilities. This move towards building Internet based business solutions benefits the insured by providing greater flexibility, greater customization of information and improved customer service for the insurance company, this drastically reduces the costs involved.

Life Insurers on the web

Insurance Companies: IRDA has so far granted registration to 12 private life insurance companies and 9 general insurance companies. If the existing public sector insurance companies are included, there are currently 13 insurance companies in the life side and 13 companies operating in general insurance business. General Insurance

corporations have been approved as the Indian reinsurer underwriting reinsurance business. for only

Insurers

Website

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INFORMATION TECHNOLOGY IN INSURANCE

LIC of India Om Kotak Mahindra Max New York Life Birla Sun Life ING Vysya Life HDFC Standard Life ICICI Prudential Life

www.licindia.com www.omkotakmahindra.com www.msxnewyorklife.com www.birlasunlife.com www.ingysyalife.com www.hdfcinsurance.com www.iciciprulife.com

E-Insurance in India
The intriguing question before all associated with the insurance industry is that will it be possible for private companies or even public sector monoliths to sell the insurance online in India in the near future? Insurance companies will probably have to wait for internet penetration to increase and the still ambiguous E-commerce rules to take concrete form. However, what is not debatable is that new private entrants will change the rules of the game for the Indian insurance business, both in the life and the non- life segment, unfolding opportunities for software engineers and professional agents.

To peep into the possibilities and opportunities emerging out of the integration of insurance and information technology, various

organizations have organized seminars and conferences in the recent past to explore the possibilities of selling insurance on the Net and gauge the opportunities for the growing Indian software industry.
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INFORMATION TECHNOLOGY IN INSURANCE According to T. Ramanan of Assocham, life insurers were among the first to go online with informative content and features like actuarial calculators. However, according to him, they have been relatively slow to embrace online commerce, which currently makes up about 1% of the total term life market. Only 12% of insurers companies globally sell policies online. Experts expect the percentage of term life sold over the internet to increase from 1% to 15% by 2003, which in monetary terms works out to $21 billion. Although traditionally term life insurance has been sold through independent agents, the big shift will become manifest sooner than later. And more importantly Indians cannot watch from the sidelines as this paradigm shift in the insurance sector takes place. In the non-life sector, automobile policies are popular aver the internet. Premium income, points out the paper, is expected to rise to $ 18 billion form about $1 billion currently. The growth of global online insurance business augurs well for the Indian IT sector. The exponential growth in the online insurance business will unfold significant business opportunities for software companies / consultants. The opportunities that rise out of this will be both global and local, because new entrants will have to either fine tune or prepare customized packages for the Indian market. Online insurance will also companies reduce costs and keep premiums low, a pre-requisite in a price sensitive market like India. The government, however, will have to address problems relating to bandwidth on an urgent basis to make online insurance a reality in India. Other major challenges to face Indian insurers will be to design and develop strategies for delivering services to well segmented customers. The third challenge lies in developing the right combination of customer segments and applicable distribution channel strategies.
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INFORMATION TECHNOLOGY IN INSURANCE Most web sites offer contact numbers of their branch officers where we can get further details of the products on offer. The agent locator feature, available on maxnewyorklife.com, iciciprulife.com and on

bimaonline.com help one locate an insurance agent most accessible to you based on a search facility. One would expect downloadable proposal forms on insurance websites, but these are missing in most cases. Only licindia.com seems to offer downloadable proposal and claim forms for a few of the schemes.

Benefits of Electronic Insurance: E- Insurance provides multiple benefits to the insurer and the existing and prospective insureds:

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INFORMATION TECHNOLOGY IN INSURANCE Information collected is better and cheaper. Speed of response Issuance of policy and settlement of claims is faster Provides new ways of doing business in competitive market. Flexible pricing and customized services. Global accessibility i.e. lapse of physical boundaries Increased sales without additional sales force Immediate premium collection and funds transfer Reduced cost per transaction. 24*7 availability i.e. round the clock availability of information Real time knowledge base building. Improved service

The features offered by most of the Indian insurers websites are:

1) Basic details of the various products classified by typeendowment, whole life, money back policies etc...

2) A primer on insurance basics explaining the need for insurance, glossary of insurance terms, FAQs etc...

3) Downloadable forms (not offered by all), online customers help lines, tax and premiums and bonus calculators.

4) Sections on the various tax benefits of insurance products on offer.

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INFORMATION TECHNOLOGY IN INSURANCE 5) A contact mechanism whereby you can get in touch with their nearest branch office or marketing personnel.

6) Customers can also compute the premium for various policies in a matter of seconds, using premium calculators

7) These sites also serve as a virtual community for insurance professionals with features such as the latest insurance news, career opportunities, insurance education, message board for discussions and events in insurance sector.

Major factors Affecting E- Insurance Growth of net:

It is estimated that India would have about 150 million net users by 2010. These figures represent a huge buying potential.

Competition Pressures :
Insurance companies because of competitive pressure would be driven into internet rather than a clear ROI justification.

Customers:
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INFORMATION TECHNOLOGY IN INSURANCE The availability of net-based services will be a huge factor for customer retention.

Cross sells:
When linked with other financial products, a portfolio approach to investment, savings and risk coverage will increase cross sells and customer loyalty and retention. Costs : In the beginning E- insurance will be a cost factor rather than a profit drive, but in the long run it will be a cost reducing factor.

E-Insurance Business Challenges

Electronic insurance will not only provide many benefits but will also pose business and technological changes.

Business Challenges
The following points have been detailed in a study on insurance and E-commerce done by Grace,Klien and Straub of the centre for risk Management and Insurance Research, Georgia State University.

i. Disintermediation Increases business :

Study has shown that the cost of distribution decreases with the increased value of connection. Products with relatively
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INFORMATION TECHNOLOGY IN INSURANCE high fixed costs and low value such as travel, credit or burial insurance are relatively expensive to produce. Customers pay a high price per dollar of coverage for these products. The internet allows the disintermediation of this relatively high overhead for these low face value products. This means that prices can be lowered and more insurance can be sold by reducing the transaction costs of the exchange.

ii. Reorganization companies :

of

companies-virtual

Many insurers will be prompted by the opportunities presented by E-commerce to restructure the packaging of insurance services. Insurance companies using E-commerce may re-engineer, outsource, and/or streamline their management functions, or marketing and distribution arms. To more efficiently deliver these services, some insurers will be able to reduce their significant investments in physical facilities and certain personnel. Ecommerce will enable independent agency insurers to more easily adapt their distribution mechanism to market competition and expedite their transactions with intermediaries.

iii. Insurance customers what do they want?

Customers could get better and different service through the internet. It is possible to obtain quotes from a number of companies. In some cases, the internet provides rating agencies evaluation of insurers. The internet and outsourcing can provide
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INFORMATION TECHNOLOGY IN INSURANCE additional cost savings to the consumer. Technology can bring the customer closer to the insurance contract, by removing layers of inefficiencies. Consumers will also obtain price comparisons for relatively generic contracts, such as life insurance and rates for a standard set of auto insurance coverage for given vehicle and driver characteristics.

iv. The Death of Insurance Agent?

One of the reasons why insurers have been slow to use electronic commerce could be the fear of swallowing up the agents business. The internet does not necessarily imply the death of the agent. Many insurers are examining their agents role in the process and are also developing direct contacts with the insured through their web presence. Agents could enhance their advisory role to consumers as their paper and money processing functions diminish.

Technological challenges
One of the most prominent challenges of E-commerce is security. It is very evidence that many users are reluctant to do business on the internet due to security reasons. Issues of

transmission

security,

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INFORMATION TECHNOLOGY IN INSURANCE host server security confidentiality, authenticity and ways to counter these challenges are covered in the following topics.

Security: a. Database Security:

The business database security is utmost important. This has to be monitored by security of the web server and web access.

b. Web Server Security :

Security policies should be defined like who is allowed access, nature of the access and who authorities such access? Who is responsible for security? What kinds of material are allowed on server pages?

c. Password sniffing :
Protection against password sniffing is to avoid using plain text usernames and reusable passwords.

d. Network Scanning Programmes:

Automated tools should be used to scan your network. These tools check for well-known security related bugs in network programs such as send mail and FTPD. Computers are certainly being scanned by crackers interested breaking into the

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INFORMATION TECHNOLOGY IN INSURANCE systems; therefore network scanning program should be regularly run.

e. Physical Security:
One can ensure physical security by having an alarm system that calls the police, having a key-lock on the computer power supply. There should be adequate protection against fire smoke, explosions, humidity and dust.

f. Web access Security:

Host based restrictions can be implemented using a firewall to block incoming HTTP connections to a particular web server.

g. Transmission Security :
Encryption is a key technology to ensure transaction security.

h. Privacy :
Privacy is likely to be growing concern as internet- based communications and commerce increase. Designers and operators of web sites who disregard the privacy of users do so at their own peril.

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INFORMATION TECHNOLOGY IN INSURANCE

ASSESSMENT OF PRIORITY
The assessment of priority for E-Learning for each people business segment has been done based on the needs. As per the assessment matrix, the most of the people segment, there is potentially a high need to adopt E-Learning across business segments.

Business Benefits of E-Learning

Some of the business benefits of e, learning across people segments: Agents Reduced lead time to market new products; Learn and earn without losing customer, facing time;

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INFORMATION TECHNOLOGY IN INSURANCE Continuing education credits at the own pace helping the career path; Update on regulatory changes or competitor information on the fly, giving the marketing edge; Ideal method to overcome inability and aversion to classroom sessions_

Employees
Employees have to be up to date with any changes in products and processes to provide efficient post sales service. High level of motivation leading to good service and high customer retention; High level of accuracy in work due to constant upgradation of skills and knowledge; Consistency in work across the organization; Saving on lost revenue Productivity when people are away from workplace.

Customers
E-Learning is the most feasible and practical method to educate the customer, providing tangible and intangible benefits. Educated customer is open to technological innovations and receptive to online tools that reduce customer service costs; Reduce incidence of losses and claims; Increase knowledge and awareness about products and quicker and more efficient decision-making.
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INFORMATION TECHNOLOGY IN INSURANCE AIG Consultants (AlGC), a subsidiary of AIG, offers online training to commercial and industrial insurance customers. Clients have access to online risk abatement training for their employees. Training focuses on health, safety and environmental risks, thus reducing workplace liability.

Business Associates
Business associates need constant training to be on the same page with the companies and it is not feasible to get them in a classroom. Better, intervene with customers; No tag between the company and the fronting partner; Multiple sessions on business and systems at minimal cost.

Faster Claims Settlement

Symbility Solutions is creating a different kind of insurance settlement experience with a team that is passionate about providing superior tools to analyze, adjust, estimate and settle claims. Our customers' claims settlement process is faster because our cloud-based technology platform is bringing the insurance industry closer together driving accuracy and efficiency. Our centralized communications hub, data warehouse, analytics engine and processing application - Symbility Claims Connect, allows multiple people to work on claims in real-time. Even in challenging offline conditions, accurate and detailed estimates can be generated quickly and remotely using Symbility Mobile Claims.

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INFORMATION TECHNOLOGY IN INSURANCE To find out about servicing your customers faster, and more fairly, than ever before - register for your demonstration today.

Technology Fast 500

Symbility is growing as our products are gaining traction within the insurance industry for their ease of data collection and significant improvements to our customers workflow. In November 2012, Symbility was listed on Deloitte's Technology Fast 500, a ranking of the 500 fastest growing technology, media, telecommunications, life sciences and clean technology companies in North America.

Insurance industry adoption

Over the past 18 months, Symbility has announced new customer relationships (in chronological order) including: United Property and Casualty Insurance Company, a whollyowned subsidiary of United Insurance Holdings Corp., that writes and services property and casualty insurance in Florida, South Carolina, Massachusetts and Rhode Island, the Independent Mitigation and Cleaning/Conservation Network (IMACC), the largest network of independent restoration contractors in the United States, First Choice Repair, a national third party administrator, offering a Managed Repair Program through a network of credentialed contractors to assist the policyholders of property insurance carriers with restoration (Roofing, Mitigation, Flooring, Tarping, Board Up, Debris Removal and General Contracting) after damage from a claim and, Farmers Alliance Companies, specialists in providing personal, commercial and farm insurance for rural America for more than a century.

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INFORMATION TECHNOLOGY IN INSURANCE

Open, honest and transparent

Symbility Solutions is publicly traded in OTCQX:ATBEF and in Canada on TSX VENTURE:SY. the US on

Symbility was recently named to the TSX VENTURE 50. The TSX Venture 50 is an annual ranking of the top 10 companies listed on the TSX Venture Exchange, in each of five major industry sectors mining, oil & gas, technology & life sciences, diversified industries and clean technology based on a ranking formula with equal weighting given to return on investment, market cap growth, trading volume and analyst coverage.

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INFORMATION TECHNOLOGY IN INSURANCE

Benefits to Policyholders / Prospects:

They can get details of the various policies, the benefits there under, the premiums payable, etc Prospects can get advice on the suitable insurance plan for themselves. Policyholders can get information with regard to the status of the policy, the premiums due, the bonuses attached, the surrender values or loans available, revival possibilities, nearest office for any further transactions. Details can also be had about housing loans or other benefits available to policyholders Premiums can be paid without having to go to the office of the insurer, by direct debit to the policyholders credit card or bank account.

Benefits to agents:
If the insurer has an intranet, the agent can, sitting at his place of work, be attending the insurers office, making enquiries about status of proposals or claims or discussing with any officer or other agent, for clarification or advice, whenever he wants to do it. The physical distance between the agent and the office will not be of any consequence at all. The benefits to the agents will be
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INFORMATION TECHNOLOGY IN INSURANCE He can receive all circulars and instructions issued by any office. All delays on account of postal transmission, being forwarded from one level to another, dispatch department, absence of peons, wrong addresses, misplaced through oversight, lost on transit, etc., are avoided. Any doubts with regard to proposal, benefits, premium, taxation, medical examination, insurability, etc, can be discussed and got clarified directly from the person concerned. Communications to and from the office will be immediate through e-mail and at low cost.

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INFORMATION TECHNOLOGY IN INSURANCE

IT Department in an Insurance Company:

Functions:
The IT department in an insurance company performs the following functions: Provision of hardware and software resources. Adoption of latest technologies for competitive advantage. Training of employees at operating, head and controlling offices on offices automation and networks. Advise the top management on Business Process Re-engineering (BPR). Develop, maintain and implement insurance related applications. Maintenance of networks.

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INFORMATION TECHNOLOGY IN INSURANCE

Set up:
Evaluation
Technology Manager

and in

Acquisition hardware,

of

new

technologies

software,

networking and packaged solutions. Recruitment and supervision of system and network engineers Conducting of various training programmes Systems analysis and design
Systems Manager

Functional Specifications Development of application and user manuals Assignment of work to project leaders, System analysts and programmers Evaluation of studies Network Administration ( Including WAN) User administration, systems security, e-mail etc. Controlling and supervision of network administrators Maintenance of hardware Job scheduling, backups and file control Assigning work to operators and DEOs training of users
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Network Manager

Operations Manager

INFORMATION TECHNOLOGY IN INSURANCE Controlling of data flow

What will IT be Like in the Coming Years?

The Malhotra Committee had recommended that Information Technology should be used as the enabler to give the insurance industry its cutting edge over competition. It would help in reducing administrative costs and these savings could be used to build on its customer service and brand building. This can be done most effectively through the use of efficient IT infrastructure. It can be argued that much of the internet related technologies developed only in the last four years, and were not fully available to the nationalized insurance companies. It is also true that with all the problems of working in a public sector environment, several quality projects like networking, implementation of investment management software and the implementation of the

integrated software for underwriting and claims management brought the IT preparedness of the industry to a fairly decent level. Rugged use of IT in the year 2001 will tell whether at all the nationalized insurance companies will give competition a run for their money.

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INFORMATION TECHNOLOGY IN INSURANCE

Future Scenario
Some of the IT solutions that are essential for the working of a modern insurance company are given below. This will help build brand, strengthen loyalty from customers and business partners (agents mostly), and ensure a lean and mean company.

1. A Good web site through which customers can actually transact business. 2. A good back office infrastructure which can deliver insurance products and documents. This would be connected with a rugged computer network. 3. A study call centre fully integrated with all operations which interact with the customer for all his requirements. The objective would be to ensure that all channels of business art fully integrated. 4. A rugged (rough) data warehouse which 5. would provide the backbone for customer Relationship

Management (CRM), Data Mining, and Channel integration. 6. Excellent storage management with failsafe disaster recovery infrastructure.

Global best practices are best possible only when the IT infrastructure uses best-of-class components. This will enable the company to work efficiently with the bare minimum staff strength and devote all its energies to customer care. The customer today is very demanding and will not do business if feels that he is not getting
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INFORMATION TECHNOLOGY IN INSURANCE excellent service. It is essential to provide him service levels even beyond his expectations if his loyalty to the Insurance company.

(FIELD STUDY)
INFORMATION TECHNOLGY AND LIC
LIC has been one of the pioneering organizations in India who introduced the leverage of Information Technology in serving and in their business. Data pertaining to almost crone policies is being held on computers in LIC. The computers were introduced in 1964 in LIC. Unit record Machines introduced in late 1950s were phased out in 1980s and replaced by Microprocessors based computers in Branch and Divisional Offices for Back Office Computerization. Standardization of Hardware and Software commenced in 1990s. Standard Computer Packages were developed and implemented for ordinary and salary Savings Scheme (SSS) Policies.

Front End Operations: With a view to enhancing customer responsiveness and services, in July 1995, LIC started a drive of On-Line Service to policyholders and agents through computers which enables policyholders to receive immediate policy status report, prompt acceptance of their premium and get revival quotation, loan quotation on demand. Incorporating change of address can be done on line. Quicker completion of proposals and dispatch of policy documents have become a reality.
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INFORMATION TECHNOLOGY IN INSURANCE All 2048 branches across the country have been covered under front-end operations. So LIC claims that all its 100 divisional offices have achieved the distinction of 100% branch computerization. New payment related Modules pertaining to both ordinary and SSS policies have been added to the Front End Package catering to Loan, claims and Development Officers Appraisal to reduce time lag and ensure accuracy.

Metro Area Network:

A metropolitan Area Network, connecting 74 branches in Mumbai to pay their Premium or get their Status Report, Surrender Value Quotation, Loan Quotation etc. from and branch in the city. The system has been working successfully. More then 10,000 transactions are carried out over this Network on any given working day. Such Networks have been implemented in other cities also.

Wide Area Network:

All 7 zonal offices and all the MAN centres are connected through a Wide Area Network (WAN). This enables the customer to view his policy data and pay premium from any branch of any MAN city. As at May 2002, there were 91 centres in India with more than 1200 branches networked under WAN.

Interactive Voice Response Systems (IVRS):

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INFORMATION TECHNOLOGY IN INSURANCE IVRS, functional in 58 centres all over the country, enables customers to ring up LIC and receive information (e.g. next premium due, status, Loan Amount, Maturity payment Due, Accumulated Bonus etc) about their policies on the telephone. This information could also be faxed on demand to the customer.

Website:
LICs website, www.licindia.com, displays information about LIC and its subsidiaries- LIC (International) E.C., LIC (Nepal) Ltd., LIC Mutual Fund, LIC Housing Finance and their Products. The addresses/Email IDs of its Zonal Offices, Zonal Training Centres, Management Development Centre, Overseas Branches, Divisional Offices and also all branch offices are also provided. LIC has given its policyholders a unique facility to pay premiums through Internet absolutely free and view their policy details on Internet premium payments.

Information Kiosks:
LIC has set up Interactive Touch screen based Multimedia KIOSKS In Prime locations in metros and some major cities for spreading information to general public on various products and services offered. These KIOSKS enable the users to provide policy details and accept premium payments.

Info Centres:

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INFORMATION TECHNOLOGY IN INSURANCE It has also set up call centres to provide information about our products, policy services, branches addresses and other organizational information.

Information Technology in LIC for Service to Policyholders:

Twenty to twenty five years ago a few of us had heard of information technology. On 5th August there was thunderous applaud and the horizon reverberated and everybody heard that LIC has been bestowed upon the Nasscom Award. LIC has itself on the fast track of technology upgradation right from the year 198. As such it has taken about 20-25 year, with enormous number of programmers working for 10 to 12 hours a day. They have toiled hard to develop, test and put the systems in place. It may be recalled that in the year 1980 various vendors while selling the microprocessors had strongly advocated the need to induct trained and technically qualified programmers from open market, to man the microprocessors. It was the corporate office which expressed abundant faith in the ability of its staff for writing programs and also to handle the machines.

Technology is a strange creature. It gives us twin-engine commuter planes to fly. Then it introduces faults in those planes, throwing in the possibility of human error. today this strange creature makes us smile and
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INFORMATION TECHNOLOGY IN INSURANCE cry all at once. Smiles when a problem is resolved or new facility provided and cry when a new discrepancy creeps in.

Life Insurance Corporation of India is a pioneer financial institution in leveraging Information Technology as its frontline tool to better its overall efficiency in all areas of its activities. Today it is one of the largest users of Information Technology.

LIC has the largest dedicated network among all organizations in the country and has connected about 1500 branches all over India for better and prompt customer servicing.

LIC has multi-channel approach of using Information Technology by taking the optimum benefits of the latest technological advances.

Front End Applications Programs:

All 2048 branches of LIC are fully computerized covering all policy servicing aspects to give prompt computerized services from new policy introduction, acceptance of renewal premium, revivals, loans etc to final claims settlement.

Green Channel:
This is for on the spot policy completion. The processing time foe a new policy is brought down from days to minutes by cutting down the various processes in acceptance, scrutiny and underwriting of proposals.
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INFORMATION TECHNOLOGY IN INSURANCE

Single Window System:

The Single Window provides all policy servicing at one single point. Management information system has been developed for faster and better decision making and offering in an instant, the latest information at all levels. The advantage of the single window system is that the policyholder gets the required services across one country without having to go to different departments in the branch.

Networking:
LICs Wide area Network covers 100 Divisional Offices connecting about 1500 Branches through network. It is expected to cover all the remaining Branches by the end of this year. This helps the customer to pay his LIC premium in any of the Branches connected to the network. A Policyholder gets status report of his policies in these branches as well as quotations for revival, loans surrender etc

Online Premium Payment:

LIC has tied up with some Banks and service Providers to offer online premium collection facility to customers in selected cities. It is intended to extend this facility to all cities covered under our network.

Kiosks:
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INFORMATION TECHNOLOGY IN INSURANCE LIC have installed information Kiosks at selected 150 locations which give policy status report, other details about life insurance plans and servicing aspects. The idea behind Kiosks is to expand the service levels by making if free from the limitations of time and space and also to avoid the dependence on human intervention to get information. Our Kiosks not only provide information about our products but also enable the policyholders to know their policyholders to know their policy status.

IVRS: LIC have Interactive Voice Response Systems in 59 urban centers. This is a menu driven service. Customers can get selected information regarding their policies by calling the prescribed telephone numbers. These numbers are advertised frequently and are also available on the website www.licindia.com.

Info Centre:
LIC have commissioned our first policy service Info Centre at Mumbai in March, 2002. This centre is equipped with state of art technology and manned by trained persons. People desiring any information regarding their life insurance needs and about their policies can get the same by calling the Info Centre telephone number. Such centers have also been installed at Delhi, Kolkata, Hyderabad, Chennai, Bangalore, Ahmedabad and Pune.

Intranet :
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INFORMATION TECHNOLOGY IN INSURANCE LIC has an Intranet, Jeevan Sanchar which interconnects our offices and is used to make files available to employees, send or receive e-mail, host online discussions or publish information within the organization. The departments of the central office have an intranet presence of their own through which they provide information about the latest circulars and these help the offices in speedy decision making.

AIG E-BUSINESS RISK SOLUTIONS

Cyber and network liability insurance is one way to address these risks and it is becoming more popular. AIG E-Business Risk Solutions (AIG EBRS), as well as a few other companies, have created insurance specifically designed to address network security liability and first party I loss. AIG EBRS was formed on January of 2000 to evaluate the risks associated with the Internet computer networks and to design solutions combing risk management advice, technology and insurance. "We felt
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INFORMATION TECHNOLOGY IN INSURANCE that with the growth of the e-business and network, based technology, I we could not afford to ignore these risks," Freeman explains. "We needed to set up a specialist group to take on these risks around the world." AlG EBRS is made up of about 50 people, which includes lawyers, technology specialists and underwriters. The group offers a comprehensive suite of insurance products and risk management services. Security threats are continually evolving, so developing a security program is not a one-time occurrence. Security must involve more than just technology; it must be included in your business planning and processes; and it must be communicated to the entire organization. Having effective IT security means securing your policies, infrastructure and administration. Spending just enough on security to comply with regulations may leave you with a weak security program. It only takes one vulnerability to allow a hacker access to your network. Having a solid cyber risk management plan means knowing how to identify and control cyber risk. That means performing periodic security assessments and having a business continuity plan in place. Companies also need to understand the risks involved with using vendors. If your insurance does not cover information theft, you might want to consider the alternatives.

What is Hot; what is Not in Technology

The insurance industry is undergoing an evolution and facing a wealth of challenges. Underwriting, CRM, legacy systems, and distribution are all undergoing changes. There is more than just hype surrounding outsourcing, wireless devices, and business process management. However, are they a necessity for your company? Kimberly Harris, Vice66

INFORMATION TECHNOLOGY IN INSURANCE President and Research Director, Gartner, discussed these emerging trends and technologies at the ACORD LOMA Insurance Systems Forum, providing attendees with insight into which are prime time. Facing Change The insurance industry is facing a lot of dynamic change. "Everything that we consider traditional and normal is changing around us," said Harris. "There are multiple drivers of change-social, technological, environmental, economic and political drivers. Your customers, employees and supply partners are using the Internet and wireless technology more often to conduct business. However, technologically, your core systems are getting older. There is no way we can continue to overlook or deny the shortcomings of our legacy systems. Legacy systems are going to be challenged continually by new technology development, as well as changing business needs, such as supporting real time information requirements. Environmentally, the Property & Construction (P&C) sector will suffer losses because of things it cannot control--environmental conditions, mold, asbestos, unpredictable acts of nature, not to mention terrorist activity and other types of war related traumas. Economically, companies are facing commodization. Many companies have products that are becoming commodities; many products are becoming harder for insurers to differentiate in the market, especially for consumers who are driven, based upon the price. And politically, there is more regulatory change on the horizon such as the fight against state level insurance regulation versus national level regulation."

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INFORMATION TECHNOLOGY IN INSURANCE

ANALYSIS OF SURVEY REPORT

The number of respondent were 30, comprising 15 students and 15 working professional. The sampling method adopted was random sampling method. Response To Individual Question: Q.1. Do you hold any kind of insurance policy? Response: Out of 30 respondents, 25 of them had insurance policy. The rest who did not have any kind of insurance policy comprised of 4 students and 1 professional. Q.2. What is the kind of insurance policy you hold? Response: 20 of them had life insurance policy in their name. The rest 5
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INFORMATION TECHNOLOGY IN INSURANCE people held general insurance policy for their vehicle. Q.3. How did you get yourselves insured? Response: Out of 25 people, the agents insured 20 of them. 3 people got themselves insured personally remaining 2 people were insured through internet. Q.4. Are you aware that the premium can be paid through internet? Response: Out of the whole lot of 25 peoples, only 15 people were

aware of the fact that they could pay their premium through internet rest of them had no idea about it. Q.5. How do you pay your premium ? Response: It was seen that the 15 people pay their premium via agent. 2 people pay their premium through internet. 7 persons pay their premium through ECS system and the rest 1 pay premium personally. Q.6. Do you use internet to access your policy details? Response: Out of whole chunk of 25 peoples, only 12 of them used internet to access their policy details. Q.7. Would you like to get your premium reminder through E-mails? Response: It was quite surprising that everybody out of the lot of 25 wanted to get a reminder of the payment of premium through E-mails.

Q.8. Would you prefer using internet to acquire insurance policy in future?

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INFORMATION TECHNOLOGY IN INSURANCE Response: All of them who have policy and even those who do not have a policy in getting their policy online the next time when they apply for one.

CHAPTER 04 FINDING ANALYSIS & INTREPRETATION

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INFORMATION TECHNOLOGY IN INSURANCE

The Primary data is been collected through visiting a private insurance company named SOURCE INDIA and by doing survey. The method adopted for survey was random sampling method. There were 30 respondents in survey. The insurance company was situated at Chopra Court, Near HDFC Bank, UNR-3. They provided me with information regarding IT in INSURANCE SECTOR & interacted with me very politely. From the survey and visit I can say that though there has been a rapid change in Information Technology that has an impact on every
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INFORMATION TECHNOLOGY IN INSURANCE sector. But implementation for the same is not done quickly it needs time for the people and organizations to accept it. In Small Cities like Ulhasnagar 50% of people follow traditional method and organizations also dont implement these technologies as they are only informed not aware about it. The supporting technology requirements will be: Interactive. Rely on large relational databases. All time rather than batch. Longitudinal rather than episodic. Connectivity rather than be self contained.

There have been a lot of changes in the insurance industry in the country with the opening up of insurance sector for competition and with the establishment of IRDA.

CHAPTER 05 CONCLUSION

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INFORMATION TECHNOLOGY IN INSURANCE

CONCLUSION
With the growing number of people insuring themselves for various
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INFORMATION TECHNOLOGY IN INSURANCE kind of insurance, it would be rather difficult to keep track of all the data manually. It is here that the power of computers along with their inherent advantages of high storage capacity, high speed of processing and easy retrievability comes into picture and enables insurance companies to be up to date with their information and keep abreast of technological advancements. The growth of the internet has in fact, further accelerated the use of technology and helped to disseminate information and acquire new markets. E-learning has made the task of training that much easier by making available training materials over the internet and which their agents and other personnel can access in a cost effective manner. Insurance companies have already started selling policies online, where the prospective client can buy certain types of polices without interacting with any human personnel of the company. The potential of insurance companies in India is huge considering the fact that the incomes are rising and only a small percentage of Indians are already insured. Such exponential growth can only be managed by using the latest in information technology and providing value added service to its customers in a quick and efficient manner while keeping its costs down. Thus, the growth of the insurance sector is linked to its acceptance and use of information technology.

SUGGESTIONS
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INFORMATION TECHNOLOGY IN INSURANCE As the pace of change is going to be faster than what was witnesses in the last decade, there is a need for system of continuous research, better understanding the change process and its implications on insurance. The suggestion is that we must institutionalize insurance research, say by having an institute of insurance research to meet the above challenges. Similarly, each bank should have a set up where insurance specific research takes place in terms of emerging areas and their possible solution.

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INFORMATION TECHNOLOGY IN INSURANCE

Title- Information technology in the insurance industry: the impact of electronic data processing on managerial processes and insurance functions Irwin series in risk and insurance Author-Robert C. Goshay Publisher- R. D. Irwin, 1964

WEBILOGRAPHY WEBSITES REFFERED

WWW.RBI.ORG.IN WWW.WIKIPEDIA.ORG.COM WWW.BANKBAZAR.COM WWW.INSURE.COM

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