Application of Eis in Insurance Industry

In: Computers and Technology

Submitted By nirupam
Words 6614
Pages 27
Research on
Application of EIS in Insurance
Industry

Introduction

Insurance market is a vitally important economic institution where mutually beneficial exchange between consumers - insurance takers and vendors - insurance companies is carried out. Consumers purchase the promise of the insurer to cover the financial consequences of a possible loss, paying the insurance premium for this service. The insurers take the liability to cover the losses in case of a probable harmful event and issue a special document testifying the power of the contract - the insurance policy. Information is crucial for market exchange to occur - consumers have to possess the information about supply and prices, vendors - about demand and paying ability of their clients. Modern economic theory attributes to the market an important innovative function too - the market encourages vendors to create new products and bring them to the market in response to the emerging demand for them.

Security for the future strongly influences the welfare of people by making better the personal well-being and by allowing for more risk taking activities unfolding the entrepreneurial spirit in an environment where insurance against harmful loss is available.

Role of Information Technology in Insurance Sector

The insurance industry has a particular dependence on information technology. Insurance was one of the first industries to apply computers transaction processing -- to handle the vast number of claims, reserve estimates, payments, codes, etc. required. Examples of this data processing commitment began in the 1950's.
Not long into the information revolution, the need to make sense out of this mass of data was recognized. Hence the origins of Management Information Systems (MIS) in the 1970's. The goal of MIS was to consolidate data into meaningful reports. Yet these reporting systems were…...

Similar Documents

Application of Michael Poter's Force in Automobile Industry

...Poters 5 Forces Application on Automobile Industry Topic: Apply the Porter's five forces model on Automobile Industry and analyse the attractiveness of the Industry for Investment purpose Evolution of Porter's Five Forces Model Five forces is a framework for the industry analysis and business strategy development developed by Michael E. Porter of Harvard Business School in 1979. Michael Porter is a professor at Harvard Business School andis a leading authority on competitive strategy and international competitiveness. Michael Porter was born in Ann Arbor, Michigan. Five forces uses concepts developing, Industrial Organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the industry profitability. An "unattractive" industry is one where the combination of forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition". Introduction Five Forces Model by Michael Porter Five Forces model of Michael Porter is a very elaborate concept for evaluating company's competitive position. Michael Porter provided a framework that models an industry and therefore implicitly alsobusinesses asbeing influenced by five forces.Michael Porter's Five Forces model is often used in strategic planning. Porter's competitive fiveforces model is probably one of the mostcommonly used business strategy tools and has......

Words: 293 - Pages: 2

The Burgeoning Indian Health Insurance Industry:

...health insurance industry, with particular focus on Policyholders perceptions on Health insurance based on household survey. The Burgeoning Indian Health Insurance Industry: ……...Yet miles to go!!! By *V. Jayalakshmi (M.Phil, LLB, FIIII(Non-Life)) __________________________________________________________________ * Assistant Professor, Siva Sivani Institute of Management, Kompally, Secunderabad, Andhra Pradesh, India. Pursuing Ph D from Osmania University, jayalakshmi@ssim.ac.in *This paper was presented at the National Seminar on Health Insurance “A Decade of Experience: Health Care Insurance… Present Scenario”, in Hyderabad on 24th January, 2012. The Burgeoning Indian Health Insurance Industry: ……...Yet miles to go!!! Introduction Health insurance has become one of the fastest growing segments in the non-life insurance industry in India in the recent years, experiencing a robust sixty per cent remarkable growth during 2007 – 08 over the past year. From a modest premium volume of Rs. 675 crore in 2001- 02 the health insurance premium has grown to Rs. 7803 crores in year 2009-2010, and is poised to grow at a compound annual growth rate (CAGR) of 25 to 30 per cent to reach a market size of around Rs 28,000 crore by financial year (FY) 2015 as per IRDA estimates. This segment is also emerging as an increasingly significant line of business for life insurance......

Words: 5563 - Pages: 23

Analysis on Thai Insurance Industry

...Thai insurance industry ------------------------------------------------- History The very first actual insurance contract, signed in Genoa in 1347. Contracts were signed by individuals, either alone or in a group. They each wrote their name and the amount of risk they were willing to assume under the insurance proposal. And then in 1688, the first insurance company was established as the widespread of insuring cargo while being ship throughout the maritime nations of Europe. It started at Lloyd’s Coffee House where merchants, ship-owners, and underwriters met to transact their business. And then Lloyd’s become one of the first modern insurance companies, Lloyd’s of London. Insurance in Thailand start around Ayudhya period when there is trade between Thai and foreigners. Foreign merchants brought marine insurance into Thailand which is first non-life insurance in Thailand. During King Rama the fourth era, there are many France department stores which some of them are representative of insurance company such as Netherlands Indea Sea and Fire Insurance Company, Ocean Marine Insurance Company, and Colonial Sea and Fire Insurance Company. And then in 1908, there is the first Act of Parliament about insurance in Thailand. For the life insurance, in Thailand, it was started in the era of King Rama the fifth by some foreign insurance companies. At first, nobody was interested in it so the business turned out to be an unsuccessful. After that, in WWI period, life insurance had......

Words: 3505 - Pages: 15

Five Competitive Forces in the Insurance Industry

... Five Competitive Forces Analysis in the Insurance Industry RichardSmith Managerial Economics December 6, 2013 Industry Insurance is something that is needed by everyone today. It is used by individuals, business, corporations, etc. to help mitigate or minimize their financial risk. Various types of insurance exist today, from home, health, life, auto, travelers, indemnity, boat, renters, and even pet. Competition between insurance carriers is very stiff. In fact, in the United Kingdom (UK), the competition is so stringent, they have created a Competition Commission (CC), which is designed to ensure healthy competition between insurance companies in the UK for the ultimate benefit of the consumers and the economy ("Competition Commission GOV.UK."01). Many insurance companies have gotten caught up in having an unbalanced pool of insurers because they were not prepared and did not do their homework. The have to be very careful in their underwriting process to ensure they insure the most desirable individuals. Many insurance companies have learned quickly the value in the knowledge and power of information obtained from doing research and the huge financial risk associated with getting stuck with a poor unbalanced pool of insured. Therefore, many insurance companies today are utilizing various tools and setting themselves apart from the competition via the competitive forces in an effort to avoid the financial repercussions associated with not being prepared. That......

Words: 1706 - Pages: 7

Insurance Industry Road Map Ahead

...Insurance Industry – Road Ahead Path for sustainable growth momentum and increasing profitability kpmg.com/in Foreword The Insurance industry in India has undergone transformational changes over the last 12 years. Liberalization has led to the entry of the largest insurance companies in the world, who have taken a strategic view on India being one of the top priority emerging markets. The industry has witnessed phases of rapid growth along with spans of growth moderation, intensifying competition with both life and general insurance segments having more than 20 competing companies, and significant expansion of the customer base. There have also been number of product innovations and operational innovations necessitated by increased competition among the players. Changes in the regulatory environment had path-breaking impact on the development of the industry. While the life insurance industry got affected by the introduction of cap in charges, the general insurance industry got impacted by price detariffication and Motor third party risk pooling arrangements. While the insurance industry still struggles to move out of the shadows cast by the challenges and uncertainties of the last few years, the strong fundamentals of the industry augur well for a roadmap to be drawn for sustainable long-term growth. The available headroom for development, sustainable external growth drivers, and competitive strategies would continue to drive growth in the gross written premiums.......

Words: 15937 - Pages: 64

Insurance Industry Analysis

...Providence, Rhode Island ENVIRONMENTAL ANALYSIS: Automobile insurance Industry Course: MGMT 6800 Yimeng Zhang October 4, 2014 Automobile insurance Industry- Environmental Analysis The motor vehicle insurance, refers to a kind of commercial insurance that offer liable for compensation to life or personal injury or property damage caused by motor vehicles due to natural disasters or accidents. Car insurance is a kind of property insurance. In the field of property insurance, motor insurance belongs to the young categories of insurance. This is because the car insurance comes and develops with the emergence and popularity of the car and. 1. Strategically Relevant Factors in the Macro-Environment-PESTEL Analysis PESTEL analysis focuses on the six principal components of strategic significance in the macro-environment: political factors, economic conditions, sociocultural forces, technological factors, (natural) environmental forces, and legal/regulatory factors. These are the significance factors of one industry varies and management will focus primarily on those with the greatest effect on their company. The most important factor in the vehicle insurance industry is Economic Factors. a. Political and legal factors The Automobile Insurance industry does not receive any direct assistance from the federal government in the form of tariffs. However, the National Association of Insurance Commissioners (NAIC) provides a forum for the development of......

Words: 3314 - Pages: 14

Five Porters Forces in Insurance Industry

...statements, a variety of analysis techniques has been developed. In the following sections, we explain several common methods of analysis. The choice of method depends on which technique appears to provide the most relevant information in a given situation. METHODS OF ANALYSIS LO 2 Differentiate between horizontal and vertical analysis. Financial statement analysis should focus primarily on isolating information useful for making a particular decision. The information required can take many forms but usually involves comparisons, such as comparing changes in the same item for the same company over a number of years, comparing key relationships within the same year, or comparing the operations of several different companies in the same industry. This chapter discusses three categories of analysis methods: horizontal, vertical, and ratio. Exhibits 13.1 and 13.2 present comparative financial statements for Milavec Company. We refer to these statements in the examples of analysis techniques. Financial Statement Analysis 677 EXHIBIT 13.1 MILAVEC COMPANY Income Statements and Statements of Retained Earnings For the Years Ending December 31 2010 Sales Cost of goods sold Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold Gross margin Operating expenses Income before taxes Income taxes Net income Plus: Retained earnings, beginning balance Less: Dividends Retained earnings, ending balance $900,000 43,000 637,000 680,000 70,000 610,000......

Words: 18672 - Pages: 75

Examining the Application Business Ethics and Laws in the Tobacco Industry

...Examining the Application Business Ethics and Laws in the Tobacco Industry Abstract “Ethics is not something exterior to the economy…rather, ethics is and interior principle of the economy itself, which cannot function if it does not take account of the human values of solidarity and reciprocal responsibility.” (Pope Benedict XVI) I agree with Pope Benedict. Ethics deals with values that relate to the nature of human conduct and values associated with that conduct. In today’s business environment it is critical to understand the relationship between ethics and business law as ethical behavior and corporate responsibility are more important than ever. It has been argued that good ethics within an organization equate to good business, although good ethics are not required to be successful in business. This examination will put a spotlight on the role of ethics in the business environment, with a particular look at the application of ethics in the tobacco industry. Keywords: ethics, business ethics, natural law, tobacco Examining the Application Business Ethics and Laws in the Tobacco Industry “Business transactions are completed through a combination on values of the parties and the laws that reflect those values and the importance of ones word in business.” (Twomey & Jennings, 2014, p. 33) Business ethics examine an organizations ethical principles and potential moral and ethical dilemmas. In a general sense, business ethics is the application of moral......

Words: 2146 - Pages: 9

Computer and Its Uses in Insurance Industries

...output devices. Software can be classified into systems or applications software. Broadly speaking, software that offers facilities for better utilization of systems resources is called systems software, while software developed for specific application needs is called applications software. Software such as operating systems, computer language processors, general purpose packages and special purpose packages are systems types. Financial accounting, payroll, personnel and inventory control packages are examples of applications software. Commonly encountered PC software includes programs for electronic spreadsheets, data management systems, word processing, operations research in statistics, project management, computer aided design, presentation systems, desk-top publishing and packages integrating two or more of these programs into software suites. Computer Technologies used in the Insurance Company: Technology pays a tremendous role in the modern insurance industries. The use of computers, specifically, has allowed changes with regard to how data is retained and transactions conducted. Computers also link up branches from anywhere in the world. Communication and information transfer happens in a matter of moments. These functions make computers an extremely valuable tool in the insurance industries. Computers are instrumental to the way the Insurance Company performs its business. This technology allows Insurance to be able to take transactions and update accounts......

Words: 4999 - Pages: 20

Auto and Insurance Industry

...changed the structure and location of the U.S. motor vehicle industry. Whatever changes are occurring globally or within the domestic market, production and sales in the U.S. remain at historically higher levels. Gross output in the U.S. automotive manufacturing sector in 2004, including motor vehicle parts, trailers, bodies, and heavy trucks was $424 billion. That was the largest output of any durable goods manufactured product measured by the Commerce Department Bureau of Economic Analysis (BEA). Real output has increased 55% since 190, compared to 35% for manufacturing as a whole. The industry has expanded from just over $100 billion per year in the late 1970s to nearly $500 billion in 1999, which is still the all time peak. Gross output declined in 2000-01, rose to $436 billion in 2002, but fell slightly to $425 billion in 2004. Gross output includes the value of intermediate inputs as well as that of the final assembly process. The automotive industry includes those industries associated with the production, wholesaling, retailing, and maintenance of motor vehicles. The average hourly income for the automotive industry varies depending on which industry you are dealing with varies. In the manufacturing industry the annual average for 2010 was $22 an hour. Today there has been little change in that rate. In a 12 month period there has only been about a twelve cent difference in that rate. The industry has not changed much; in fact some salaries have only......

Words: 596 - Pages: 3

Insurance Industry Risks

...is used routinely in the insurance industry. In this paper I will talk about two different types of home insurance and talk about the different risks associated with each. Discussion A portfolio is used to describe a collection of securities. In finance, the risk of an individual security differs from the risk of a portfolio composed of similar securities. In order to help us understand why, Chapter 10 in the book gave a great example on insurance companies. Let’s consider two types of home insurance: theft insurance and earthquake insurance. Lets also suppose that the risk of these two hazards is similar for a given home in a given area. Based on this information we would know that the risks of the individual policies are similar, however, the risks of the portfolios might be drastically different. For example, if the chance of theft in a given home is 1%, the insurance company would expect about 1% of the 100,000 homes in the area to experience a robbery. Thus the number of claims would be around 1,000 per year. If the insurance company holds reserves sufficient to cover roughly 1,000 claims, it will have enough to meet its obligations on its theft insurance policies. The portfolio for the earthquake insurance is a little riskier. For example, if in a given area, the risk of an earthquake is 1%, the risk of having an earthquake so low that it might not occur. However, if it did occur, since all of the homes are in the same city, the insurance company could expect......

Words: 1091 - Pages: 5

Marketing Communication Strategies and Applications in the Nutraceutical Industry in Uae

...American University of Sharjah Master of Business Management MBA 509 | Marketing Concepts Spring 2015 Marketing communication strategies and applications in the nutraceutical industry in UAE By Nadia B. Azzam ID 27379 Submitted to Dr. Mohammed Sajid Khan Submission Date May 31, 2015 1 Table of Contents 1.0. Introduction .......................................................................................................................... 3 2.0. Literature review .................................................................................................................. 3 3.0. Application of Promotional strategies in Nutraceutical Dr. Nutrition Centre, UAE ........... 7 4.0. Conclusion ......................................................................................................................... 10 5.0. References .......................................................................................................................... 12 2 1.0. Introduction In today’s society, consumers are bombarded with a massive number of promotional messages delivered to them through different mediums and from different organizations. Whether at home watching TV, listening to Radio, walking in the mall or driving through the city, consumers get exposed to those messages which they process through different channels, and eventually create behavioral responses. However, due to the competitiveness in the......

Words: 2819 - Pages: 12

Five Competitive Forces in the Insurance Industry

...UK INSURANCE KEY FACTS 2014 UK Insurance KEY FACTS 2014 abi.org.uk 3 @BritishInsurers Follow us on Twitter @BritishInsurers ASSOCIATION OF BRITISH INSURERS About the ABI The Association of British Insurers is the voice of the UK insurance industry, representing general insurance and longterm savings and life insurance. The ABI has over 250 members, who account for around 90% of UK insurance premiums. www.abi.org.uk – has all the latest news, views and key information about insurance and the ABI’s work on behalf of the industry. The ABI produces detailed statistics on the industry, which are free to members and can be purchased by others for a fee. Contents 1 Introduction 2 The insurance industry is a UK success story 4 General insurance and its customers 10 Long-term savings and life insurance and its customers 15 Insurers play an important role as investors in the economy 16 Glossary 17 Contacts at the ABI abi.org.uk 4 UK INSURANCE KEY FACTS 2014 The UK insurance industry is the largest in Europe and the third largest in the world. It plays an essential part in the UK’s economic strength, managing investments of £1.8 trillion (equivalent to 25% of the UK’s total net worth) and paying nearly £12bn in taxes to the Government. It employs around 315,000 individuals, of which more than a third are employed directly by insurers with the remainder in auxiliary services such as broking. On......

Words: 3011 - Pages: 13

The Application of Six Sigma in Service Industry

...The Application of Six Sigma in Service Industry Executive Summary: Six Sigma, or called 6σ, is the standard deviation in statistics, using for showing the dispersion of data. The extension of the meaning is that, in general, an enterprise’ products’ defective rate is approximately 3 to 4 sigma, which stands for 6210 to 66800 defects out of one million finished products. These many defects are probably not ideal so that if corporations continuously improve their quality to reach 6sigma level, it will be close to perfect performance then reaching the requirements of customers. All in all, 6sigma represents that in one million products, there are only 3.4 defects. In fact, the concept of Six Sigma, as quality control concept, was initially introduced by Bill Smith from Motorola; His goal is to decline the defects of products and production process, increasing product quality. However, Sig Sigma theory really became popular after the practice of GE (General Electric). Jack Welch in 1990s summarized the successful experience of TQM (Total Quality Management) as well as refined the skills of process management and most effective method to make Six Sigma become a managerial model of improving corporation’s performance and competency. This method has been proved to be very effective after the application in many multi-national corporations such as Dell, GE, Motorola, HP, and etc. With the accumulation of practice experience, Six Sigma Theory has been derived to a management......

Words: 1137 - Pages: 5

The Indian Insurance Industry and Cournots Model

...The Indian Insurance Industry Traditionally Indian Insurance market had had a fair share of competition. An Ordinance was issued on 19th January, 1956 nationalizing the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies—245 Indian and foreign insurers in all. The LIC thus had an absolute monopoly till the late 90s when the Insurance sector was reopened to the private sector. Today there are 23 life insurance companies operating in the country In this paper we will study the advent of the private players into the insurance market and the change in the insurance market from monopoly to an oligopolistic one. For the sake of simplicity in taking forward our discussion on this change let’s assume the current insurance market being dominated by two players: 1. LIC – Nationalized Insurer 2. Rest of the insurers (ROI) - All 22 private insurers excluding LIC Both the insurers are providing the identical products i.e. life insurance policies. Further let’s assume that they incur ‘Zero’ marginal costs. Thus the various costs incurred by them being only the fixed costs. The duopoly market is thus constructed for the insurance market as illustrated below. Cournot solution D Q 0 P* Q* P1 P2 Q1 Q2 Q* L K C E F MR LIC MR ROI Before the nationalization of the life insurance sector, LIC was the only seller in the market. The demand......

Words: 664 - Pages: 3