It in Insurance

Overview:

As per the Wikipedia, Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount to be charged for a certain amount of insurance coverage is called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.

The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a financial (personal) loss. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated.

The below figures shows how IT could be bundled in each of the insurance companies' processes. At every level we can bundle some key IT modules that definitely will increase the efficiency of overall insurance engine.

1.0 Challenges in Insurance Industry from an IT standpoint :

In Insurance industry companies have grown continuously, through merger and acquisitions. In this process they have amassed a legacy environment that is crowded with disparate and disjointed applications and infrastructure. The business model of Insurance companies (most of which are organized around a product line like life, health, personal, commercial etc.) discourages the consolidation of IT systems and business processes. This results in duplicate costs and inefficiency for the company.

Insurance companies require a robust, flexible and scalable modern IT system to compete in the highly competitive market. But they are faced with a host of technology challenges...