CHAPTER 1

INTRODUCTION OF INSURANCE

Insurance is the equitable transfer of the risk of a loss, from one entity to
another in exchange for payment. It is a form of risk management primarily
used to hedge against the risk of a contingent, uncertain loss.
According to study texts of The Chartered Insurance Institute, there are the
following categories of risk:
1.

Financial risks which means that the risk must have
financial measurement.

2.

Pure risks which means that the risk must be real and not
related to gambling

3.

Particular risks which means that these risks are not
widespread in their effect, for example such as earthquake risk for the
region prone to it.

It is commonly accepted that only financial, pure and particular risks are
insurable.
An insurer, or insurance carrier, is a company selling the insurance; the insured,
or policyholder, is the person or entity buying the insurance policy. The amount
of money 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 insured receives a contract. called the insurance policy. which details the conditions and circumstances under which the insured will be financially compensated. for example. A contract (policy) in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. look for the best priced package that is right for you . The company pools clients' risks to make payments more affordable for the insured.prices can vary from one insurance company to the next. And make sure you know what you want. prefer 24-hour claims service or face-to-face contact with an insurance representative. 2. Some individuals. When shopping around for an insurance policy. DEFINITION OF 'INSURANCE' 1. the amount of the deductible and the extent of the . Also consider the claims settlement process.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.

in effect. The event may be death of a bread-winner to the family in the case of life insurance. Co-operative Device: The most important feature of every insurance plan is the co-operation of large number of persons who. consideration or premium. 2. herein called. Such a group of persons may be brought together voluntarily or through publicity or through solicitation of the agents. so think about more than just the price CHARACTERISTICS OF INSURANCE rved in case of life. Sharing of Risk: Insurance is a device to share the financial losses which might befall on an individual or his family on the happening of a specified event.. fire in fire insurance and other certain events in general insurance. The loss arising nom these events if insured are shared by all the insured in the form of premium. 3. marine-perils in marine insurance. accident in motor insurance. etc.replacement coverage. Value of Risk: The risk is evaluated before insuring to charge the amount of share of an insured. Insurance companies and the policies they offer are not all the same. theft in burglary insurance.g. marine. There are several methods of . agree to share the financial loss arising due to a particular risk which is insured. fire and general insurances 1. e.

the probability of loss is calculated at the time of insurance..evaluation of risks. In life insurance. . the contingency is the fire or the marine perils etc. 4. Insurance is not Charity: Charity is given without consideration but insurance is not possible without premium. 5. If there is expectation of more loss. Payment at Contingency: The payment is made at a certain contingency insured. It is a profession because it provides adequate sources at the time of disasters only by charging a nominal premium for the service. the death or the expiry of term. If the contingency occurs. will certainly occur. otherwise no amount is given to the policy-holder. In other insurance contracts. the payment is certain. Since the life insurance contract is a contract of certainty. The insurer promises to pay a fixed sum on the happening of an event. So. 6. if the contingency occurs. payment is made. So. the purpose is not to make good the financial loss suffered. higher premium may be charged. because the contingency. payment is made. Amount of Payment: The amount of payment depends upon the value of loss occurred due to the particular insured risk provided insurance is there up to that amount. It provides security and safety to an individual and to the society although it is a kind of business because in consideration of premium it guarantees the payment of loss. may or may not occur.

Information Technology covers a broad spectrum of hardware and software solutions that enable organizations to gather. It also details technology-based workflow processes that expand the capacity of an organization to deliver services that generate revenue. Last. Data overload is becoming an increasingly important issue since many businesses are processing large amounts of data on a daily basis. different challenges are arising and IT professionals are striving to meet them. Information technology Information technology (IT) is the application of computers and telecommunications equipment to store. Network security is by far the greatest concern for many companies and they rely on their IT staff to prevent or stop these system breaches. check out some basics on cables and connectors and the here. The four main focuses of IT personnel are business computer network and database management. information security. Systems are . For a guide on tech fundamentals. As the IT industry evolves to meet the technology demands of today’s workplace.Chpt 2. often in the context of a business or other enterprise. and analyze data that helps them achieve their goals. with many of them not have the processing power to do so. retrieve. two of the most essential skills needed from IT professionals are teamwork and communication skills. Read more about the basics of computer security here. transmit and manipulate data. organize. and computer tech support. but not least. business software development.

Therefore. these architects are highly sought after and one of the toppaying professions in the industry. 1.complex and people are needed to help translate that task. identify. analysts design and develop computer systems and are an expert at every facet of hardware. Because this is still an emerging technology. Analysts also evaluate the systems and research the industry for better products to enhance their existing system. software. IT professionals are the ones responsible for helping others get their work done efficiently without the complex jargon of the technology world. and networks.2 Cloud Specialist Cloud specialists organize and give configuration to the information infrastructure in the sky. 1.4 Health IT Specialist .3 Computer Forensic Investigator These investigators are computer crime detectives that search for. and evaluate information from computer systems.1 Computer Systems Analyst In this position. 1. Here are some of the most popular positions for people interested in Information Technology: 1.

Health IT specialists will mix computer knowledge will recordkeeping skills. and test for databases. especially with Affordable Care Act coming on and transition from paper to electronic health records. . 1. This can mean anything from Microsoft’s latest word processor to health IT programs for hospitals.5 Database Administrator Database administrators create. 1. and billing.7 IT Manager These managers are the contact pros when your email won’t send or Microsoft Word doesn’t open.8 Information Technology Vendor Manager Slightly more hands-off compared to some tech positions. They create web pages. medical coding.6 Web Developer Web developers are in high demand because they have a great understanding of what makes a good operating system. As the head of the IT department. they ensure that a company’s network is operating smoothly and that dangerous threats like malware are minimized. among numerous other skills. 1. upgrade. vendor managers oversee supply when it comes to software and hardware. web applications and web content with their knowledge of what the average surfer finds visually stimulating and how to optimize sites for mobile tech.Health IT is booming. 1.

hardware. mobile application developers are and will be in high demand for years to come. especially as mobile devices and technology becomes increasingly sophisticated." and is pronounced "I. or the people that work with these technologies. network administration. the Internet." It refers to anything related to computing technology. and many other related occupations. networks. Many companies now have IT departments for managing the computers. Aside from maintaining a healthy computer network. such as networking. and other technical areas of their businesses.T. Web development. software.1. This profession is expected to add 96. DEFINATION OF INFORMATION TECHNOLOGY IT Stands for "Information Technology. Since we live in the . technical support. they also lend their tech knowledge to managing telecommunication networks. IT jobs include computer programming.600 new positions by 2020 1.10 Mobile Application Developer Because of our highly-mobile lifestyle. computer engineering.9 Computer Systems Administrator The expertise of network and computer systems administrators is essential to every office.

ROLE OF INFORMATION TECHNOLOGY Information technology (IT) has become a vital and integral part of every business plan. allowing staff to communicate using live chat systems. VI . These systems are best used when the inventory management system is connected to the point-of-sale (POS) system. organizations need to maintain enough stock to meet demand without investing in more than they require." information technology has become a part of our everyday lives. Communication For many companies. Over the years. That means the term "IT. The reasons for the omnipresent use of computer technology in business can best be determined by looking at how it is being used across the business world. triggering an order of additional stock when the quantities fall below a predetermined amount. a number of other communications tools have also evolved. online meeting tools and videoconferencing systems. email is the principal means of communication 6. Email was one of the early drivers of the Internet. Voice over internet protocol (VOIP) telephones and smart-phones offer even more high-tech ways for employees to communicate. is here to stay.1 between employees."information age. Inventory management systems track the quantity of each item a company maintains. IT plays a role." already highly overused.2 Inventory Management When it comes to managing inventory. providing a simple and inexpensive means to communicate. The POS . 6. suppliers and customers. From multi-national corporations who maintain mainframe systems and databases to small businesses that own a single computer.

Progressive companies use that data as part of their strategic planning process as well as the tactical execution of that strategy. If a customer calls a call center with an issue. 6. Companies are able to store and maintain a tremendous amount of historical data economically.system ensures that each time an item is sold. maximize return on investment and identify areas of improvement.4 Management Information Systems Storing data is only a benefit if that data can be used effectively. regardless of their geographical location. Management Information Systems (MIS) enable companies to track sales data. one of that item is removed from the inventory count. 6. the customer support representative will be able to see what the customer has purchased. and employees benefit from immediate access to the documents they need. rows of filing cabinets and the mailing of documents is fading fast. creating a closed information loop between all departments. Today. call up the training manual for that item . These documents become instantly available to everyone in the company. Managers can track sales on a daily basis. allowing them to immediately react to lower-than-expected numbers by boosting employee productivity or reducing the cost of an item. so that a more enriching experience is possible. expenses and productivity levels. view shipping information.3 Data Management The days of large file rooms. most companies store digital versions of documents on servers and storage devices. The information can be used to track profitability over time. 6. Customer Relationship Management (CRM) systems capture every interaction a company has with a customer.5 Customer Relationship Management Companies are using IT to improve the way they design and manage customer relationships.

7. The world has developed into a global village due to the help of information technology allowing countries like Chile and Japan who are not only separated by distance but also by language to shares ideas and information with each other.1.and effectively respond to the issue. This means that we can not only share information quickly and efficiently. quicker.2 Communication With the help of information technology. The internet has also opened up face to face direct communication from different parts of the world thanks to the helps of video conferencing.1. This in turn increases productivity which ultimately gives rise to profits that means better pay and less strenuous working conditions.1 ADVANTAGES OF INFORMATION TECHNOLOGY 7. ready to be recalled if the customer calls again. but it has allowed the world's economy to become a single interdependent system. and more efficient.1 Globalization IT has not only brought the world closer together. more focused experience and the company benefits from improved productivity. The customer has a better. 7. but we can also bring down barriers of linguistic and geographic boundaries. We can now communicate with anyone around the globe by simply text messaging them or sending them an email for an almost instantaneous response. 7.1. communication has also become cheaper.3 Cost effectiveness Information technology has helped to computerize the business process thus streamlining businesses to make them extremely cost effective money making machines. . The entire interaction is stored in the CRM system.

making purchases from different countries easier and more convenient. Systems analyzers. and allow for the exchange of views and ideas.6 Creation of new jobs Probably the best advantage of information technology is the creation of new and interesting jobs. 8. thus increasing awareness and reducing prejudice.1. people are now worried about their once private information becoming public knowledge.1. if he or she wishes for their job to be secure. This means that a business can be open anytime anywhere.1Unemployment While information technology may have streamlined the business process it has also created job redundancies. it has also bought along privacy issues. DISADVANTAGES OF INFORMATION TECHNOLOGY 8. This means that one has to be in a constant learning mode. 7.2 Privacy Though information technology may have made communication quicker. . 8. This means that a lot of lower and middle level jobs have been done away with causing more people to become unemployed. It also means that you can have your goods delivered right to your doorstep with having to move a single muscle.3 Lack of job security Industry experts believe that the internet has made job security a big issue as since technology keeps on changing with each day.4 Bridging the cultural gap Information technology has helped to bridge the cultural gap by helping people from different cultures to communicate with one another. 7. Hardware and Software developers and Web designers are just some of the many new employment opportunities created with the help of IT. Computer programmers.1. downsizing and outsourcing. From cell phone signal interceptions to email hacking.7. easier and more convenient.5 More time IT has made it possible for businesses to be open 24 x7 all over the globe.

with English becoming the primary mode of communication for business and everything else. dress and behave.8.888 . Worldwide IT spending forecast[41] (billions of U.S.007 Telecom services 1. dollars) Category 2014 spending 2015 spending Devices 685 725 Data center systems 140 144 Enterprise software 321 344 IT services 967 1.748 3.635 1.4 Dominant culture While information technology may have made the world a global village.668 Total 3. For example it is now argued that US influences how most young teenagers all over the world now act. it has also contributed to one culture dominating another weaker one. Languages too have become overshadowed.