Information Technology In Insurance Industry Commerce Essay


Insurance in India can be traced back to the Vedas. For instance, yogakshema, the name of Life Insurance Corporation of India's corporate headquarters, is derived from the Rig Veda. The term suggests that a form of "community insurance" was prevalent around 1000 BC and practiced by the Aryans.

Burial societies of the kind found in ancient Rome were formed in the Buddhist period to help families build houses, protect widows and children. Bombay Mutual Assurance Society, the first Indian life assurance society, was formed in 1870. Other companies like Oriental, Bharat and Empire of India were also set up in the 1870-90s. It was during the swadeshi movement in the early 20th century that insurance witnessed a big boom in India with several more companies being set up.

As these companies grew, the government began to exercise control on them. The Insurance Act was passed in 1912, followed by a detailed and amended Insurance Act of 1938 that looked into investments, expenditure and management of these companies' funds.

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By the mid-1950s, there were around 170 insurance companies and 80 provident fund societies in the country's life insurance scene. However, in the absence of regulatory systems, scams and irregularities were almost a way of life at most of these companies. As a result, the government decided nationalizes the life assurance business in India. The Life Insurance Corporation of India was set up in 1956 to take over around 250 life companies.


Insurance has a long history in India. Life Insurance in its current form was introduced in 1818 when Oriental Life Insurance Company began its operations in India. General Insurance was however a comparatively late entrant in 1850 when Triton Insurance company set up its base in Kolkata. History of Insurance in India can be broadly bifurcated into three eras: a) Pre Nationalisation b) Nationalisation and c) Post Nationalisation. Life Insurance was the first to be nationalized in 1956. Life Insurance Corporation of India was formed by consolidating the operations of various insurance companies. General Insurance followed suit and was nationalized in 1973. General Insurance Corporation of India was set up as the controlling body with New India, United India, National and Oriental as its subsidiaries. The process of opening up the insurance sector was initiated against the background of Economic Reform process which commenced from 1991. For this purpose Malhotra Committee was formed during this year who submitted their report in 1994 and Insurance Regulatory Development Act (IRDA) was passed in 1999. Resultantly Indian Insurance was opened for private companies and Private Insurance Company effectively started operations from 2001.


  India with about 200 million middle class household shows a huge untapped potential for players in the insurance industry. Saturation of markets in many developed economies has made the Indian market even more attractive for global insurance majors. The insurance sector in India has come to a position of very high potential and competitiveness in the market.  Indians, have always seen life insurance as a tax saving device, are now suddenly turning to the private sector that are providing them new products and variety for their choice.

Consumers remain the most important centre of the insurance sector. After the entry of the foreign players the industry is seeing a lot of competition and thus improvement of the customer service in the industry. Computerisation of operations and updating of technology has become imperative in the current scenario. Foreign players are bringing in international best practices in service through use of latest technologies

The insurance agents still remain the main source through which insurance products are sold. The concept is very well established in the country like India but still the increasing use of other sources is imperative. At present the distribution channels that are available in the market are listed below.

Direct selling

Corporate agents

Group selling

Brokers and cooperative societies

Banc assurance

Customers have tremendous choice from a large variety of products from pure term (risk) insurance to unit-linked investment products. Customers are offered unbundled products with a variety of benefits as riders from which they can choose. More customers are buying products and services based on their true needs and not just traditional money back policies, which is not considered very appropriate for long-term protection and savings. There is lots of saving and investment plans in the market. However, there are still some key new products yet to be introduced - e.g. health products.

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  The rural consumer is now exhibiting an increasing propensity for insurance products. A research conducted exhibited that the rural consumers are willing to dole out anything between Rs.3,500 and Rs.2,900 as premium each year. In the insurance the awareness level for life insurance is the highest in rural India, but the consumers are also aware about motor, accidents and cattle insurance. In a study conducted by MART the results showed that nearly one third said that they had purchased some kind of insurance with the maximum penetration skewed in favor of life insurance. The study also pointed out the private companies have huge task to play in creating awareness and credibility among the rural populace. The perceived benefits of buying a life policy range from security of income bulk return in future, daughter's marriage, children's education and good return on savings, in that order, the study adds.


Insurance Policy India provides the clients with the details required for the coverage in the policy, date of commencement of the policy and their adopting organizations. It plays a important role in the Indian insurance sector.

The Insurance Policy India is regulated by certain acts like the Insurance Act (1938), the Life Insurance Corporation Act(1956), General Insurance Business Nationalization) Act(1972), Insurance Regulatory and Development Authority IRDA) Act(1999). The insurance policy determines the covers against risks, sometime opens investment options with insurance companies setting high returns and also informs about the tax benefits like the LIC in India. There are two types of insurance covers:

1. Life insurance

2. General insurance

Life insurance - this sector deals with the risks and the accidents affecting the life of the customer. Alongside, this insurance policy also offers tax planning and investment returns. There are various types of life Insurance Policy India:

Endowment Policy

Whole Life Policy

Term Life Policy

Money-back Policy

Joint Life Policy

Group Insurance Policy

General Insurance - this sector covers almost everything related to property, vehicle, cash, household goods, health and also one's liability towards others. The major segments covered under general Insurance Policy India are:

Home Insurance

Health Insurance

Motor Insurance

Travel Insurance


Name of the Player

Market share (%)



























Risk protection is provided by this sector only.

Insurance having currently good market.

Tax exemption.

The variety of products is increasing.

Insurance to build close relationship with customers.

Good amount of R&D into insurance

200 million households waiting for householder's insurance


Unable to convenience the people about the products.

Insurance companies instability

Limited working capital

Products or services similar to competitors.

Higher tax nets for the middle class


Technology is improving paperless transaction are available.

Busy life, customer need flexible and customizable policies.

Like mobile banking mobile insurance could be a hit.

New innovations in technology-measuring weather variables.


Weather cycles.

New substitute product emerging.

Increasing expenses and lower profit margins with hard on the smaller agencies and insurance companies.

Government regulations on issues like health care terrorism can quickly change the direction on insurance.


The present scenario is such that the products sold with the help of Internet. The technological advancement is such that force the companies to take such steps. Still the full-fledged use of Internet is not done in our country. As suggestion earlier the Internet based life insurance will help the companies to reduce the transaction cost and time. At the time it can improve the quality of service to its customers, which is the mission of the company.

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Internet can be an effective medium for educating the consumers about insurance. It serves as a single window for disseminating product, process and procedural information to the consumers.

Product development and target marketing through the Internet: with increase in the number of insurance companies there will be a need for market segmentation and subsequently product designed for each of them. In such a scenario Internet can be a effective channel for pushing product specific information to a particular market segment. Consumer feedback about a particular product as well as suggestions for different types or covers can also be generated through the Internet

1. E-business insurance in India: -

The Internet has played a vital role in transforming the business of the 21st century. Computers are now being used extensively for creating a storing data, information with the help of complex and sophisticated technological tools in every kind of business. This change having been widely accepted, the advantages are numerous such as fast processing improved. Efficiency, cost reduction among several other benefits.

2. Maintaining the database:-

The most important factor that is affecting the insurance industry is the marinating the database of the customers. The insurance industry having a huge list of the customers.

In order to maintain it in manual format it is really the work of stupidity. With the change in time the computers has taken the work of this things. Thus with the development of the technology it has becoming possible to maintain such huge database very easily. A person can switch over to the computer and get the details of the customer very easily. Thus maintaining the database has really become easy due to the development in technology.

3. E-Commerce in the Indian Insurance Industry

With the advent of the Internet, online processes are replacing conventional models in our society. The greatest impact in online technology has been achieved by e-commerce. E-commerce is attractive both to buyers and sellers as it reduces search costs for buyers and insventory costs for sellers. In this paper we investigate the impact of e-commerce on the insurance industry in India. The recent growth of Internet infrastructure and introduction of economic reforms in the insurance sector have opened up the monopolistic Indian insurance market to competition from foreign alliances. We study the evolving scenario in the insurance industry in India and identify the features of online insurance that improve the conventional insurance model and thus, makes it more attractive for the Indian insurance industry to go online.



Initially, in the late 1950's the insurance companies used Unit Record Machines (Electro Magnetic Machines) to process data punched into cards. Computers were introduces in the mid 1960's and by the 1980's the Unit Phased Machines were phased out and the entire process was computerized. This brought about greater efficiency and quick service delivery


Today, the internet has completely changed the service delivery process. Internet is today used to even sell insurance policies. Internet is, in fact, proving to be one of the widely used distribution networks for selling insurance policies. Also internet is used for sending premium notices to policy holders through e-mails

Companies like LIC (, ICICI ( all have websites from which people can get the information about their products, prices, various schemes, and lots of other information. People can also purchase the product through this website.

Electronic Clearance Service (ECS):

Almost all the big organizations today provide the ECS facility to its customers. A policy holder having an account in any bank which is a member of the local clearing house can opt for ECS debit to pay premiums. The advantage here is that once the option is exercised, the policy holder need not visit a branch for paying the premium or collecting the receipts. On the day indicated by the policy holder, the premium amount will be directly debited to the bank account of the policyholder and the receipt will be issued by the designated branch office.

Call Centres and SMS services:

Almost all the insurance companies have their own call centres which cater to the phone based queries of the policyholders. This service is 24x7 and they have the Interactive Voice Response (IVR) systems at all the branches


LIC has been one of the pioneering organizations in India who introduced the leverage of Information Technology in servicing and in their business. Data pertaining to almost 10 crores policies is being held on computers in LIC. We have gone in for relevant and appropriate technology over the years.

1964 saw the introduction of computers in LIC. Unit Record Machines introduced in late 1950's were phased out in 1980's and replaced by Microprocessors based computers in Branch and Divisional Offices for Back Office Computerization. Standardization of Hardware and Software commenced in 1990's. Standard Computer Packages were developed and implemented for Ordinary and Salary Savings Scheme (SSS) Policies.


The online Insurance Management System Software solution is a fully automated and integrated policy processing system for both personal and commercial insurance carriers. It is a scalable, reliable, and cost-effective solution for carrying out all business-critical insurance processing functions

Insurance Software Solutions provider for all segments of the insurance community and insurance product management. The web based Insurance Management System Software solution helps to solve long-standing time-to-market challenges. The web based insurance management system expertise and solution can dramatically lessen the cost of policy ownership services.


Insurance Policy Administration System

Insurance policy administration system consists of a mathematical notation that captures the relationship between policies and objects and the entities that manage policies for those objects.

The Insurance policy administration system is consisting of a number of policy administration domains.

The domains are arranged in a hierarchy, representing descending levels of authority.

Claims Management Systems

This system ensures claims are processed fast and efficiently. Operator flexibility is the key, and we aim to improver operator productivity while processing claims.

Real-time status for quick resubmission and faster reimbursements.

Unique claim aging tool shows thousands of claims status in one view.

Insurance Claims System uses electronic filing system to primary and secondary payers.

Each claim is scrubbed with up-to- date Medicare rules.

This Claim Processing System helps in quick resubmission for claim

Insurance Agency Management System

Insurance Agency Management System facilitates an insurance company's ability to address relationships with its product distribution channels.

This system helps in managing current Agencies, can add New Agencies or Delete Current Agencies.

Insurance Agency Management System is the solution that delivers to manage and grow your insurance agency to assist day-to-day management of your agency. Agency management utilized for small business, individual or enterprise business

Insurance Agent Management System

Insurance Agent Management System maintains Multiple Agents from Multiple Agencies, keep the track of their activities from Policy Registration to Claim processing.

All their data, their commission, their policies status updates, etc. are taken care by this module.

This Insurance system helps in smooth functioning of the Agents working and makes the processes faster and efficient.

Policy Management System

Policy registration is intended to be a vehicle for the exploration and discussion of policy issues and is aimed in particular at enhancing communication between health policy researchers, legislators, decision-makers, and professionals concerned with developing, implementing, and analyzing health policy.

Policy renewals and policy cancellation can be managed by the insurance policy management system

User Management System

A new user registers by filling in a form on your web-site.

If necessary, the new user is first place in a waiting list until you approve the new user.

After adding the user, the user can login to the system with his or her username and password to make changes.

You can use overviews of users for mailing purposes etc..

User Management System manages all the users of the system i.e. Customer, Administrator or Agents.

It keeps the track of thee the activities they performs, their data, their access information, etc.

Endorsements Management System

Endorsements to a title insurance policy are addenda or attachments to the policy that may correct or modify a previously issued title policy, or alter or modify the provisions of the exceptions, conditions and stipulations of the title policy so that the insured party receives greater coverage than would exist under the terms of the unendorsed title policy.

Data import / Export system

It handles large amounts of data to import and export it securely.

It does processing and management of large and sensitive data compression/decompression and/or encryption/decryption allowing the exchange of data through the network with high performance and stability, exchange of data among Web server(s), business application server(s) and database server(s) and account information including user passwords

Policy Registration and Quotations Engine

Policy registration is intended to be a vehicle for the exploration and discussion of policy issues and is aimed in particular at enhancing communication between policy researchers, legislators, decision-makers, and professionals concerned with developing, implementing, and analyzing health policy.

Policy quotations engine is an on demand quotation management feature coupled with detailed profit optimization and approval management engines.

With quotation engine you can automate the sales and services processes that are currently being done using a hybrid of spreadsheets, documents and emails with little to no process control.

When you have completed your quotation you can use the engine to seek approvals for non- standard pricing and/or terms and conditions. Discounts and loading management.

Insurance Administration Management System

Insurance Administration Management system can manage multiple administrators and can have the track of the right assigned to them.

It takes care that all the Administrators function with the system as per the rights assigned to them ad they can get their work done in efficient manner.

Customizable and strong administration system.

Insurance Sales Management can be managed by insurance sales system.

Content Management System Module

Content Management System is used for managing the capture, storage, security, revision control, retrieval, distribution, preservation and destruction of documents and content.

Content Management System especially concerns content imported into or generated from within an organization in the course of its operation, and includes the control of access to this content from outside of the organization's processes.

Insurance Document Management System

It's important to maintain documents so that you can get to them faster, and easily. Even IT offers document management solutions for easy maintenance of your policies, endorsements, quotes, binders and the like. You can design your templates in common word processing tools, and the document management system will integrate and process these templates to generate and maintain documents. The documents can be retrieved at any time and are indexed in a database for quick searches.

Insurance Document Management System is a secure file upload management system with built-in audit tracking, and is a plug-in extension to the Power Central Portal.

This System will maintain the generation of the various reports which will be provided to the users as per the requirement.

The reports like Modification Report, Policy Management Report, Payments Received Report, Agent commission report, etc.

Insurance Accounting and Automation

Insurance accounting is quite a complicated task, given the fact that there are so many issues with regulation, taxes, filing, commissions, brokers/underwriters, endorsements etc. We can build applications of insurance accounting systems and insurance billing systems that automate part of this task for you and help build better and more flexible solutions.

Workflow solutions

Workflow solutions that will ease the task of issuing claims, policies, reimbursements, payments etc. You can enforce hierarchical constraints and automate workflow, thereby ensuring that all your checks and balances are in place.


Insurance is a highly regulated industry, so audit controls are very important. For this purpose, Radix can write audit control solutions customized to your purpose that will help you track and control business issues within your organization

Business Intelligence

Reporting and charting solutions that will make sense of your data. We can help you analyze your past data for better decision-making and help you make more informed decisions.

Online Data Back-up System

Online Back-up System is used to have the backed of the data on another server so that in case Original Data get Damage, Lost, etc. then the data is available for work.

This system helps in the Real Time Data Backup and maintains the data for the future purpose.

It also facilities the data back-up at other Geographical location.

The benefit of Online Insurance Management System

Online Back-up System is used to have the backed of the data on another server so that in case Original Data get Damage, Lost, etc. then the data is available for work.

This system helps in the Real Time Data Backup and maintains the data for the future purpose.

It also facilities the data back-up at other Geographical location

The benefit of Online Insurance Management System

Radix is the right technology choice for the vast majority of insurance-selling organizations on line. We have been closely associated with leading insurance players. Radix is essential for successfully managing and growing your business. Our web based insurance management system can manage your insurance business perfectly.

Our solution focus is on the following benefits.


Speed- to-market

Cost reduction




Business process flexibility


WEB SITES insurance industry


Life insurance vol 1 ICFAI PRESS 2002

Life insurance vol 2 ICFAI PRESS 2002

Insurance industry Emerging Trends ICFAI PRESS 2002

Insurance law and regulation vol 1ICFAI PRESS 2002


Economic times

Times of India

Business standard


Life-Insurance , by Mc GILL

Insurance Industry by ICFAI Publication

Insurance in India