Strategic Info Trends in Auto Insurance
Every other company is striving to cope with ever-changing technology, which has also created fierce competition among companies. However, the effect of technology has advantaged the consumers in that companies need to provide quality services. Otherwise, they lose customers to their competitors. Precisely, insurance companies are among the most affected by technology, especially car insurance. For example, the introduction of self-drive requires the insurance company to keep informed of such cars, as well as have a sound tracking system. Inversely, many clients would like to access their insurance status and make any changes or updates online without the need to visit insurance offices. On the other hand, insurance companies should also move with the technology to update their operations to meet customer needs, such as the mode of service delivery and management of clients’ complaints. This paper seeks to find out how information systems work in car insurance companies and, more importantly, the current strategic information system trends in auto insurance firms.
Literature review
Drivers are prone to unforeseen accidents which can injure passengers, damage the vehicle, or cause damage to the surrounding, hence the need for insurance cover for such losses. On that note, the insurance companies provide the car owner with different policies for them to choose and pay for what one feels satisfied with so that in case of accidents, the insurance company can compensate. Therefore, insurance cover becomes valid after both parties agree on the policy term and policyholder pay premiums, which leaves the insurer with compensation responsibility in the event an accident occurs. Ameen and Ahmad (2017) reveal that insurance company uses information systems software to track the account status, compliance of clients and automatic sent signals to clients and perhaps deactivate such cover if the clients do not comply. Additionally, such systems help in combating crime and fraud because it can easily track information from start to the end. Subsequently, companies should not only implement such technologies but ensure they are implemented in the right way to avoid misuse or failed intention. According to Lamberti, Gatteschi, Demartini, Pelissier, Gomez and Santamaria (2018), insurers should implement information systems to meet customers’ needs as well as increase the coverage. For example, they can use mobile applications as a marketing tool.
Consequently, technology has brought significant impacts on business operations. As claimed by Tarhini, Al-Dmour and Obeidat (2015), business managers from other departments are working hand in hand with information technology departments to increase the profitability of the company through strategies such as online advertising. Additionally, information technology has opened several business platforms, which companies capitalize on to reach more clients and also modify the mode of service delivery. Besides, it has facilitated the improvement of business operation whereby managers can do extensive research from various parts of the world on the trending opportunities and strategies to improve their operations, as well as share the information with colleagues from one department or location to the other without physical movement which saves cost and time.
Nevertheless, the impact of technology, particularly information systems, has influenced many auto insurance companies to transform from their traditional ways of operating their businesses. Fan, & Xu (2019), claim that due to the introduction of autonomous cars that are likely to dominate the transport industry soon, insurance companies should develop strategies more on information systems to cope with the situation and avoid losses associated with driverless cars. On the other hand, the introduction of driverless vehicles will automatically reduce the premium expenses, which is suitable for clients but is the critical point of revenue generation in insurance companies. Therefore, such companies should install proper information systems to keep updated on the progress of such cars, as well as find out other avenues to keep the business going, such as capitalizing on mobility management firms. Concurrently, Lamberti et al., (2018) reveal that devices such as mobile apps and sensors are highly gaining acceptance in the market to meet on-demand customer need. For example, experts modify sensors in a way that they can assess the status of the vehicle and onboard passengers at any time the clients require the cover, which some insurers have adopted to meet such needs. Subsequently, the introduction of information technology opened a window for insurance companies to design self-controlling systems that integrate information concerning a client, policy, price, and damage to quickly analyze them and arrive at the best solution, which has reduced cases of financial biases. Consequently, companies use such technology to reduce the labour cost since the work that could require several employees or prolonged time can be done by one information technology staff at a minimal time and give credible results.
Subsequently, as auto insurance adjust to adopt technology changes such as sensor and autonomous cars, it should also beef-up on the trending cyber-security issues. As claimed by Morris, Madzudzo and Garcia-Perez (2018), insurance companies hold sensitive information of clients as well as the status of their vehicles, which require maximum protection from an unauthorized third party. Criminals have taken advantage of technology to fraud innocent people through cyber-attack techniques such as phishing, where they extract sensitive information of clients without their knowledge. On that note, the advancement of information systems enables people to access and update their insurance covers from computing gadgets such as smartphones. On the contrary, it also opened a window for cyber hijackers, especially since people get into their insurance account away from their home network security and also expose such information in case their gadgets are stolen or lost. For example, cyber attackers can use such techniques to assess the status of the car and misdirect clients when renewing their premiums. Therefore, Insurers should find proper premiums for cybersecurity, bearing in mind that clients can as well connive with fraudsters to fraud the company.
Methodology
The researcher used a literature review research design where various scholarly studies were considered. The study reviewed the literature to formulate study questionnaires. On that account, the study used peer scholarly literature since they are assumed to be very reliable and accessible. Additionally, they pass through various tests for validity assurance. Further to clear biases in questionnaires, the researcher conducted a pilot test of those questions and settled on the appropriate questionnaires. After that, the study decided on the sample size that could give good results and manageable at the same time. Subsequently, to encourage the expression of experience and opinions, both structured and unstructured questionnaires were formulated and distributed. The researcher used the survey method to collect data and later applied both qualitative and quantitative approaches to analyze the data gathered. Therefore, the study precisely aimed at finding out more about the information system in car insurance companies. Eventually, the study analyzed the finding from two perspectives (insurer and policyholder perspective).
Findings
The research was smooth since almost all the participants participated from the start to the end. The study reveals that many people understand that insurance companies help in taking responsibility to compensate for any damage when an accident occurs. However, the car owner has to agree on the insurers’ terms/policy and pay premiums to validate such a contract. Perhaps, many people have insurance covers. However, the information system was the main point of concern, which revealed a mixed reaction, especially on the trending new information technology. Eventually, the findings from the participants were as discussed below.
Policy Holders. The study claim that the majority of participants enjoy the growth and adoption of the information system by insurers since it has reduced delays in service delivery. Additionally, through information technology, clients can access and update their accounts quickly. Importantly, claims, which are the crucial point of insurance, can be done fast and with reduced cases of fraud since the system can track every detail of the cover as well as the status of the vehicle before and after the accident. However, clients challenged the insurance firms to take advantage of trending technology, such as mobile applications, to reach many customers and their needs. Additionally, clients asked the insurer to embrace the trending technology, such as sensor devices that can assess and give timely information of the passengers and vehicle to meet the customer’s situational needs, especially with the introduction of autonomous vehicles. Lastly, insurers should beef-up cybersecurity since many clients have fallen victims of fraudsters.
Insurers. The research revealed that the new information system is advantageous to insurers now that they can conduct global research on the potential business opportunities and best approaches to expand their businesses. More so, it has enabled the insurers to reduce costs because they can store more information under one device as well as the distribution of the information does not require many employees. Further, the insurer uses mobile applications as an advertising channel to reach more customers, which has also made it easy for clients to review their insurance status. Additionally, many insurance companies have adopted the trending information system, such as sensor devices, to meet the immediate demands of their clients. However, insurance firms and brokers found the trending issue of autonomous cars and cybersecurity of great concern in that they need to move fast to adjust to the technology and find substitute avenues to counter the losses associated with such matters.
Conclusion
Vehicles are prone to accidents. Thus owner requires insurance to covers for such unforeseen damages. However, there must be a contract where the car owner accepts the insurance terms and pay premiums to validate the agreement. Insurers should implement information systems to meet the ever-changing demand of customers, as well as reduce fraud, unnecessary costs, and increase efficiency and effectiveness. Importantly, they should take advantage of the trending information system, such as mobile applications and sensors to meet the situational needs of clients and do more marketing. Lastly, insurers should use the information technology to prepare for the trending coming of the driverless car, which will highly reduce the premiums. Nevertheless, researchers need to research strategies to counter information technology con games and the risk assessment of accidents occurring between drivers and driverless vehicles.
Reference
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Fan, C. K., & Xu, X. (2019). Influences of Autonomous Cars on the Insurance Market from the
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Lamberti, F., Gatteschi, V., Demartini, C., Pelissier, M., Gomez, A., & Santamaria, V. (2018).
Blockchains can work for car insurance: Using smart contracts and sensors to provide on-
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Morris, D., Madzudzo, G., & Garcia-Perez, A. (2018). Cybersecurity and the auto industry: the
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Tarhini, A., Al-Dmour, R. H., & Obeidat, B. Y. (2015). Strategic IT-Business alignment as
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