Chapter 9: Business Needs And Information Technology Alignment

Question 1

Insurer’s Information Needs

Answer 1

Classified into three levels:

• Operational
• Managerial
• Strategic

Question 2

Operational-Level Information Neefs

Answer 2

• Customer information
• Underwriting information
• Claims information
• Accounting and financial information

Question 3

Types of Business Information Information Systems (BIS)

Answer 3

• Transaction Processing System (TPS)
• Database Management Systems (DBMS)
• Document Management Systems (DMS)
• Automated Workflow Systems
• Decision Support Systems (DSS)
• Expert Systems (ES)
• Customer-focused collection and safety systems
• Electronic and mobile commerce

Question 4

Sources of Security and Control Risks

Answer 4

Weaknesses in data security allow risks from three sources:

• Internal
• External
• Collusive

Question 5

Security Risks and Responses

Answer 5

• Destruction of data or programs
• Espionage
• Invasion of privacy
• Social networks
• Employee fraud
• Human error
• Cloud computing
• Mobile devices

Question 6

Aligning Insurer and IT Strategy

Answer 6

• Importance of IT and business strategy alignment
• Benefits and challenges
• Plan for alignment
• Metics of successful alignment

Question 7

Benefits of Aligning Insurer and IT Strategy

Answer 7

• Sustainable improvements in service level realized
• Cost reduced
• Compliance with a state’s insurance department regulations attained
• Private or privileged information protected
• Best practices standardized
• Productivity increased
• Communication enhanced
• Production workflow expedite
• Competitive advantage obtained via faster implementation of new technology

Question 8

Challenges of Aligning Insurer and IT Strategy

Answer 8

• Controlling expenses
• Changing IT or business metrics
• Clearly understanding customers’ needs
• Management financial support
• Lack of prioritization
• Lack of trust
• Overly complex IT infrastructure
• IT as a separate unit
• Lack of understanding of insurer and its needs
• Lack of understanding of IT and its capabilities

Question 9

Metrics of Successful Alignment

Answer 9

• Percentage of downtime
• Functionality
• Problem resolution