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Managing
Ebusiness Risk Effectively
--Madan
Lal Bhasin
The
growth of the Internet, globalization of trade, and the rise
of information economies have remodeled the role of information
systems in business. Along with the introduction of many new
benefits and opportunities, ebusiness has created a new set
of challenges. As organizations open their doors to employees,
partners, customers and suppliers, to provide deeper access
to sensitive information, the risks associated with ebusiness
increases. It has undoubtedly increased the amount of confidential
information at risk, which can lead to financial and reputation
loss. Thus, a wellstructured information risk methodology
is a must, especially for big corporates. The reality of ebusiness
possesses several threats like identity theft, spyware, cyber
extortion, etc. With the increasing threats and corporate
governance requirements, the need for securing corporate information
is of utmost importance for the Chief Information Officer
(CIO) and board of directors. Businesses, therefore, need
to be aware of the new cyber threats and the measures to mitigate
the repercussions of such events optimally. Adding to the
challenge of securing information is the increasing push for
corporate governance and adherence to legislative requirements.
Failure to provide privacy, and noncompliance with IS audit
and internal controls could result in penalties like a large
fine or even a jail term for executives; and also, cause possible
threats to the viability and reputation of a corporation.
Laws such as GLBA, HIPAA, and the European Data Directive
include requirements for the privacy and security of information.
Without the ability to access information or trust in its
integrity, organizations cannot do business. Governments and
industries worldwide must join together in a big way to actively
protect critical infrastructure and information systems that
consolidate our economy.
©
2006 IUP . All Rights Reserved.
Economic
Importance of Life Insurance Reserves over Premiums
--Subir
Sen
Life
insurance products play an important role in both the developed
and developing countries in channelizing savings into investment,
either because of strict regulations put forward or for the
expectation of higher returns from the securities, and other
financial markets. In the modern era, high returns obtainable
on longterm assets and the saving component stimulated by
fiscal incentives, has become the most favourable argument
for the growth of life insurance business. The quantum growth
of insurance business in the postliberalization era motivates
this paper to incorporate some of the important economic implications
of growing life insurance business, often overlooked in a
general discussion of savings. This paper makes a crosscountry
comparative analysis of insurance density, insurance penetration
and life insurance premium of selected countries to understand
the development and importance of the life insurance market.
The study concludes that there is a steady growth of life
insurance business in India but the selected developed countries
have a higher percentage of life insurance premiums in the
gross domestic savings. The importance of premium figures
often gives a wrong picture of the insurance business as compared
to `insurance reserves'. The difference between premium and
insurance reserve is presented along with the factors that
affect the growth of insurance reserves. Taking two emerging
economies in terms of prospective insurance business and comparing
premium, reserves, GDS, penetration and density figures with
a developed economy, we obtain striking results. Given the
population projections along with the liberalization of markets
in the selected emerging economies, the potential for insurance
growth lies more in these economies compared to the selected
developed country.
©
2006 IUP . All Rights Reserved.
Bancassurance in Life Insurance in India: The Brick and Mortar
Model
--Mukesh Kumar Barua
In
a country of over a billion people, mass marketing may be
a profitable and costeffective option for gaining market
share. Therefore, identifying the right life insurance distribution
channels to harness the full potential of the market is imperative.
Bancassurance is an instant channel to reach out to a large
number of customers and access a wide base through the network
across the geographical span of the country. This paper deals
with the scope of bancassurance in the Indian life insurance
industry, which has been operating only through agents until
now and aims to evaluate the ways in which distribution function
is changing with increase in competition and development of
new distribution channels like banks, brokers, internet, corporate/institution.
It also deals with the challenges in distribution; growth
potential; the benefits to insurance companies; the benefits
to banks and customers; the critical success factors; the
manner in which companies select banks; international experiences;
and the future of bancassurance in India.
©
2006 IUP . All Rights Reserved.
Rising
Healthcare Expenditures: A Demandside Analysis
--Babu Nahata,
Krzysztof Ostaszewski and Prasanna Sahoo
In
this paper, we consider a utilitymaximization model for healthcare.
On the basis of the equilibrium conditions derived for patients
and the providers of the medical service, we evaluate
the importance of costsharing between the patient and the
third party, and provide an explanation for the rising medical
expenditures. We effectively assume that some form of the
thirdparty payer is always involved in the healthcare market
and this involvement has significant consequences for the
incentives of both consumers and providers of healthcare.
The proposed demand specification explains why the empirical
estimates of the price elasticity of demand for medical services
could exhibit a wide range. We analyze how medical insurance
can result in market failure and evaluate ideas that can correct
some of the distortions in the resource allocation for medical
services. Some guidelines also emerge for a national health
insurance policy in this paper.
©
2005 The Western Risk and Insurance Association. This paper
was earlier published in the Journal of Insurance Issues,
Vol. 28, No.1 (Spring, 2005), pp. 88102. Reprinted with permission.
Results
of Liberalized India's Insurance Sector: Challenges and Opportunities
-- D
Chennappa
The
insurance industry is one of the fastest growing industries
in the country, and is growing at a rate of 26% per annum.
The outcome of liberalization over a period of five years
has been positive in terms of the premium underwritten and
the annual growth rate. Private life insurers have captured
26% of the market share. While bancassurance being in its
nascent stage has made little progress in improving penetration
of insurance business, the proposed government's move to withdraw
the guarantee of the 16 crore policies of LIC of India may
prove to be a hurdle for the growth of the insurance business
in the coming years. With more than 60% of the rural people
uncovered, the role of private insurance players becomes all
the more significant.
©
2006 IUP . All Rights Reserved.
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