1.0 Introduction
Insurance is a contract for payment of a sum of money to the person assured on the happening of the event insured against. Usually the contract provides for the payment of an amount on the date of maturity or at specified dates at periodic intervals or at unfortunate death, if it occurs earlier. Among other things, the contract also provides for the payment of premium periodically to the Corporation by the assured. Insurance is universally acknowledged to be an institution which eliminates 'risk’, substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of death of the breadwinner.
Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount 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 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. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated.
Insurance involves pooling funds from many insured entities (known as exposures) to pay for the losses that some may incur. The insured entities are therefore protected from risk for a fee, with the fee being dependent upon the frequency and severity of the event occurring. In order to be insurable, the risk insured against must meet certain characteristics in order to be an insurable risk. Insurance is a commercial enterprise and a major part of the financial services industry, but individual entities can also self-insure through saving money for possible future losses.
1.1 Background Of Study
We look back in history at who first felt the need for a guarantee against loss, and who gave them that guarantee. Way back in Babylonian times, around 2100 B.C.(Frank J. 2008), the Code of Hammurabi was the first basic insurance policy. This policy was paid by the traders in the form of a loan to guarantee the safe arrival of their goods by caravan. Of course, caravans faced the same kind of perils our transportation industry faces today − like robbery, bad weather and breakdowns.
Now the insurance industry was growing to huge proportions. The companies, though competitive, worked together to create productive systems that could be used throughout the industry. They needed to keep up with the requirements of the increasing amount of laws governing insurance. For example, the Workmen’s Compensation Act of 1897 in Britain required employers to insure their employees against industrial mishaps. This also fostered what we know today as public liability insurance, which came strongly into play when the automobile arrived on the scene.(Brown RL. (1993).
Brown RL 1993 also said that in the 19th century, many societies were founded to insure the life and health of their members. Fraternal orders were created to provide low-cost insurance strictly for their members. Today, many of these fraternal orders and labor organizations still exist. Most employers offer group insurance policies for their employees, providing them with life insurance, sickness and accident benefits, and pensions.
Now insurance was the accepted thing to do. Everybody needed to protect themselves against the many risks in life. Farmers wanted crop insurance. People wanted deposit insurance at their banks. Travellers wanted travel insurance. Everybody turned to insurance companies to give them peace of mind. And really, isn’t that what insurance is − the paying of a premium to protect against some form of loss. This project is aimed at automating the insurance service.
1.2 Statement Of The Problem
Tracking a policy and tracking the performance of sales force in insurance companies have become methodical and almost flawed in the manual system of tracking and evaluation of sales force performance. Lead distribution and tracking need to be more systematized on computerized platform of insurance serviceapplication. After studying the insurance company and their services, I found the following problems:
- It is hard to centralize the core information of policy holders because the manual workload high, thus the chances of error is high.
- The manual system administration does not ensure complete control over the database thus control over all sorts of fraudulent activities cannot be ensured.
- The intra-network and coordination between different departments of an insurance business isineffective and time consuming
- Poor data management and processing.
1.3 Objective Of The Study
After analyzing the above problem, I noted that the solution will be an online application that will address the problems mentioned above. Therefore among the objectives of this study are to provide a system that will:
- Not only save time and money, but also enable the buyers to compare the terms and premium amount of different insurance service providers.
- Ensure speed, accuracy and effective cost control. People can access the twin benefits of quick accessibility and minimum paper work.
- Centralize the core information of policy holders and reduces manual workload, thus minimizes the chances of error
- Ensure complete control over the database thus controls all sorts of fraudulent activities
- Ensure better data management and processing in comparison to conventional and manual processing.
1.4 Significance Of Study
This project study has several significance that we can attest to. This section provides insight into the significance of this study.
This significance of the proposed system are:
Removal of uncertainties:
Insurance Company takes the risks of large but uncertain losses in exchange for small premium. So it gives a sense of security, which is real gift to the business man. If all uncertainty could be removed from business, income would be sure. Insurance removed many uncertainties and to that extent is profitable.
Stimulant of business enterprise:
Insurance facilitates to maintain the large size commercial and industrial organizations. No large scale industrial undertaking could function in the modern world without the transfer of many of its risks to insurer. It safeguards capital and at the same time it avoids the necessity on the part of industrialists. They are therefore free to use their capital as may seem best. An online application helps them to this.
Promotion of saving:
Saving is a device of preparing for the bad consequences of the future. Insurance policy is often very suitable way of providing for the future. This type of policy is found particularly in life assurance. It promotes savings by making it compulsory which has a beneficial effect both for the individual and nation.
Correct distribution of cost:
Insurance helps to maintain correct distribution of cost. Every business man tries to pass on to the consumer all types of costs including accidental and losses also. In the various fields of Insurance such losses are correctly estimated keeping in view a vast number of factors bearing on them. In the absence of insurance application services, these losses and costs would be assessed and distributed only by guess work.
1.5 Scope Of Study
The system was restricted to the following areas during the development. The system provides only five types of Insurance services, which include Life Insurance, medical Insurance, motor Insurance, home Insurance and travel Insurance. There are other types of insurance which it doesn’t support. New Users can access the site so as to get information online. An existing policyholder can view his policy details. The web site provides information about the new strategies and subsidiary Schemes of the company. All other types of insurance like breast insurance is beyond the scope of this research work.
1.6 Limitations Of The Study
Some setbacks were encountered during the research. These include:
- Lack of quality textbooks or materials on online administration and insurance policy.
- Financial difficulties due to the economic situation in Nigeria also posed a major constraint this research work because there was no enough fund to carry out a very vast research on other forms of insurance.
- Inconsistence power supply in Uli, which hinders the development of the program.
- Limited time for thorough research.
1.7 Definition Of Terms
Insurance:
This is a financial protection against loss or harm: an arrangement by which a company gives customers financial protection against loss or harm such as theft or illness in return for payment premium.
Casualty:
Liability or loss resulting from an accident.
Liability:
Broadly, any legally enforceable obligation. The term is most commonly used in a pecuniary sense.
Liability Insurance:
Insurance that pays and renders service on behalf of an insured for loss arising out of his responsibility, due to negligence, to others imposed by law or assumed by contract.
Dividend:
The return of part of the policy’s premium for a policy issued on a participating basis by either a mutual or stock insurer. A portion of the surplus paid to the stockholders of a corporation.
Death Benefit:
The limit of insurance or the amount of benefit that will be paid in the event of the death of a covered person.
Insurance Quote:
It is an estimate of the cost of your insurance. Depending upon the type of insurance you are buying the final cost may be higher or lower than the estimate.
Policy:
Policy is a course of action: a program of actions adopted by a person, group, or government, or the set of principles on which they are based. In this context, it is the set of actions adopted by the insurance firm.
Web Portal:
This is a link page, presents information from diverse sources in a unified way.
SSADM:
Structural system analysis and design methodology.
1.8 Organization Of Work
Chapter one:
Insurance service. I also provided the problem that led to the development of the system. The objectives of the study, significance of study, scope of study, limitation of study.
Chapter two:
Literature review of insurance service, basically what people have done on the topic.
Chapter three:
The research methodology, the step followed and analysis of the existing system.
Chapter four:
The design and implementation of the system, the data dictionary, input-output specification, table format/structure, hardware
Chapter five:
Recommendation and future development; Summary, conclusion and then references.
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