Page 263 - DMGT303_BANKING_AND_INSURANCE

Banking and Insurance

Notes IBM eServer iSeries. This makes iSeries the most preferred platform, in the Insurance
Services Sector in India.

Details
Application CSC application for insurance
O.S i5

Platform S/390, AS/400 (iSeries)
Netfinity (xSeries)
The result - Life made easy

The benefits of server consolidation include - low total cost of ownership, increased
availability, better manageability, enhanced scalability and freedom from redundancy.

The robust and secure IT infrastructure deployed by IBM enables Sahara to cut down the
go-to-market time substantially and offer new customised products that they are planning
to launch into their market soon.
Source: http://www-07.ibm.com/in/casestudies/case_sahara.html

12.17 Summary

Risk is one of those words, which are capable of a number of interpretations, and seems to fit in
to various contexts. Risk is nothing but the uncertainty of loss. Almost everything that the
businessman does, it is in an uncertain environment. The second thing that encompasses us in
the study of risk is its quantification. In measuring risk we are really trying to place some value
on our belief as to the likelihood that some event will or will not take place.

Can we substitute "chance" for "uncertainty"? No, chance is the expectation of a good or favourable
result.
Risk may be defined in various ways and from various angles. It may be pure, fundamental,
speculative, personal, business related, fidelity risk and so on. Whatever the kind of risk it
should be identified, quantified and must be handled properly. This can be done through the
formal technique of risk management. Risk management is concerned with direction of
purposeful activities towards the achievement of individual or organizational goals. Risk
management may be defined as "the identification, analysis and economic control of those risks
which can threaten, the assets or earning capacity of an enterprise." A risk management
organization shall be headed by a Director assisted by a risk management analyst(s). Risk
management team may comprise of an insurance manager, safety, health and loss prevention
manager, claims manager, and a security manager.

In legal terms, insurance is a contractual agreement whereby one party (insurer) agrees to
compensate another party (insured) for losses. This document, popularly known as insurance
policy, creates certain rights and responsibilities for both insurer and insured. The insurer has
the right to collect premium and specify terms and conditions subject to which insurance coverage
is available. The insurer is responsible to pay claims as and when lodged by the insured subject
to terms of contract. Similarly, the insured is bound to pay the prescribed premiums and also
comply with terms and conditions prescribed by the insurance company. He has a right to
collect payment (claim) from the insurer, if covered loss occurs.

Insurance is a very beneficial financial and economic service. As a great financial intermediary,
the insurance sector collects national household savings and invests them in productive avenues,

258 LOVELY PROFESSIONAL UNIVERSITY