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Today's business environment is characterized by increased competition as large number of service providers compete for the market share. This phenomenon is manifested in all areas of business including the insurance industry. However, what has emerged to be the factor of success has been the question of how and when business firms employ the use of information technology to have a competitive edge over one another ( Steinbock, 2010).  The use of innovation in information technology has created a divide between the leaders and followers in world business today since technology has revolutionized many business operations thus increasing sales, business forecast, interaction and business modeling. In the field of insurance, technology has changed the direction of business, reduced operation costs and increased the marketing frontier for insurance companies like Allstate.

The use of computers and information systems has play a vital role directing various business operations of business organizations. Technology is used to perform almost everything that includes the construction of business plan to managing network security to steering Internet operations such as sales for companies. The use of computer information systems has helped in the identification and setting of both technical and business objectives in reference to the detailed accomplishment plans of business organizations. For instance, technology is increasingly being used by company's business organization to coordinate the work of staff, formulate Inclusive concepts and requirements of new business product or service and effectively assist in the management of projects.

In a nutshell, advances in the field of technology in areas of information systems and internet application has provided a platform that is increasing being adopted for use by insurance providers such as Allstate to drive their insurance operations to greater heights. However, there is more to its benefits as there are some challenges associated with technology.

Insurance the traditional way

For a long time, insurance service providers have been slow in their adoption of new and cutting-edge technology that has been so far developed into their business operations. These technologies include internet based technologies or mobile computing technologies and other information systems built for the automation of insurance operations and data handling. In some cases, the management of insurance companies have remained conservative and honored the old ways of doing business (Opper & Fersko-Weiss, 1992). However, this was not the case for all the insurance providers for a number of them adopted information systems to improve the outcomes of their business operations and increase profits.

The growing shift from the traditional way of managing insurance operations such marketing policies, interacting with customers, verifying claims among others to the use of information technology has been experienced over years as insurance companies pursue opportunities that accord them efficiency and cost cutting alternatives. As a result, a lot of differences have been felt in the insurance industry with regard to the adoption of information technology and internet platform. Presently, such technologies are envisioned to increase the market share for various insurance firms in the United States (Bureau of Labor statistics, 2010).

What information systems and the internet has to offer

There are numerous opportunities that can be realized from the implementation and use of information systems and the internet platform for any business. There are many vendors of award winning insurance business solutions that have been tailor made for insurance operations and available off the shelf. Other vendors have specialized in the development of development of rich internet application that can interactive manipulate and handle data necessary for increasing efficiency, reducing  costs and increasing ease of access to customers and staff

Impact of information technology and the internet

The adoption of information systems as well as the internet in in the insurance industry has led to significant reduction in operation costs.  The use of information technology has been characterized by the optimization of the business environment where information are sent and viewed via digital means which has transformed the nature of the office environment. At the same time, the use of digital facilities in the insurance arena has enabled companies cut on costs that could otherwise be experienced in through the purchases of stationery necessary for printing letters and other documents. Contrary to the extensive usage of huge volumes of paper, documents have been optimized across insurance enterprise.

Allen (2004) confirms that marketing is one of the most expensive and largest business expenditure that business organization incurs. With this in mind, adoption and use of internet platform for marketing has helped organization increase their marketing front and at the same time reduces the expenses in carrying out marketing over the internet. With the use the internet to market various insurance products, the insurance company has benefitted from increased business coverage as many people use internet to shop for product and services (Allen, 2004).

Before the development of appropriate technologies of sending information such as emails and instant messages, business organization relied on expensive means of sending information such as the use of traditional mailing systems. However, the present use of information technology and internet has made in possible for insurers to send instant messages and emails to their staff and clients in a cheap and thereby saving on costs.   

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Increased interaction

The insurance industry demands that insurance companies have constant and efficient interaction between the staff of the company as well as the clients and the whole market at large. Insurers have continued to adopt the use of Self-service portal which have been developed by integrating disparate systems through the use of web-service applications that has enabled the merge of different set of functionalities that were before considered different and separate. This has facilitated the linking up of customers, data and employees profiles through a single sign-on facility.

The use of self-service portals through the internet platform has had significant impacts in the overall performance of the insurance industry service providers.  The self-service portals has created an array of positive results such as

i) Increase in the  satisfaction of  insurance stakeholder  such as customers, agents and employees as self-service portals provides empowerment through the availing of useful information and providing  instant access to precise information as well as offering facilities for tracking requests being processed.

ii) With the use of self-service portal, the insurers have witnessed an increased operational efficiency and an increase in productivity of workers through the availability of consolidated information and information availability on demand.

iii) The provision of Single sign-on facility in the self-service portal has made it for insurers to increase security and reduces risks associated with old systems that could be compromised by hackers gain access to customer information on policies with wrong motives. This feature has improved the reliability of insurance firms in ensuring that the data of the data of the client are safe and free from misuse.

iv) On a higher note, the use of internet self -service portal has been associated to the increased revenue and profitability that has been achieved through sales as well as retention of clients who are willing to maintain single portfolio with the insurance firms if their choices.

Efficient collaboration

The use of information systems  by insurers has enable the achievement of unified communicational and collaboration facilities that enables  insurers to  stretch the above concept of self-service internet portals and transcend into the establishment of  unified web communication and collaboration utilities that provide more dynamic and interactive online contents and messages for the use by employees, customers and agents. Information systems that harness the power and cost effectiveness of facilities such as VOIP (Voice-Over Internet Protocol), instant messaging, and remote desktop connect tools and VPN (Virtual Private Network) have enhanced and eased the implementation of a unified communication model.

The use of such Unified communication and collaboration tool has encouraged a bidirectional real-time communications between the shareholder of insurance company and thereby increasing performance of insurance company that have adopted these technologies (Plunkett, 2009).  With the use of technology to enhance collaboration between the staff, agents and clients, insurers have been able to streamline the flow of information within the business operation ensuring that decisions are made at correct time with due factors put into place.

Additionally, the use of information systems that support virtual private network has made it possible for insurers to allow their mobile workers to use the organizations databases even while at remote location without worrying about risks associated with security of networks. As Kruegele (2007) confirms, VPN solutions are secured with encryption algorithms that makes the systems networks secure and free from security risks that can compromise the integrity of sensitive and critical information on transit. Furthermore, the use of new security technologies over the internet such as secure socket layer (SSL) has made it possible for clients to purchase insurance premiums online from providers who support online payments.  The use of such systems has therefore facilitated ease in making purchases even from agents who may be far from the clients.

Globalization of insurance services

With the growth of new insurance markets in regions of Brazil, Eastern Europe, India, and other countries offered new opportunities as well as challenges for mature insurance organizations to exploit and in order to increase their business presence in the global arena.  This opening granted by the increasing demand of insurance premiums posed serious challenges since each and every county had distinct regulatory requirement some of which are stringent and difficult to meet. However, to satisfy the need in the global arena, information systems and and the internet have come to be used to facilitate the work of agents and customers who have subscribed for a given insurance premiums.

The use of technology to provide a multichannel distribution has been one of the hall marks of technological impact in the field of insurance which has changed the traditional model of   selling and distributing insurance products. This has enabled insures to be able to execute multichannel consolidation strategies where insurance products are sold via the internet platforms. This has made it possible for eligible countries to survive to the in insurance service at abroad and locally even when not near the insurance establishments.  With people making purchases online, insurance companies like Allstate have achieved increased sales without the use of much effort in reaching the clients.

Business modeling and forecast

Through the use of information systems and the internet, many business organizations in the insurance industry have been able to develop databases which have transformed the way in which business decision are made as well as anticipating of future demands for products. This has been possible through the use of   sophisticated data warehousing solutions that offer reporting features necessary for the insurers to distribute and use their customer data in efficient manner to achieve a competitive advantage over their rivals. The establishment of data centers by insurers allow for timely and efficient perusal of data as well as the answering of questions that are related to the demands for products and services.

Availability of consolidated data in data warehouse enable schematic visualization of data using predefined data models than can inform and aid in making of decisions that may bring differences in sales and business operations for a particular named insurer. Vendors like Oracle have dedicated enterprise suites that have built in functionalities that can be used by companies to interact with real customer data and visualize potential effects upon alteration of specific variable of interest (Oracle Wiki, 2010).This allows insurers like Allstate to model and perceive likely outcomes from a particular change in business environment.

Data mining has been made possible since information system in used by insurers  have made it possible to gather and manage data while the internet has made it easier to enter the data into the information systems application even at remote locations and via internet portals. Data mining has produced great benefits to the insurance companies as they have been able to select, explore and model extensive amount of data and identifying unique pattern that are often useful in business. The process of data mining has improved the capacity of business intelligence through the exploitation of buying pattern and behavior for their benefit. At the same time, the insurance firms have benefited from capabilities of data mining systems that have made it possible to extensively cut on cost, accelerate business profits  as well as acquire new customer while continue to retain the existing customers.

The case of Allstate insurance

The Allstate Insurance Company is one of Americas leading insurance company that has emerged to be successful in its business operation. The company is responsible for insuring one of every eight automobiles and homes in the United States.  There are many reasons as to the success of Allstate insurance of which technology is part.  Allstate has identified and established some of the prime technology solutions and has put them into use in its business of insuring its clientele. As confirmed by Bill Hartnett, insurance companies deploy new technologies with the aim of reducing the cost first especially in areas of claims (Conz, 2008).

Allstate has teamed up with leading vendor of technologies in order to create robust technological platform that has reduced the cost incurred by Allstate and at the same time created improvement in financial processes.  For instance, Allstate selected SAP to provide it with the world renowned SAP solutions for use it its insurance business. This has resulted in the Allstate successfully creating a shared shared-services model that has been used by the organization in streaming their internal transactions and eliminating steps that have little value to the entire business process (SAP)

As a result of adopting such information systems, Allstate has gained tremendous benefits from the reduction of cost as well as flexibility from its five departments who are presently sharing one data platform that support interactions at all level of operations. The technological platform at the AllState has also made to have standardized business procedures while at the same time have reporting of key performance indicators at any given time.

With Allstate understanding the usefulness and potentials of the internet in web commerce, Allstate has leveraged it with the use of web services to develop rich interactive portals in the internet where clients can pay their premium and lodge claims when necessary (Opdyke, 2005). In addition to customer interaction, Allstate has been able to establish smooth business operations due to the automation of some of the complex tasks that could otherwise prove taxing to its employees. Consequently, the company has a been able to increase accuracy of its data through the use of information systems that enforce data integrity facilitating error free transaction.

With the use of recent in technologies in web services and the development if rich Internet-based transaction, Allstate has been able to provide online verification services for its auto insurance clients, in this way Allstate has been able to delays in serving its customers while at the same time providing efficiency and value to its customers. The use of information systems has also benefitted Allstate by ensuring compliancy with mandatory liability insurance laws that would be difficult to comply in the presence of traditional systems.  In summary, Allstate has made has made itself a significant insurance player through the use of technology to create a perfect market delivery strategy (IICMVA, 2004)

The use of information systems and the internet has transformed the manner in which business is done in the present business arena. Insurers have continued to use information systems and the internet technologies to reduces cost, increase interaction and promote compliancy and add value to the client. As a result of these technologies, the business direction  has changed with more insurance firms turning to the internet for marketing while at the same time using information systems to handle and manage data efficiently. 

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