Information Technology Risks & the Extent of Their Impact: An Analysis of Zimbabwean Insurance Companies in the Context of E-Commerce

Abstract

The conditions for doing business are rapidly changing. The Internet and related advances in information technology significantly affect financial services in general and insurance markets and banks in particular. The growing importance of e-commerce represents a watershed event for insurance markets and banking institutions, as it does for most industries. By managing Information Technology risks, e-commerce will enable insurers to classify, underwrite, and price risk as well as settle claims more accurately and efficiently. The risk connected with the wide application of information technologies in business grows together with the increase of enterprise’s correlation from its customers, business partners and outsourced operations. Technological progress generates dependencies which evoke growth of diversities, complexity, non-descriptiveness and quantity of risk factors. In insufficient investments on information security the issue of IT risk management becomes more significant, concentrating on searching optimal proportion between threats and costs of IT systems protections. In such dynamic development of Information Technology the time needed for appropriate reaction on risk is decidedly shortened. The lack of appropriate preparation may lead the company to collapse, thus appropriate reaction on risk constitutes about possibilities of survival and development of enterprise. One of the most important stages of this process is risk analysis, used for optimization, and correctly for minimizations of losses connected with risk. The dissertation will present the issue of IT security risk management; discuss the most significant stage of risk management which is IT security risk analysis. Chosen computer applications supporting these processes will be presented. Selected research connected with IT security risk management will be discussed in the literature review. Overally, the Internet – through a secure platform of I.T, will significantly enhance the efficiency of the insurance markets and institutions and benefit consumers by lowering transaction and information costs. The foundation for the purpose of this research has been created by a prospective study to explore I.T risks & the extent of their impact on the Zimbabwean insurance companies in the context of e-commerce. In order to fulfill the purpose of this study, a frame of reference will be emerged based on a vast literature review. With the focus at quantitative research as a general approach and descriptive research as the type of research in this study, a structured questionnaire will be used as the data collection instrument. To accomplish this, a survey of 25 people (in almost all active insurance companies in Zimbabwe) will be carried out. The respondents from almost every department within the targeted insurance companies will be randomly chosen. Focus will be on the perception of insurers and re-insurers regarding the subject of study, and thus, the perception of other stakeholders such as insurance agents/brokers and even their customers will be suggested for future research, due to limitation and demarcation of this research.