Informatics and Financial Applications for Computing-myassignmenthelp

Question: Discuss about theInformatics and Financial Applications for Cloud Computing. Answer: Introduction The purpose of this report is to provide knowledge on information systems, decision support systems, and cloud computing. The industry I have chosen in this report is the insurance industry. I have chosen insurance because research shows that many insurance companies rely on data analytics to make key decisions. The report is divided six sections as follows. In chapter one, I discuss the contents of the report. In chapter two, I discuss what Decision Support Systems are and how these tools can be used within the insurance industry to fix some of the challenges they face such as product development and insurance fraud detection. In chapter three, I discuss cloud computing and the opportunities it brings to the insurance industry. I also provide statistical evidence on the uptake of cloud computing services by insurance companies. In chapter four, which is the final section, I conclude my analysis by providing a brief summary of information systems and insurance. The references and appendix is included in section five and six respectively. Decision Support Systems And Insurance Decision Support Systems (DSS) are a set of tools and software used to collect and analyze data into useful information. Most DSS tools are able to perform a wide variety of functions including collection and organization of data, data analysis, and production of custom reports (Castellanos, Dayal, Simitsis, Wilkinson, 2009). Insurance fraud is a growing concern for many insurance companies because it increases the cost of insurance. Fraud can occur at different stages of the insurance cycle. Some common examples of fraud include staged accidents, data theft and application fraud (Insurance Nexus, 2016). DSS tools, based on historical fraud data, can be used by insurance companies to assist in the prevention, reduction, and detection of fraud. Below are examples of these tools may be used by the insurance industry to combat fraud. Decision Support Systems for Prevention of Insurance Fraud A DSS tool can be used to screen applicants at the application stage. The tool will then score the applicants by flagging their likelihood for potential fraud. Based on this information, an insurance company can either reject a customer with a high score from the onset or offer them an insurance policy subject to close monitoring by the insurance company (See Figure 2?1). Decision Support Systems for Reduction and Detection of Insurance Fraud DSS tools can also be used for detection and reduction of fraudulent claims. In this scenario, the tool works by identifying claim applications that are potentially fraudulent. Furthermore, the costs of various actions by the company from settling the claim to rejection or investigation of the claims are analyzed concurrently. Based on the output, the insurance companies can make the appropriate decisions (Power, 2017). Decision Support Systems in other Areas of Insurance Apart from fraud management, Insurance companies are also using DSS tools in other critical areas of the business. These areas include premium pricing, product development, agent selection, customer service, claims settlement etc. Figure 2?1: Insurance Fraud Detection System Cloud Computing And Insurance Industry Gone are the days of companies purchasing expensive data warehouses and servers. With the advancement of the internet, cloud computing services have allowed companies to efficiently reuse their IT resources while having quick access to real time data (Accenture, 2010). Cloud computing, which is an area of DSS, was initially developed for storage solutions and servers infrastructure. With time, their capabilities have increased to include business support applications like email and office suites, customer service, web conferencing facilities, enterprise applications and project planning (Edara Kandagatla, 2012). With regards to the insurance industry, cloud computing provides many benefits to insurance companies. In addition to the functions mentioned above, they can also be used by insurance companies to build potential underwriting tool applications for their customers(Edara Kandagatla, 2012). Despite the opportunities above, investment in cloud computing services within the insurance industry is still low. The main reason cited is compliance issues such as data privacy and restrictions. Insurance companies collect a lot of personal data and they fear that any data leak in the cloud may have a significant reputational risk to the company. A study was done on 53 insurance companies in North America to gather their responses on clouds computing(Accenture, 2010). Figure 3?1below shows that out of the responses, 51% of the insurance companies were keen on cloud storage. However, when it comes to implementation, their responses were of strong interest but no commitment, possibly due to the data privacy concerns. To overcome this challenge, software companies are focusing on the creation of private clouds to encourage insurance companies to host their core business specifics. Private clouds are considered more secure than public clouds. Figure 3?1: Insurance Companies Response to Cloud Computing Conclusion We live in a world where data is becoming a critical component of a companys decision making process. Consequently, Decision Support Systems have become a common feature in many businesses due to their ability to analyze data into useful information. When it comes to the insurance industry, DSS tools play a vital role. We have observed that insurance companies have a history of collecting a lot of data on both claims and policies. DSS tools can then be applied on this data to extract useful information. We observed in chapter two an example of a DSS tool used by insurance companies for fraud detection and prevention. Furthermore, DSS tools can also be used in other parts of the industry such as product development and pricing. Cloud computing is an area of DSS. Cloud computing services provide storage and infrastructure solutions to companies which results in cost savings in regards to their IT resources and enhanced business performance. In respect to the insurance industry, cloud computing also offers companies opportunities to develop business models such as underwriting tool packages. Despite these opportunities, the uptake of cloud computing within the insurance sector is still low at its infant stage. However, it is expected that this area will expand in the near future as DSS tools evolve to meet the needs of the industry. Studies are showing that insurance companies that have begun to develop strategies surrounding cloud computing services are already indicating signs of a competitive advantage. References Accenture. (2010). How Cloud Computing will Transform Insurance. Retrieved from Accenture: https://insuranceblog.accenture.com/wp-content/uploads/2013/07/Cloud_for_Insurance_POV_Final.pdf Castellanos, M., Dayal, U., Simitsis, A., Wilkinson, K. (2009). Proceedings of the 12th International Conference on Extending Database Technology: Advaces in Database Technology. Retrieved from https://icdt.tu-dortmund.de/proceedings/edbticdt2009proc/edbt/papers/p0001-Dayal.pdf Edara, S., Kandagatla, R. (2012). Cloud Computing in the Property . Retrieved from Capgemini: https://www.cn.capgemini.com/resource-file-access/resource/pdf/Cloud_Computing_in_the_Property___Casualty_Insurance_Industry.pdf Insurance Nexus. (2016, March 9). Analytics in Insurance Fraud: The Fight Before the Claim . Retrieved from Insurance Nexus: https://www.insurancenexus.com/fraud/analytics-insurance-fraud-fight-claim Power, D. (2017). How can analytics and decision support reduce insurance fraud? Retrieved from https://dssresources.com/faq/index.php?action=artikelcat=id=292artlang=en