CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
From time immemorial, information has always played a prominent role in human life but the emergence of social progress and the vigorous development in science and technology has immeasurably increased the role of information in every facet of human endeavour. The rapid expansion of a mass of diversified information has born the term “information explosion” and gave rise to a scientific approach in information and elucidation of its most characteristic properties which has led to principal changes in interpretation of the concept of information. It was broadened to include information exchange not only among men but also among machines as well as the exchange of signals in the animal and plant worlds. The pace of change brought by new technologies has had a significant effect on the way people live, work, and play globally(Agbolade, 2011).
Today’s business environment is very dynamic and experiences rapid changes as a result of creativity, innovation, technological changes, increased awareness and demands from customers. Business organizations, especially the insurance industry of the 21st century operates in a complex and competitive environment characterized by these changing conditions and highly unpredictable economic climate with Information and Communication Technology (ICT) being at the centre of this global change curve(Adesina and Ayo, 2010).
Business organisations especially the insurance sector are operating in an environment characterised by a complex and competitive climate. In most developed countries, technology is a central element to deal with challenges in modern insurance operation, such as lowering costs and enabling efficiency improvements. Certainly, most insurance companies worldwide are growing primarily by utilising ICT to provide efficient insurance services to their customers (Elgahwash and Freeman, 2011).
The use of ICT in the insurance industry is relevant and beneficial considering the significant role of insurance in the economy. Amongst other, insurance promotes business activity by providing financial intermediary services necessary to induce economic growth (Ward and Zurbruegg, 2000; Liedtke, 2007; Apampa, 2010). ICT initiated a radical change in the latest style of insurance business in a way that is threatening the traditional form of insurance (Twati and Gammack, 2006). Technological advances are the most important variables which have contributed to the radical shift in the patterns of the insurance business in the era of globalisation; technology has focused the keen interest of insurance to intensify attempts to take advantage of the latest information technologies, communications and computers, and to adapt efficiently in order to invent insurance services and the development of novel methods of submission (Abubakar and Tasmin, 2012).
Microsoft Encarta (2009) defined information and communication technology as the processing of data via computer: the use of technologies from computing, electronics, and telecommunications to process and distribute information in digital and other forms. Information technology combines the technology of computers and communications to provide information processing services throughout the office or around the world.
Information and communications technologies (ICTs) have changed the approaches to conducting business transactions and meeting the growing demands of customers for most organizations. The promise of ICTs in the insurance sector has been seen in terms of its potential to increase customer base, reduce transaction costs, improve the quality and timeliness of response, enhance opportunities for advertising and branding, facilitate self- service and service customization, and improve customer communication and relationship (Adesina and Ayo, 2010). Most insurance firms in developed and some in developing parts of the world are now offering e-insurance services with various levels of sophistication. However, most Nigerian insurance firms seem to be content with having a Web presence with only a few of them making strides towards full-fledged e-insurance applications. Therefore, this study shall assess the Impact of Information and Communication Technology (ICT) on the growth of Non-life Sector of the Nigerian Insurance Industry.