Insurance market is a vitally important economic institution where mutually beneficial exchange between consumers - insurance takers and vendors - insurance companies is carried out. Consumers purchase the promise of the insurer to cover the financial consequences of a possible loss, paying the insurance premium for this service. The insurers take the liability to cover the losses in case of a probable harmful event and issue a special document testifying the power of the contract - the insurance policy. Information is crucial for market exchange to occur - consumers have to possess the information about supply and prices, vendors - about demand and paying ability of their clients. Modern economic theory attributes to the market an important innovative function too - the market encourages vendors to create new products and bring them to the market in response to the emerging demand for them.

Security for the future strongly influences the welfare of people by making better the personal well-being and by allowing for more risk taking activities unfolding the entrepreneurial spirit in an environment where insurance against harmful loss is available.

Role of Information Technology in Insurance Sector

The insurance industry has a particular dependence on information technology. Insurance was one of the first industries to apply computers transaction processing -- to handle the vast number of claims, reserve estimates, payments, codes, etc. required. Examples of this data processing commitment began in the 1950's.
Not long into the information revolution, the need to make sense out of this mass of data was recognized. Hence the origins of Management Information Systems (MIS) in the 1970's. The goal of MIS was to consolidate data into meaningful reports. Yet these reporting systems were often paper-intensive and provided a weak basis for decision--making. The