Examiners' Report

The British Computer Society/The Chartered Insurance Institute Examiners’ Report Certificate in Information Technology for Insurance Professionals 17th October 2003 Time allowed: 3 hours. The paper is in 3 parts and carries 100 marks. Part I Answer ALL questions in Part I. Each question carries 3 marks. 30 marks are available Part II Answer THREE questions from Part II. Each question carries 10 marks 30 marks are available Part III Part III is a compulsory case study. Each question carries 10 marks Answer ALL questions. 40 marks are available. 1 (of 17) General Comments Many candidates did well in this examination and had obviously studied and absorbed the course material. However, a significant number had not sufficiently prepared for the examination, this being apparent from the poor quality or brevity of the answers. Also, it would appear that in many instances the questions were not properly read or understood. Candidates clearly need to read the questions carefully and consider what the examiner requires and then plan and format their answers accordingly. Many of the answers were difficult to comprehend due to poor layout and illogical structure. Several candidates answered all questions in Part II even though the instructions stated that only three questions should be attempted. Given the time limitations already inherent in this examination, candidates who answered all questions penalised themselves, as insufficient time then remained for the obligatory answers. Some of the answers for questions 18 and 19 indicated that candidates had not left enough time, with some omitting question 19 altogether. Rather than do this, candidates are advised that it would be worthwhile writing down a few key bullet points, as these could pick up the extra mark or two that could make the difference between a pass and a fail. 2 (of 17) Part I 1. List six fundamental abilities that information technology has brought to the insurance industry. Answer Pointers • Store, process, retrieve and analyse records • Automate routine, time consuming and labour-intensive activities • Dispense with resource wasting paper-based activities • Increase the speed and accuracy of timely information • Minimise the requirement to engage in non-revenue raising activities • Exchange data and information with speed and accuracy • Market and distribute insurance products and services • Access previously unknown sources of information (half a mark each for up to six abilities, maximum three marks) Examiners’ Guidance Notes - There was a wide range of answers to this question. Although the question clearly stated the requirement to list fundamental abilities brought to the insurance industry through the introduction of IT, many candidates just covered one or two points rather than the expected wide spectrum of subjects. 2. Explain how the processing speed of a microchip can be determined. Answer Pointers • Processing speed is determined by the word length and the cycle speed of the microchip • Word length is the number of bits processed in any one time by the microchip • Cycle speed is the timing beat for each processed event and is measured in megahertz (one mark for each of the above points, maximum three marks) Examiners’ Comments - A disappointing set of answers. Most students did not give all the necessary detail nor sufficient clarity to prove their knowledge of how clocking speed is determined. Many included irrelevant facts; for example, the construction and history of microchips. There was also a lot of confusion, for example, between clocking and cycle speed. 3 (of 17) 3. Describe the three different types of compact disks. Answer Pointers • CD-ROM. Data is permanently stamped on the CD by the manufacturer and cannot be changed. • CR-R. Data is recorded onto the CD by the user through a dye-based recording layer. Once recorded it cannot be changed. • CD-RW. Data can be recorded onto a "phase-change" recording layer and can be subsequently changed. (one mark each for type identified and described) Examiners’ Comments - Most took advantage of the opportunity to earn easy marks. Answers needed to include the full expansion of the three types of CD (and not any other form of storage media) with a brief description. 4. Describe and briefly compare the monitor display types CGA, VGA and SVGA. Answer Pointers • CGA - Colour Graphics Adaptor. A 320 x 200 four-colour screen and a 640 x 200 two-colour screen, • VGA - Video Graphics array. Generates a colour computer screen and permits a large range of colours to be displayed on a screen • SVGA - Super Video Graphics Array. Permits a higher resolution than a normal VGA and offers a huge range of colours. (One mark for each display type identified in words and described) Examiners’ Comments - A full expansion of the acronym with a brief comparative description of each monitor type was sought. Some answers were sloppy, confusing array with adaptor, colour with computer, visual with video etc. Some detail of colours and screen resolution was expected but not always given. 5. Describe the functions of RPG and explain its use and importance to the insurance industry. Answer Pointers • RPG - Report Program Generator • A problem-orientated programming language designed to produce programs to create reports from data extracted from files or databases. Superior to SQL as RPG provides greater format and display facilities. • Provides management information at all levels, including claims, underwriting, trends, statistical analysis etc. 4 (of 17) (One mark for identifying what RPG stands for and two marks for the description of the functions, with some examiner discretion) Examiners’ Comments - Very few attempted to answer this question. It was obvious that most people had no idea what the acronym stood for. Some made unlucky guesses that made the explanation of its use and importance rather ridiculous. Those who did get it right gave perfect and complete answers 6. Provide brief notes on three common components of an integrated software package. Answer Pointers • Word processing. Aid to creating, writing, editing, storing, formatting and printing documents. Has replaced the typewriter and increased productivity. Word processing software covers a range of functions, from simple text editing to advanced desktop publishing. Has a variety of formatting options and can include tools such spell-checkers and thesaurus programs and calculators. • Spreadsheets. A computerised form of ledger, where data is arranged into grids of columns and rows, called cells. Each cell address is unique and can contain numerical or textual data. If the user changes the numerical value of one cell, all related cells, and the results of any calculation using that cell, will change. Also, data can be easily converted to graphical format. • Database. Creates and enables the manipulation from different files or sources. Has features that allow non-programming staff to create small information systems. Has a wide range of facilities that allow the creation of files and data for storing and modifying data to answer user queries. (one mark for each package described, maximum three marks. Some examiner discretion if other packages included, such as presentation software or a programming language) Examiners’ Comments - Most candidates provided adequate answers to this question, although some notes were too brief and gained lower marks. Several candidates confused integrated software with operating systems software and consequently did not achieve any marks. 5 (of 17) 7. Describe three components of the following URL: http://www.ciilo.org/journal Answer Pointers • http (describes a web page to be accessed with an http web browser) • www.ciilo.org (the domain name that identifies a specific computer on the internet) • Journal (the directory in which the file resides) (one mark for each component, maximum three marks) Examiners’ Comments - This question differentiated the prepared candidate from the unprepared. Generally poorly answered with some candidates making just general comments about the use of the internet and/or URLs and ignoring the point of the question. 8. Compare the disaster recovery options of hot, warm and cold start. Answer Pointers • Hot start. This involves the establishment of a duplicate facility that is constantly updated. It waits in standby mode ready to take over if the system fails. The advantage is that it is instantly available and its disadvantage is cost. • Warm start. Involves a contractual relationship with a third party for the establishment of a compatible shared configuration for an annual subscription. It should be tested regularly. Its advantage is lower cost than hot restart. Its disadvantage is reliance on the supplier. • Cold start involves the provision of a computer room only, but with no hardware. The disadvantage is the length of time taken to procure the hardware and the advantage is very low cost. (One mark for each reasoned description and comparison of each option maximum three marks) Examiners’ Comments - Most candidates achieved high marks for this question, clearly demonstrating that they had absorbed the relevant information from the course book. A number lost marks by failing to compare the three options, highlighting the need to read the question before providing answers. 9. List, with reasons, three advantages and three disadvantages of using video conferencing. 6 (of 17) Answer Pointers Advantages • Saves on time and cost of travel • Can bring people from all over the world together at the same time • Video conferencing rooms can be in constant use • Different organisations can link together • Supports home working • Participants can use computer systems simultaneously Disadvantages • Some are uncomfortable with the technology • Difficult to assess body language • Technology integration difficulties • Time consuming to set up • Vulnerable to breaks in transmission (half a mark each for each advantage, maximum 1.5 marks, half a mark for each disadvantage, maximum 1.5 marks. Maximum for question 3 marks) Examiners’ Comments - This was answered exceptionally well, with even the most poorly prepared candidates picking up some marks, particularly with regard to the disadvantages. The high marks could be the result of practical experience of using the technology. This emphasises the need for candidates to investigate the various uses of technology within their own organisation, thereby augmenting the theoretical knowledge described in the course material. 10. Write notes on ISDN, PABX and MODEM. Answer Pointers • ISDN. Integrated Services Digital Network is an international digital public network standard for transmitting digital data. Faster than using modems. • PABX. Private Automatic Branch Exchange is a special purpose computer system designed to manage and switch telephone calls within an organisation. A PABX can handle voice and digital communications. • MODEM. MOdulator/DEModulator. A device that allows digital signals to be transmitted/converted down an analogue telephone line. (for each, half a mark for determining the acronym and half a mark for each description, maximum three marks) Examiners’ Comments - The better candidates scored full marks for this question. Those less prepared generally scored one mark for the modem part of the question, but wrongly guessed the meanings of ISDN and PABX. 7 (of 17) Part II 11. Describe the process used for the business analysis stage of systems development. What problems can arise in this stage and how could they be resolved? Answer Pointers Process • Business analysis consists of establishing the user requirements for the systems • Need to define the existing problems • Identify the causes • Find solutions (one mark for each point described, maximum four marks) Problems • Users may not know what they want • Communications problems due to different vocabularies • IT staff seek technical solutions • Users require business solutions (one mark for each point described, maximum four marks) Resolution of problems • IT staff and users must talk to each other in the same language to ensure that the business processes have been understood and documented • Use of a hybrid manager (skilled in business and IT) could be useful (one mark for each point described, maximum two marks) (maximum ten marks (4+4+2) for question 11) Examiners’ Comments - This question clearly asked about three distinct areas (1. process, 2. problem and 3. resolution) and referred to the business analysis stage of system development only. Scripts would also have benefited greatly from better layout, perhaps following the three areas indicated in the questions. Most candidates included the entire systems development process with irrelevant details relating to budgets and project teams rather than concentrating on the one stage requested. Many did not include any indication of potential problems or their resolutions. The standard of answer was generally very poor. 8 (of 17) 12. Outline five IT services or resources that can assist insurance sales staff when working from home or attending client appointments. Answer Pointers This question has been included to test the candidates' overall understanding of how IT can assist one area (sales) of an insurance organisation. Unlike other questions, the answer needs to be drawn from various sections of the text and for the higher marks candidates will need some knowledge outside of the standard text. Portable computers • • • • Use of notebook/laptop, subnotebook and palmtop computers These allow use of e-mail and connection to head office Hard drives allow much client information to be held Used for quotations and recording details of client visits Ad hoc enquiries/SQL • Use of query languages to determine clients in a territory • Clients under claim • Selection of clients for mailing purposes • Sales management purposes (sales of a particular product, sales in an area etc) CRM • Draws and co-ordinates information from a variety of sources (customer databases, accounts and statistics) • Provides information to review and understand sales data • Mobile sales teams are provided with access to timely and accurate information when visiting clients • Sales teams can update their own records and send this information to the central CRM system Office suites • Integrated word processing, spreadsheet, database, mail and diary systems can assist sales staff with their administrative functions • Word processing - regulatory and administration work • Spreadsheet - sales and commission calculations • Database - clients in area • Mail - communication with other sales staff and head office • Diary systems - appointments Teleworking • Use of IT facilities means that sales staff can spend less time than previously at head office • Use of broadband and high speed lines means that the sales staff PC or laptop can contain similar features and systems as those used at Head Office • Telephone calls from customers can be diverted to sales staff homes • Call centres can automatically handle sales staff diaries 9 (of 17) (two marks per area, based on the above, maximum ten marks. Some scope for examiners' discretion) Examiners’ Comments - Answers to this question included much repetition where stated resources or services overlapped; for example, inter/intra/extra net. Many suggested a PC and a laptop as separate resources but it should be noted the question particularly mentions sales and client appointments so it is unlikely they would have or need both. For each of the five identified resources or services a description of ‘what’ it is/was, ‘how’ it assisted the sales staff and ‘why’ was sought to attain good marks. Each item needed to be distinct in its own right; for example, Telephony would include mobile telephones, call centre technologies etc. E-mail may be included as a service offered on a laptop or by CRM. 13. Explain, with reasons, why you agree or disagree with an assertion that modern insurance systems are more concerned with business information and knowledge than data. Answer Pointers Business information versus data There is no expected prescribed answer but the candidate is expected to argue the case from one view or the other, using knowledge to back up arguments. General The candidate should first differentiate between data and information/knowledge. • • Data is raw and unrefined facts that represent events before they can be shaped into something people can understand. Information is data that has been refined, arranged and organised into something meaningful. Knowledge is the result of knowing and understanding something gained by experience or learning. (one mark for each description, maximum two marks) For those who agree with the assertion • Huge amounts of data available to insurance organisations can be queried and manipulated using SQL to give a complete picture of client or customer • Introduction of data mining and data warehousing has increased accessibility to data and drawn legacy data together to increase amount of knowledge available • Using various DBMS systems, able to interrogate data and to use for profiling, targeting and marketing campaigns • Knowledge can be used to create reasonably accurate predictions regarding customers, their lifestyle, spending patterns etc • Internet and web technology have introduced an information/knowledge rich society – people are more hungry for knowledge 10 (of 17) • • • • • • • • • Can record all facts in most modern systems and produce MI and statistical information Can interrogate data to identify outcome in a variety of "What if?" scenarios Knowledge has become a strategic asset A major source of wealth and prosperity is the production management and distribution of knowledge Use of knowledge in strategic planning Ability to share knowledge via group collaboration systems, groupware, intra and extranets. Systems to distribute knowledge – workflow, DIP, WP, LANs, WANs Systems that create knowledge – CAD and CAM, expert, etc Systems to capture and Codify – Neural, AI, etc (1 mark for each reasonably argued point to max of eight) OR Disagree • Some companies have a lot of disparate legacy systems with non-compatible data and software and therefore unable to get full picture or query • There is still some lack of ability amongst staff unable to manipulate data • Old fashioned attitude and arrogance, belief that they can get on without knowledge • Lack of access to data • Lack of funds to purchase necessary s/w and h/w to harness knowledge • Too much dependence on computers rather than people • Manual systems • Companies who don’t are likely to go out of business! • Lack of staff training (1 mark for each reasonably argued point to max of eight) (maximum ten (2 + 8) marks) Examiners’ Comments - This was an unpopular choice and yet an easy option for marks. There was not always a clear statement of whether the student agreed or disagreed with the assertion, which made marking the question more difficult. Definitions and differentiation of data vs. information vs. knowledge were clear and accurate but unfortunately some then forgot to continue with their reasoning. Ideally examiners would have liked to see more reasons given to strengthen the chosen argument. Also, many digressed into how you extract data to turn it into info/knowledge, these elaborate answers often omitting to relate back to the question. 11 (of 17) 14. Define and describe how outsourcing could be used within an insurance organisation. List the advantages and disadvantages of outsourcing the IT functions. Answer Pointers Definition. The practice of contracting out some, or all, of its work to external vendors. These external vendors will be independent companies with special expertise in certain areas. An insurance company can outsource a variety of activities including all IT functions, claims handling, telesales, loss assessing, underwriting and customer service/enquiry functions. (two marks for definition and description) Advantages: • Only pay for what is actually used • No doubt over costs • Expertise of outsourcer can be utilised • Organisation can concentrate on its core activities • Better testing of new methods • Improved speed of response • Outsourcing companies could become business partners • May have leverage over the outsourcing company • Flexibility (one mark for each advantage, up to four marks) Disadvantages: • Loss of control • Over dependence on the outsourcer • Over dependence could lead to high costs • Possible leakage of sensitive information • Outsourcer's business problems could affect organisation • Disputes could be lengthy and time-consuming (one mark for each disadvantage, up to four marks) (maximum ten marks (2+4+4) for question 14) Examiners’ Comments - A popular question that was generally answered well, with candidates clearly drawing on material from the course book and their own experiences. Some candidates lost marks by failing to answer the first part of the question (define and describe). Others lost marks by resorting to repetition of the same points in different parts of the answer. 12 (of 17) 15. Briefly illustrate and describe the star, ring and bus network topologies. Answer Pointers Star network topology This has a central hub or host computer connected to a number of smaller computers. These smaller computers are all dependent on the host that makes them vulnerable, as communications in the network will fail if the host fails. (two marks) Diagram (Figure 4.1 from textbook) (two marks) Ring network topology A ring network does not rely on a central or host computer. If one of the other computers in the ring network fails, the others can continue unaffected as each can work independently (one mark) Diagram (Figure 4.2 from textbook) (two marks) Bus network topology A bus network has all the PCs branching from a single line. The PCs or workstations connected to the bus network are called nodes and every node in a network has a unique address so it can be identified. As no central host computer controls the network, if one fails the others are unaffected. (two marks) Diagram (Figure 4.3 from textbook) (two marks) (maximum ten marks (2+2+1+2+1+2) for question 15) Examiners’ Comments - Another popular question that was answered well. Some candidates confused the three different types of network and others were unnecessarily brief in their answers. Diagrams without any explanation did not gain marks. 13 (of 17) Part III Part III is a compulsory case study. Read the case study carefully and answer ALL of the following questions. All questions carry equal marks. It is recommended that no more than 70 minutes be spent on Part III. Accufund is a large insurance brokerage that has grown rapidly following a relentless strategy of merger and acquisition. It now has over 20 offices nationwide and uses different systems for each of the four product types of insurance business transacted. As customers frequently have more than one product type, it is impossible for Accufund to have a single view of a customer's business. The Board have decided to put further mergers and acquisitions on hold until the IT systems are improved and they intend to employ a consultancy company to introduce a marketleading CRM package. Once the single customer view objective has been achieved, Accufund intend to provide both call centre and internet facilities to generate further business. As an independent consultant, you have been employed by Accufund to provide general advice and assistance. Questions: 16. Describe how a CRM system could be used to assist Accufund and list the benefits it could provide. What barriers to implementation might exist? Answer Pointers CRM systems collect, manage, share and store all information that might be used to acquire and keep customers, improve services and maximize the potential for future sales. Data for CRM is collected from all contact with customers. (three marks). Benefits of CRM include: • • • • • Access to recent policy information for each customer Greater understanding of customers and their propensity to buy Able to answer most customer enquiries immediately Integration of customer information from all areas An understanding of customers' habits and buying patterns (one mark for each point, maximum five marks) Barriers. • Difficulties in integrating disparate legacy systems. • Poor or incomplete CRM designs that do not meet the business objectives. (one mark for each point, maximum two marks) (maximum ten marks (3+5+2) for question 16) 14 (of 17) Examiners’ Comments - Many students lost valuable time by including a long and largely unnecessary introduction, basically repeating the content of the question, which gave no extra marks. The answers proved that some students had not done sufficient study for this exam. Firstly, an expansion of the acronym and brief description was essential and many fell at this first hurdle; those who didn’t define it appeared, by the content of the rest of their answer, not to know what it was and used guess work. Most combined their definitions with the benefits; the latter were not clearly listed as requested. There was much repetition. Some did not make reference to Accufund, yet the question clearly asked for this. The potential barriers were well explained, often to the detriment of the rest of the answer. 17. Explain how a call centre operates and how ACD, CTI, CLI and IVR technologies could be used by Accufund. Answer Pointers Operation of a call centre. Began as a quicker way for insurance companies to answer customer enquiries. Number of employees working in open plan office with call management screens, input screens with customer database, headsets and telephones for staff and with the ability for supervisors to monitor calls for legal and quality reasons. The call centre computer facilities are often linked with company databases, allowing the operators to answer common queries using up-to-date information. ACD. Automatic Call Distribution. If the office called is busy, ACD will automatically re-route calls to another office with the least calls outstanding. First operative available will answer call, or call will be forwarded to answer machine or held in a queue. As each call is answered, the customer moves up the queue. CTI. Computer Telephony Integration links caller to data on database, thus removing the need to search a paper-based file. A CTI system can determine (using CLI) from the caller's number the name of the caller and display the relevant information ready for the call centre operator. CLI. Caller Line Identification identifies caller and gives caller priority when ringing again. Useful if the caller has previously rung regarding a possible sale. IVR. Interactive Voice Response. This offers callers a list of services or options that can be accessed by the caller pressing numbers. Alternatively, IVR can use voice activated computers to make choices. IVR can alienate callers and many just hang up. (two marks for adequate explanation for each, maximum ten marks (2+2+2+2+2)) Examiners’ Comments - Only a limited number of answers included a description of the operation of a call centre, despite its being asked for in the question. The opportunity to discuss call centres in general was often disregarded. The acronyms were mostly ignored or incorrectly expanded with some extremely imaginative definitions. Little reference was made to Accufund. Often CLI and CTI (along with 15 (of 17) other call centre technologies) were confused with each other – excellent descriptions given for the wrong or/and unidentified item Many of the answers had neither sufficient quantity nor quality to merit good marks. 18. Write a memorandum to the Board summarising the reasons why an internet facility should be provided. Conclude your memorandum with a warning about the threats and problems posed by use of the internet. Memo format (one mark) Reasons • To sell insurance • To sell a particular type of insurance only • To advertise • To provide particular product information • To provide other information • To provide quotes by email • To request information from a customer (one mark for each point raised, maximum five marks) Threats and problems • People can be reluctant to buy from the internet due to unfamiliarity • On-line forms lack human contact • Worries about confidentiality • Increase in internet usage may lead to job losses • Shortcomings with the IT infrastructure • Complexity of some insurance products makes them unsuitable for internet use (one mark for each point raised, maximum four marks) (maximum of ten marks (1+5+4) for question 18) Examiners’ Comments - Most answers were of a reasonable pass standard, with some candidates providing comprehensive and reasoned answers. The question called for an answer in memorandum format and for this the examiners required more than just "memo" written at the head of the answer. The memorandum format indicated that a clear explanation is required for the directors, who may be unfamiliar with the concepts. 16 (of 17) 19. Describe the issues that could result in some form of contractual disagreement between Accufund and the consultancy company. List the components that must be present for a binding and valid contract under English law. Answer Pointers Reasons for contractual disagreement • Late delivery of software/services • Disputes over what has been delivered/quality issues • Payment amount • Payment delays • Software errors (one mark for each point, maximum five marks) Components of a valid contract • Clear offer to sell • Clear and unambiguous acceptance and communication of that offer • Clear and unambiguous agreement of the terms of the contract concerned • Consideration, i.e. money in exchange for something • An intention to create a legal relationship (one mark for each point, maximum five marks) (maximum ten marks (5+5) for question 19) Examiners’ Comments - Some reasonable answers, with most candidates having a clear idea of the requirements under law for a valid contract. There was some evidence of rushed answers as candidates attempted to complete the paper before the end of the examination. 17 (of 17)