Management of Insurance Business
Few years ago, Internet was a mystery to many people. Now, organizations and individuals alike want to be a part of the Internet. Nearly all Western companies have a presence on the Internet in the form of a Web site. Their site’s uniform resource locator (URL – its electronic `addressi?? ) is routinely listed alongside their telephone, fax and e-mail numbers. Connected to Internet are the sites of organizations, businesses, and academic institutions.
These sites may carry numerous pages of information and regular publications, and files for visitors to download. Some companies – `e-businessesi?? – now buys and sells products and services exclusively over the web. E-business requires a secure means of transferring financial information such as credit card details. Unfortunately, as with many other technical innovations there are some threats associated with the usage of Internet.
Security is an ever-present problem, specifically for business transactions. Web site contents may have legal implications, and the Internet offers opportunities for the virus infestation of both host and client computers. Furthermore, hackers are always trying to find ways to reach the files stored on a Web server. Consumer intention to adopt e-commerce is a behavioral intention to exchange information online, share confidential and monetary information, and engage in product purchases.
Since online transactions entail consumers to use Internet technologies to a great extent, e-commerce adoption intentions essentially necessitate that consumers perceive Web interfaces to be useful and easy to use. In addition, the novel and impersonal nature of online transactions and the technological unpredictability of the Internet reduce consumer perceptions of control over their online transactions, making trust and risk beliefs inevitable elements of online consumer behavior. The Consumer Online Transaction Process
Different Risk Factors Perceived Risk: The distant and impersonal nature of the online environment and the implicit uncertainty of using a global open infrastructure for transactions have rendered risk as an inevitable element of e-commerce. Two forms of uncertainty are naturally present in online transactions, (a) behavioral uncertainty, and (b) environmental uncertainty. Also there are risks as technology-driven risks derived from the underlying infrastructure and relational risks resulting from the trading partner.
Behavioral uncertainty arises because Web retailers have the chance to behave in an opportunistic manner by taking advantage of the distant and impersonal nature of e-commerce and the government’s inability to adequately monitor all transactions. Examples of opportunistic behavior by Web retailers include product misrepresentation, false identity demonstration, denunciation of warranties, and outright fraud. Therefore, behavioral uncertainty primarily creates
(i) Economic risk because of the possibility of monetary losses. (ii) Personal risk because of potentially unsafe products. (iii) Seller performance risk because of imperfect monitoring. (iv) Privacy risk because of the opportunity to disclose private information. On the other hand, environmental uncertainty mainly exists because of the unpredictable nature of the Internet technology that is beyond the full control of the Web retailer or the consumer.
While retailers have an important influence on the security of the transaction medium through encryption, authentication, and firewalls, there is still a possibility for third parties to compromise the transaction process. Examples of environmental uncertainty include theft of credit card information, breach of private information, and stealing of personal information by hackers. Hence, environmental uncertainty mainly includes (i) economic risk and (ii) privacy risk. When engaging in an online transaction process, consumers are rightfully alarmed about the different types of risks present.
However, since risk is difficult to be captured as an objective reality, we have the notion of perceived risk, which is defined as the consumer’s subjective expectation of suffering a loss in pursuit of a desired outcome. Without loss of generality, the proposed forms of behavioral and environmental uncertainty should collectively behave since a consumer has certain overall expectations regarding the Web retailers’ behavior and their ability to protect critical information. Moreover, the risk increases from information sharing to product purchase.