An integrated Multi-Criteria Decision Making Model for Sustainability Performance Assessment for Insurance Companies

Ramin Gharizadeh Beiragh, Reza Alizadeh (), Saeid Shafiei Kaleibari, Fausto Cavallaro, Sarfaraz Hashemkhani Zolfani, Romualdas Bausys and Abbas Mardani
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Ramin Gharizadeh Beiragh: Department of Industrial Engineering, Urmia University of Technology, Urmia 419-57155, Iran
Saeid Shafiei Kaleibari: Department of Mechanical Engineering, Shanghai Jiao Tong University, Shanghai 430074, China
Fausto Cavallaro: Department of Economics, University of Molise, Via De Sanctis, 86100 Campobasso, Italy
Sarfaraz Hashemkhani Zolfani: School of Engineering, Catholic University of the North, Larrondo 1281, Coquimbo 1240000, Chile
Romualdas Bausys: Department of Graphical Systems, Vilnius Gediminas Technical University, Sauletekio al, 11, LT-10223 Vilnius, Lithuania

Sustainability, 2020, vol. 12, issue 3, 1-24

Abstract: To stay competitive in a business environment, continuous performance evaluation based on the triple bottom line standard of sustainability is necessary. There is a gap in addressing the computational expense caused by increased decision units due to increasing the performance evaluation indices to more accuracy in the evaluation. We successfully addressed these two gaps through (1) using principal component analysis (PCA) to cut the number of evaluation indices, and (2) since PCA itself has the problem of merely using the data distribution without considering the domain-related knowledge, we utilized Analytic Hierarchy Process (AHP) to rank the indices through the expert’s domain-related knowledge. We propose an integrated approach for sustainability performance assessment in qualitative and quantitative perspectives. Fourteen insurance companies were evaluated using eight economic, three environmental, and four social indices. The indices were ranked by expert judgment though an analytical hierarchy process as subjective weighting, and then principal component analysis as objective weighting was used to reduce the number of indices. The obtained principal components were then used as variables in the data envelopment analysis model. So, subjective and objective evaluations were integrated. Finally, for validating the results, Spearman and Kendall’s Tau correlation tests were used. The results show that Dana, Razi, and Dey had the best sustainability performance.

Keywords: analytic hierarchy process (AHP); data envelopment analysis (DEA); sustainability; insurance companies; principal component analysis (PCA) (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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