Intelligent Decision Support in Proportional–Stop-Loss Reinsurance Using Multiple Attribute Decision-Making (MADM)
Shirley Jie Xuan Wang () and
Kim Leng Poh ()
Additional contact information
Shirley Jie Xuan Wang: Department of Industrial Systems Engineering and Management, Faculty of Engineering, National University of Singapore, Singapore 117576, Singapore
Kim Leng Poh: Department of Industrial Systems Engineering and Management, Faculty of Engineering, National University of Singapore, Singapore 117576, Singapore
Journal of Risk and Financial Management, 2017, vol. 10, issue 4, 1-17
This article addresses the possibility of incorporating intelligent decision support systems into reinsurance decision-making. This involves the insurance company and the reinsurance company, and is negotiated through reinsurance intermediaries. The article proposes a decision flow to model the reinsurance design and selection process. This article focuses on adopting more than one optimality criteria under a more generic combinational design of commonly used reinsurance products, i.e., proportional reinsurance and stop-loss reinsurance. In terms of methodology, the significant contribution of the study the incorporation of the well-established decision analysis tool multiple-attribute decision-making (MADM) into the modelling of reinsurance selection. To illustrate the feasibility of incorporating intelligent decision supporting systems in the reinsurance market, the study includes a numerical case study using the simulation software @Risk in modeling insurance claims, as well as programming in MATLAB to realize MADM. A list of managerial implications could be drawn from the case study results. Most importantly, when choosing the most appropriate type of reinsurance, insurance companies should base their decisions on multiple measurements instead of single-criteria decision-making models so that their decisions may be more robust.
Keywords: multi-attribute decision-making; reinsurance; proportional reinsurance; non-proportional reinsurance; TOPSIS (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:gam:jjrfmx:v:10:y:2017:i:4:p:22-:d:120649
Access Statistics for this article
Journal of Risk and Financial Management is currently edited by Prof. Dr. Michael McAleer
More articles in Journal of Risk and Financial Management from MDPI, Open Access Journal
Bibliographic data for series maintained by XML Conversion Team ().