Choice of Life Insurance Companies by using Analytic Hierarchy Process: Experience of the Republic of Serbia

Predrag Mimovic
Faculty of Economics
University of Kragujevac
Milena Jaksic

Violeta Todorovic

Publication date: Jan, 2017

Journal: Journal of Insurance and Financial Management
Vol.: 3- Issue: 1- Pages: 2112-2371

Abstract: In the second half of the twentieth century, real and financial property sector underwent a number of changes caused by intense globalization, deregulation, and technical and technological revolution. These changes included, among other things, increased risk exposure, typical of activities in these sectors. In such a turbulent environment, the primary objective of the individual and the economy as a whole is to safeguard the life of members of a national community. By purchasing insurance, risk is transferred from an individual to a group, eliminating uncertainty in terms of financial loss in a defined case. Therefore, life insurance, as an important economic and social category, is increasingly gaining in importance. Given the above, the paper analyzes factors relevant for the selection of insurance companies in the Republic of Serbia. At the same time, Analytic Hierarchy Process is applied, measuring relevance of the impact of various factors on the choice of an appropriate insurance company. The results obtained by comparing factors identified show that, in the selection process, among all other alternatives, respondents favor reliability of insurance companies.

Keywords: Risk, Insurance, Evaluation, AHP, Selection