Health insurance risk assessment using cognitive mapping and multiple‐criteria decision analysis

Health insurance risk analysis is crucial to the development of the insurance industry, allowing insurance companies to anticipate potential losses in health insurance's inverted product life cycle. The health insurance risk evaluation process is, however, carried out in various ways, which lim...

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Bibliographic Details
Published inInternational transactions in operational research Vol. 30; no. 5; pp. 2158 - 2188
Main Authors Fernandes, Hugo E. M., Ferreira, Fernando A. F.
Format Journal Article
LanguageEnglish
Published Oxford Blackwell Publishing Ltd 01.09.2023
Subjects
cognitive mapping
Cognitive models
Criteria
Decision analysis
decision support
Decision support systems
Health insurance
Insurance
Insurance industry
MACBETH approach
Mapping
Mathematical analysis
multiple‐criteria evaluation
Operations research
Product life cycle
Risk analysis
Risk assessment
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Summary:Health insurance risk analysis is crucial to the development of the insurance industry, allowing insurance companies to anticipate potential losses in health insurance's inverted product life cycle. The health insurance risk evaluation process is, however, carried out in various ways, which limits the application of transparency, fairness, and justice principles in the calculation of risk rewards. By combining cognitive mapping and measuring attractiveness by a categorical‐based evaluation technique (i.e., MACBETH, a multiple‐criteria decision analysis technique), this study sought to create a nonparametric and distinctive decision support system for individual private health insurance risk analysis. The proposed system facilitates greater transparency in the calculation of health insurance risk rewards. The results of a real‐world application of this system were analyzed and discussed in face‐to‐face group meetings with independent experts who work for two of the largest insurance companies in Portugal, thereby incorporating realism into the proposed evaluation mechanism. The advantages and limitations of this assessment framework are also discussed.
ISSN:0969-6016
1475-3995
DOI:10.1111/itor.12895