Behavioral models in insurance risk management
-
Author(s)Evgenija ProkopjevaLink to ORCID Index: https://orcid.org/0000-0002-6818-5780
,
Evgeny TankovLink to ORCID Index: https://orcid.org/0000-0003-4833-7043
,
Tatyana ShibaevaLink to ORCID Index: https://orcid.org/0000-0001-7844-8647
,
Elena PerekhozhevaLink to ORCID Index: https://orcid.org/0000-0002-6529-3954
-
DOIhttp://dx.doi.org/10.21511/imfi.18(4).2021.08
-
Article InfoVolume 18 2021, Issue #4, pp. 80-94
- Cited by
- 720 Views
-
357 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
Behavioral characteristics attributed to consumers of insurance services are a relevant factor for analyzing the current situation in the insurance market and developing effective strategies for insurers’ actions. In turn, considering these characteristics allows the insurer to be more successful in the highly competitive field, achieving mutual satisfaction in interacting with the customer.
This study is aimed to develop cognitive models of the situation (frame) “Insurance”, taking into account the specifics of the Russian insurance market and systemic factors affecting participants’ behavior in the market. In this regard, the study involves systemizing risks at various levels of the economic system, generalizing factors for the motivation of insurance consumers, developing descriptive and economic-mathematical models for the behavior of economic entities in risky situations.
The results obtained represent a behavioral model of interactions among insurance market entities, which determines opportunities for efficient and mutually beneficial coordination of their activities. The developed model includes the following elements: structured individual and institutional frames “Insurance”; a professional index of interest in insurance presented in the form of a mathematical model; methodology for governing the relationships among insurance participants in the digital environment.
The recommendations enable predictions of the situation in the insurance market and allow most accurately defining the consumer needs in the conditions of market changes.
- Keywords
-
JEL Classification (Paper profile tab)G41, G22
-
References52
-
Tables4
-
Figures5
-
- Figure 1. Factors determining the demand for insurance services
- Figure 2. The model of economic entities’ behavior in a risky situation
- Figure 3. Dynamics of insurance premiums in Russia, billion rubles
- Figure 4. Structure of insurance premiums in the federal districts in 2020
- Figure 5. Dynamics of the professional index of insurance interest
-
- Table 1. Main risks at different levels of the economic system
- Table 2. Methods for managing risks at different levels
- Table 3. Approaches to governing interactions
- Table 4. Customer characteristics in major insurance segments
-
- Avtonomov, V. S., & Belyanin, A. V. (2011). Povedencheskie instituty rynochnoj ekonomiki: k postanovke problem [Behavioral institutions of the market economy: towards the solution of the problem]. Obshchestvennye nauki i sovremennost’ – Social sciences and modernity, 2, 112-130. (In Russian).
- Bank of Russia. (n.d.). Strakhovanie – Insurance. (In Russian).
- Becker, G. (2003). Chelovecheskoe povedenie: ekonomicheskij podhod [Human behaviour: an economic approach]. Moskow: Higher School of Economics. (In Russian).
- Belozerov, S. A., Chernova, G. V., & Kalaida, S. A. (2018). Sovremennye faktory razvitiya rossijskogo strahovogo rynka [Modern factors of development of the Russian insurance market]. Strahovoe delo – Insurance Business, 6(303), 31-35. (In Russian).
- Boldyrev, N. N. (2016). Kognitivnaya semantika: Kurs lekcij po anglijskoj filologii: uchebnoe posobie [Cognitive semantics: A course of lectures on English philology: a textbook]. Moscow. (In Russian).
- Bruner, K. (1993). Predstavlenie o cheloveke i koncepciya sociuma: dva podhoda k ponimaniyu obshchestva [The idea of a person and the concept of society: two approaches to understanding society]. THESIS, 1(3), 51-72. (In Russian).
- Camerer, C., Issacharoff, S., Loewenstein, G., O’Donoghue, T., & Rabin, M. (2003). Regulation for Conservatives: Behavioral Economics and The Case for “Asymmetric Paternalism”. University of Pennsylvania Law Review, 151(3), 1211-1254.
- Chernova, G. V. (2017). Strahovanie i upravlenie riskami: uchebnik dlya bakalavrov [Insurance and risk management: a textbook for bachelors]. Moscow: Yurayt. (In Russian).
- Danthine, J.-P., & Donaldson, J. (2015). Making Choices in Risky Situations. In Intermediate Financial Theory (pp. 55-86).
- Dudziński, P. (2019). The Effect of Nonmonetary Factors on the Demand for Insurance and Self-Insurance. Statistical Review, 65(1), 41-54.
- Eggertson, T. (2001). Ekonomicheskoe povedenie i instituty [Economic behaviour and institutions]. Moscow: Delo. (In Russian).
- Federate Service of State Statistics. (n.d.). Glavnaya stratitsa – Main page. (In Russian).
- Fillmore, Ch. (1988). Frejmy i semantika ponimaniya. Novoe v zarubezhnoj lingvistike. Kognitivnye aspekty yazyka [Frames and semantics of understanding. New findings in foreign linguistics. Cognitive aspects of language]. Progress, XXIII, 52-92. (In Russian).
- Garbarino, E., & Johnson, M. S. (1999). The different roles of satisfaction, trust and commitment in customer relationships. The Journal of Marketing, 63(2), 70-87.
- Ghimire, R. (2020). Situation Analysis of Insurance Services in Nepal. Byabasthapan Journal of Management Association of Nepal, 39(1).
- Grima, S., & Thalassinos, E. I. (2021). Editorial: Risk Management Models and Theories. Frontiers in Applied Mathematics and Statistics II, 7(5).
- Hands, U. (2012). Normativnaya teoriya racionalnogo vybora: proshloe, nastoyashchee, budushchee [Normative theory of rational choice: past, present, future]. Voprosy ekonomiki – Economic issues, 10, 52-75. (In Russian).
- Hayek, F. A. (2001). Individuualizm i ekonomicheskij poryadok [Individualism and economic order].Moscow: Izograf. (In Russian).
- Heine, P. (1997). Ekonomicheskij obraz myshleniya [Economic way of thinking]. Moscow: Catalaxia. (In Russian).
- Hoffman, I. (2003). Analiz frejmov: esse ob organizacii povsednevnogo opyta [Frame analysis: an essay on the organization of everyday experience]. Moscow: Institute of Sociology of the Russian Academy of Sciences. (In Russian).
- Hosseinzadehdastak, F., & Underdown, R. (2012). An analysis of risk management methods.
- Hsee, C., & Kunreuther, H. (2000). The Affection Effect in Insurance Decision. Journal of Risk and Uncertainty, 20(2), 141-159.
- Istomina, E. A., & Fedorova, M. Yu. (2018). Pravovoj mekhanizm upravleniya socialnymi riskami: monografiya [The legal mechanism of social risk management: a monograph]. Yekaterinburg: UIU RANEPA. (In Russian).
- Ivanov, O. B. (2017). Globalnye riski i tendencii sovremennogo mira [Global risks and trends of the modern world]. ETAP: ekonomicheskaya teoriya, analiz, praktika – STAGE: economic theory, analysis, practice, 1, 7-20. (In Russian).
- Kahneman, D., & Tversky, A. (2003). Racionalnyjvybor, cennostii frejmy [Rational choice, values and frames]. Psihologicheskij zhurnal – Psychology journal, 24(4), 31-42. (In Russian).
- Kapelyushnikov, R. I. (2013). Povedencheskaya ekonomika i “novyj”paternalism [Behavioral economics and “new” paternalism]. Voprosy ekonomiki – Economic issues, 10. (In Russian).
- Kenneth, D. M. (1998). A framework for managing risky situations. International Journal of Organizational Analysis, 6(1), 5-31.
- Khitrova, E. M. (2012). K voprosu o stimulirovanii sprosa na strahovye uslugi [On the issue of stimulating demand for insurance services]. Izvestiya IGEA – News IGEA, 6(86), 27-30. (In Russian).
- Khominich, I. P., Finogenova, Yu. Yu., Chelukhina, N. F., & Savvina, O. V. (2012). Strahovye mekhanizmy reformirovaniya social’noj sfery: sravnitel’nyj analiz rossijskoj i zarubezhnoj praktiki: monografiya [Insurance mechanisms of reforming the social sphere: a comparative analysis of Russian and foreign practice: monograph]. Moscow: Dashkov and Co. (In Russian).
- Knight, F. (1921). Risk, Uncertainty and Profit. Boston, Mass.: Houghton Mifflin.
- Kotlobovsky, I. B., & Sirichenko, N. V. (2017). Innovacionnye informacionnye tekhnologii dlya strahovoj otrasli [Innovative information technologies for the insurance industry]. Finansy –Finance, 9, 38-44. (In Russian).
- Lindenberg, S. (1985). An Assessment of the New Political Ecomony: Its Potential for the Social Sciences and for Sociology in Particular. Sociological Theory, 3(1), 99-114.
- Lomovtseva, A. V., & Trofimova, T. V. (2015). Postroenie sistemy strahovaniya riskov kak osnovnoj metod upravleniya hozyajstvennym riskom na predpriyatiyah [Building a risk insurance system as the main method of managing economic risk at enterprises]. Sovremennye problemy nauki i obrazovaniya – Modern problems of science and education, 1-1, 607. (In Russian).
- Louberge, H. (1998). Risk and Insurance Economics 25 Years After. Geneva Papers on Risk and Insurance – Issues and Practice, 23(4), 540-567.
- Minsky, M. (1979). Frejmy dlya predstavleniya znanij [Frames for the representation of knowledge]. Moscow: Energiya. (In Russian).
- Pantin, V. I., Malkov, S. Yu., & Grinin, L.E. (2018). Osnovnye ugrozy i riski Rossii pri perekhode k novomu mirovomu poryadku i puti ih minimizacii: Strategicheskij analiz [The main threats and risks of Russia in the transition to a new world order and ways to minimize them: A strategic analysis].Moscow: Uchitel. (In Russian).
- Polyakova, A. A., Kozhenchikova, N. Yu., & Dudareva, A. B. (2018). Sovremennye tendencii funkcionirovaniya rynka strahovyh uslug Rossii [Modern trends in the functioning of the insurance services market in Russia]. Upravlencheskoe konsul’tirovanie – Management consulting, 10. (In Russian).
- Pradhan, S., & Dave, A. (2018). Sigma 4/2017: In Insurance: Adding Value to Development in Emerging Markets (Report). Swiss Re Institute.
- Pyastolov, S. M., & Zadorozhnyuk, I. E. (2003). Psihologicheskij proryv v ekonomicheskoj teorii [Psychological breakthrough in economic theory]. Psihologicheskij zhurnal – Psychology Journal, 24(4), 29-30. (In Russian).
- Rating Agency Expert-RA. (2021). Ratings. (In Russian).
- Rejda, G. E., & McNamara, M. J. (2014). Principles of Risk Management and Insurance. Boston: Pearson.
- Rusetskaya, E. A., Kozel, I. V., & Rusetsky, M. G. (2013). Preimushchestva psihograficheskogo segmentirovaniya rynka strahovyh uslug [Advantages of psychographic segmentation of the insurance services market]. Finansovaya analitika: problemy i resheniya – Financial analytics: problems and solutions, 15(153), 48-55. (In Russian).
- Saksonova, S., & Kuzmina-Merlino, I. (2019). The principles of creating a balanced investment portfolio for cryptocurrencies. In I. Kabashkin, I. Yatskiv, & O. Prentkovskis (Eds.), Reliability and Statistics in Transportation and Communication.
- Schumpeter, J. (1989). Istoriya ekonomicheskogo analiza. Istoki [The history of economic analysis. Origins]. Moscow. (In Russian).
- Shaboltas, A. V. (2014). Risk i riskovannoe povedenie kak predmet psihologicheskih issledovanij [Risk and risky behavior as a subject of psychological research].Vestnik Sankt-Peterburgskogo universiteta – Bulletin of the Saint Petersburg University, 12(3), 5-16. (In Russian).
- Simon, G. (1995). Teoriya prinyatiya reshenij v ekonomicheskoj teorii i nauke o povedenii. Teoriya firmy [The theory of decision-making in economic theory and the science of behaviour. The theory of the company]. Saint Petersburg: Economic School. (In Russian).
- Simon, H. (1957). Models of Man: Social and Rational. New York: Wiley.
- Smith, A. (2009). Issledovanie o prirode i prichinah bogatstva narodov [Research on the nature and causes of the wealth]. Moscow: EKSMO. (In Russian).
- Thaler, R. (2017). Novaya povedencheskaya ekonomika. Pochemu lyudi narushayut pravila tradicionnoj ekonomiki i kaknaetomzarabotat [New behavioural economics. Why people violate the rules of the traditional economy and how to make money on it].Moscow: Eksmo. (In Russian).
- Vorontsovsky, A. V. (2021). Upravlenie riskami: uchebnik i praktikum dlya vuzov [Risk Management: textbook and workshop for universities]. Moscow: Yurayt. (In Russian).
- Weedige, S., Ouyang, H., Gao, Y., & Liu, Y. (2019). Decision Making in Personal Insurance: Impact of Insurance Literacy. Sustainability, 11(23), 6795.
- Weise, P. (1993). Homoeconomcus i Homosociologicus: monstry socialnyh nauk [Homo economcus and Homo sociologicus: monsters of social sciences]. THESIS, 3, 115-130. (In Russian).
-
Influence of consumer motivations and perception on the adoption of smart, green, and sustainable building materials
Rajendra P. ,
Mohanasundaram T.
doi: http://dx.doi.org/10.21511/im.19(4).2023.06
The purpose of this study is to analyze the barriers to the widespread use of smart, green, and sustainable building materials in the construction industry by focusing on the perceptions, motivations, strategies, and challenges faced by consumers. The analysis employed an exploratory methodology and surveyed 385 respondents in Bangalore, India. The study result shows a significant positive partial correlation (r = 0.629, p = 0.001) between the challenges of adoption and the overall factors that influence adoption after controlling the annual income as a control variable. The higher mean score of personal values and ethics of 4.25 implies that moral values and ethics influence the decisions on the adoption of construction materials. The findings of multiple regression with robust standard error revealed perception of performance of smart, green and sustainable building materials is better compared to traditional building materials (p-value = 0.001), factors positively influencing adoption (p-value = 0.004), motivating factors of adoption (p-value = 0.001) and strategies that encourage adoption of smart, green, and sustainable building materials (p-value = 0.001). All of these have a substantial influence on how consumers evaluate the government’s efforts to increase the adoption of such materials. However, challenges in adoption showed a negative coefficient (B= –0.049) and a robust standard error of 0.024 (p-value = 0.048), demonstrating a negative influence on consumers’ perception. This research acts as a guiding beacon for green adoption policies by studying consumer motivations and perceptions toward adoption of eco-friendly building materials for the sustainable future.
-
Development of the insurance market in Ukraine and forecasting its crises
Viktoriia Babenko-Levada
doi: http://dx.doi.org/10.21511/imfi.18(3).2021.32
Investment Management and Financial Innovations Volume 18, 2021 Issue #3 pp. 385-396 Views: 603 Downloads: 243 TO CITE АНОТАЦІЯInsurance market is an important part of the financial market, the functioning of which helps to protect individuals and legal entities from the negative and stressful effects of today’s unstable economic environment. The purpose of this study is to determine trends in the insurance market in Ukraine and its potential crises.
The study found that Ukraine’s insurance market constantly grows, but is volatile and in a state of concentration. The dynamics of most indicators are cyclical, with a cycle length from 4,66 quarters to 14 quarters.
The randomized R/S-analysis confirmed the stability of the dynamics of Ukraine’s insurance market and its fractal similarity. Fractal similarity was proved for six out of ten analyzed indicators of the insurance market. In addition, it was confirmed that at the moment of transition from one fractal to another, a trend break occurs. Thus, the emergence of crises on the insurance market of Ukraine is associated with the self-similarity of the dynamics and the coincidence of the moments of bifurcation of certain indicators in its development. A partial crisis on the Ukrainian insurance market at the beginning of 2019 coincided with the bifurcation of the number of concluded insurance contracts, determined based on the results of fractal analysis.
Calculations made it possible to conclude that potentially crisis periods for the insurance market of Ukraine fall on Q1-2 2017, Q1 2019, Q1 2020, of which only one was realized (Q1 2019). The nearest potential moments of crises on the insurance market of Ukraine may be the following periods: Q1 2023 and Q1 2026.
