Abstract:

It is still a widely held view that the insurance sector is not technologically advanced as, for example, banking sector. It seems that insurers follow other sectors’ innovations and pick them up with great delay. However, this view is superficial. Despite there are few breaking news about real technological breakthroughs in insurance, the insurance market is going through revolutionary change. Internet of Things, Telematics and sensor technologies, Machine Learning (MA) with intelligent automation, growth of Cyber insurance, Big Data analytics and online ecosystems with cloud computing will significantly change the landscape of the insurance services market.

In this paper, a multi-criteria decision-making methodology (MCDM), Analytical Hierarchical Process (AHP), is applied in the Latvian insurance market to assess the strategic decision making criteria. As soon as nowadays managers have high risk of contradiction in pairwise comparisons due to market dynamics and high level of uncertainty, the proposed evaluation model is based on the use of the consistency-driven linguistic methodology. We employed linguistic terms approach to observe the perspective of vagueness and uncertainty of alternatives and criteria weights in order to deal with the inconsistency in the pairwise comparison method. It is extremely useful in contradicted decisions where an interval of linguistic variables is more preferable for experts during uncertainty situations.

The subject of the study is the influence of digitalization on customer preferences and development of Latvian insurance companies’ strategies.

The purpose of this work is to study the development of insurance company strategies based on the shift of the perception values of clients, employees and owners of insurance companies in the era of digital transformation.