RISK SELECTION FOR PROPERTY DAMAGE FIRE INSURANCE TO SUPPORT BUSINESS STRATEGY DEVELOPMENT (CASE STUDY AT PT ASURANSI TUGU PRATAMA INDONESIA)

• Main Author: Budiman, Arief
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/42415
• Institution: Institut Teknologi Bandung

In this rapidly growing insurance business with hard competitive market condition where insurance companies are trying to get business aggressively. Property damage fire insurance is one of general insurance products which are required by most industries in Indonesia. Risk selection one of important step during acceptance process to know the risk level of insured property. It gives a basic need of underwriters to determine risk appetite, insurance policy term & condition. Common problems during risk selection faced by insurance company such as poor risk selection quality due to inadequate methods. Covering high risk level of client facility can increase claim loss exposure. This research aims to provide appropriate and measurable risk selection method in order to reach the organization profit and growth. Managing risk through appropriate risk selection can reduce and minimize loss exposure. Despite the necessity, many Insurance company rarely carry out detailed risk selection and to be part of business strategy. Linking to organization business strategy, portfolio result of risk selection can become important source for determining risk appetite. This research is based on Risk Management ISO 31000 steps to identifying and responding the risk. Analytic Hierarchy Process (AHP) is used to convert expertized risk engineer judgments to be quantitative weight of risk factors. Following the ISO 31000 framework, risk profile of insured property can be measured by multiplying likelihood and impact. Based on risk matrix score result, the organization can do risk treatment whether the risk is avoided, or reduced and shared and accepted. Risk level score which is obtained from risk matrix is used for underwriter decision on insurance risk acceptance process.