Performance Evaluation of Insurance sector using Balanced Scorecard and Hybrid BWM-TOPSIS: evidence from Iran

Abstract

The insurance industry, as one of the most important service sectors in the world, has always been researched. Improving the performance of this industry can have a huge impact on other manufacturing and service sectors. The objective of this study is to evaluate the performance of insurance companies using balanced scorecard (BSC) and Multi Criteria decision-making (MCDM), with case studies on companies located in north of Iran. Three insurance companies were selected. The outline of our approach is as follows: First, via theoretical studies, the primary criteria were identified in four BSC performance dimensions and they were provided to experts. Then, nine criteria were selected to measure the performance of insurance companies based on BSC, where Best Worst Method (BWM) was used to weight the criteria. The results of BWM showed that increasing service is the most important criterion to be used for performance measurement. Also, metrics such as: improving quality of services for attracting new customers in addition to existing customers, flexibility in the service system, investing in customer education, knowledge sharing, sustainable of organization's financial resources, revenue growth, perform the process of issuance and compensation with the least amount of error and invention and innovation in doing things ranked second to ninth in terms of importance, respectively. BSC views ranked first to fourth, customer, growth and learning, financial, and internal processes, respectively. Consequently, a decision matrix was developed to measure the performance and ranking of insurance companies. Insurance companies were ranked by The Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS).