Fuzzy logic model as a predictor of potential critical operation of an insurance company

Abstract

In this paper the fuzzy logic model is presented in order to determine if it is risky for the operation of an insurance company to extend the contract with existing insured persons on the basis of the cash flow and the number of their liquidated damage claims. The fuzzy logic process consists of two input variables (the amount and number of liquidated damage claims of one client) and one output variable, the risk. The risk assessment is determined by using fuzzy risk matrix. The main focus of this paper is the attempt to form a model to alarm possible critical operations of clients which would quantify the relative impact of possible risks which could endanger the insurance company operation.