A New Risk Management Model for Auto Insurance in Serbia

Abstract

The importance of the automotive industry is significant in every country and economy. It affects the economic development of the country, and in the last decade, the number of vehicles has been increasing every day, and hundreds and millions of vehicles are now traveling around the world. As a consequence, motor vehicle insurance is one of the most important branches of insurance. In this paper, we consider a general risk management model of motor vehicle insurance that is actually in Serbia. We propose a change of this model and a modification in order to reduce the risk in car insurance, as well as to provide insurance to users with better service, in accordance with characteristics of vehicles. Modification of risk management model is based on the mathematical approach and appropriate data analysis.