Combining of quantitative and qualitative analysis in risk management using Pareto distribution: A case study of an insurance company

Authors

  • Khelid Boudaoud University of Algeria3 (Algeria)
  • Khelid Aicha University of Blida2 (Algeria)

Keywords:

risk, quantitative and qualitative risk analysis, Pareto Distribution, insurance company

Abstract

The study aims to create a probability distribution that seeks to analyze and assess the main risks faced by the company. To this end, Pareto Distribution was used in risk management, which provides a useful analytical framework for many risks through its probabilistic distributions, ranking risks from the most impactful to the least impactful, achieving the principle of symmetry (80% of effects come from 20% of causes). This allows for the organization of risk mitigation measures at points of weakness. The results obtained through Pareto Distribution indicated that a small portion of the risks explain a large part of the potential losses for the company's portfolio in the future. Additionally, we found a relationship between the main risks and the strategic response adopted by the company, along with effect size from those risk-driving variables.

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Published

2025-01-14

How to Cite

Boudaoud, K., & Aicha, K. (2025). Combining of quantitative and qualitative analysis in risk management using Pareto distribution: A case study of an insurance company. International Journal of Economic Perspectives, 19(1), 141–161. Retrieved from https://ijeponline.org/index.php/journal/article/view/849

Issue

Vol. 19 No. 1 (2025)

Section

Peer Review Articles
Copyright & Licensing

Copyright (c) 2025 Khelid Boudaoud, Khelid Aicha

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