Strategic Management - International Journal of Strategic Management and Decision Support Systems in Strategic Management

The Application of Stochastic ICIM Model in the Decision-Making Processes of Insurance Product Management

Zsolt SIMONKA — 2025-09-30

Background: The significance of this study arises from the increasing complexity of managing insurance products, driven by the need to accurately model and predict the occurrence of insured events and associated risks. These processes are relevant not only to life insurance companies but to any institution offering personal insurance and supplementary coverages, such as banks, brokerage firms, and others. Existing literature highlights extensive possibilities for the application of stochastic processes in various fields, including finance, biology, and environmental engineering, with notable applicability in insurance.

Purpose: This article aims to explore the application of stochastic models in the decision-making processes for managing insurance products. Specifically, it focuses on the development and utilization of multi-state models for pricing selected insurance products and analysing the impact of parameter changes on the amount of regular net premium.

Study design/methodology/approach: We start with the traditional 'Healthy-Dead' model, which we extend to include the 'Sick' state. By restricting the transition from this state to the 'Healthy' state, we obtain a three-state 'Healthy-Sick-Dead' model for incurable critical illness. This is a non-homogeneous Markov process characterized by the respective transition probabilities. Actuarial calculations of transition probabilities are based on specific statistical data from an unnamed insurance company. The resulting regular net premium represents the real (net) price of the supplementary insurance product for incurable critical illness.

Findings/conclusions: The main findings suggest that incorporating stochastic models into the creation and management of insurance products allows for more accurate predictions of insured events and better risk assessment. The introduced three-state model provides a robust framework for pricing supplementary insurance due to incurable critical illness. The analysis demonstrates how changes in transition probabilities affect the amount of net premium, underscoring the importance of precise parameter estimation.

Limitations/future research: The study's limitations include reliance on accurate historical data, which may not fully capture future trends and changes in health outcomes, as experienced during the Covid-19 pandemic. Future research should explore the integration of a larger amount of real data and advanced computational methods for their processing. Additionally, extending the model to include the 'recovery' transition would enhance its applicability for 'all' types of critical illnesses. The creation of such an insurance product would, however, assume the availability of a large amount of high-quality data (Schmidt, 2021).

Refining resource management in healthcare delivery processes: Should we look at technology changes another way?

Marton Vilmanyi — 2025-09-30

Abstract

Background: Today's health organizations are under increasing pressure to meet a range of sometimes conflicting, often divisive goals. Consequently, they need to maximize the value created for patients as an overarching goal. Value can be addressed through organizational processes managed through activities, actors and resources. Managers perceive this interaction process mainly through resource and cost dimensions. However, the extent of the change in resources, i.e. the change in value creation caused by a new technology, has not yet been investigated.

Purpose: In our study, we examine the consequences of technological alterations resulting in a change regarding resources that impact value creation. We seek to describe the change patterns in resource compositions that occur when introducing a new technology into an organizational process.

Study design/methodology/approach: We adopted a case study method with a process perspective, where we applied the Time-Driven Activity-based Costing (TDABC) framework to capture the managerial perspective on cost and resource management related to value creation. Five healthcare protocols implemented using different technologies (face-to-face and telemedicine) were analyzed.

Findings/conclusions: Resource changes due to technological modifications seemingly occurred without a distinct pattern. However, we could confirm that the changes not only affected activities in areas where new resources were introduced, but also had spillover effects. Our results reveal that the extent of changes caused by technological alterations can be determined through changes detected in information. The results highlight the importance of the extent of change and information management.

Limitations/future research: The most significant limitation to generalizing our findings is the research context itself. The sector-specific characteristics of the healthcare sector limit the generalizability of our results. Another limitation is the number of observed cases and our research method. This suggests the need for further research, as it seems justified to test the TDABC methodology on multiple other cases.

The euro exchange rate’s resistance to the exogenous shock caused by COVID-19

Suzana Balaban — 2025-09-30

Background: The COVID-19 pandemic represents the greatest exogenous global shock in the last few decades, which has deeply affected the macro-economic aggregates around the world. Bearing in mind that COVID–19 pandemic is an exogenous shock; its effect on the macro-economic aggregates will take time to be analysed, while it has a persistent impact on the financial markets.

Purpose: One-third of the transactions worldwide includes the euro. Hence, the main objective of this study is to estimate the euro exchange rate’s resistance to the exogenous shock caused by the COVID-19 pandemic.

Study design/methodology/approach: This paper employs the General AutoRegressive Conditional Heteroskedasticity (GARCH) model to examine the EUR/USD exchange rate’s resistance to the global exogenous shock caused by the COVID–19. In other words, the authors try to find an answer to question whether the COVID–19 pandemic affects the EUR/USD exchange rate volatility.

Finding/conclusions: The results show that the COVID–19 pandemic has no effect on the EUR/USD exchange rate volatility in the long run. These results may confirm our assumption of the resistance of the financial market to the exogenous shock and are useful for anyone needing forecasts of the exchange rate futures movements. The obtained results produce pragmatic expertise in order to manage exchange rate risk and should support policymakers to advance exchange rate policy.

Limitations/future research: As a limitation of this study, the authors state the estimation of the euro exchange rate`s resistance to only one exogenous shock, caused by COVID-19. Bearing in mind that in the considered period was also the world economic crises which might have caused a higher volatility then COVID-19, for further research the authors propose an examination of the detailed estimation of the euro exchange rate`s resistance to different exogenous shocks.

Socially Responsible Behavior of Companies from the Young Generation Perspective – an Empiric Study from Four European Union Member States

Miriama Blahušiaková — 2025-09-30

Background: Since adopting the Non-Financial Reporting Directive, companies have been required to report information on environmental, social, and employee matters. After adopting the Corporate Sustainability Reporting Directive and its gradual transposition into the European Union (EU) Member States' national legislation, the Environmental Social, and Governance (ESG) reporting requirements are becoming stricter to ensure transparency and comparability of reported sustainability information, to prevent greenwashing, and to ensure that companies behave in a socially responsible manner to the environment, society, and governance, and report this information in the Sustainability Report.

Purpose: The paper aims to analyze how the young generation from four different EU member states perceives companies' socially responsible behavior and what importance they give to various attributes of corporate social responsibility.

Study design/methodology/approach: To meet the paper's purpose, a standard methodology of legislation and literature review was performed. Afterward, a questionnaire survey was conducted in which the attitudes of the young generation to the socially responsible behavior of companies were investigated. Software SAS Enterprise Guide and SAS programming language have been used for the analysis.

Findings/conclusions: The research results showed that the young generation perceives social responsibility in companies’ behavior and takes it as a competitive advantage in the market. The results, among others, showed which aspects of responsible business are the most important for the young generation. The young people were able to name socially responsible companies, and according to their responses, they would prefer to buy products or services from companies that behave responsibly to society and the environment, even if these products or services were more expensive.

Limitations/future research: The paper analyzes the attitudes only of the young generation which can be a limited factor in the research. More detailed analysis within all the age groups could bring different results. The number of respondents is another limitation.

Business process redesign as a basic aspect of digital business transformation

Rajko Ivanišević — 2025-09-30

Background: It is widely accepted that the digital transformation of business is increasingly attracting the attention of researchers from the academic circles as well as professionals from the business community. The main consequence of this lies in the daily development of new and improvement of existing digital technologies. The outcomes of such events on the market are reflected in all aspects of companies’ operations. For this reason, they are constantly looking for various improvements to their business, which most often include the implementation of new technology. Mere implementation of a new technology without any other changes very often leads to failure. The core of this failure can be found and attributed to inadequately identified, analysed, documented and established business processes. Business process management (BPM) and redesign as its integral part are actually an indispensable segment of a successful process of digital business transformation. Therefore, the digital transformation of business should not be viewed exclusively from a technological perspective, but also from a process viewpoint.

Purpose: With the aim of shedding additional light on the connection between business process management and digital business transformation, the paper aims to identify and explain the importance of business process redesign.

Study design/methodology/approach: For the purposes of this paper, a systematic literature review was conducted.

Findings/conclusions: The result of the conducted research indicates that a process approach to the digital transformation of business can contribute to significantly different, more successful results.

Limitations/future research: Limitations refer to the number of databases searched during this systematic literature review. Subsequent research could include additional sources that would include additional works that can contribute to a better research result.