DOI: 10.17233/sosyoekonomi.2026.03.20 ISSN: 1305-5577

Risk Assessment in Motor Insurance Using Generalised Linear Models in Small Markets: The Case of Bosnia and Herzegovina

Safet Kozarevic, Slađana Filipović
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Given the challenges of small and underdeveloped markets, a comprehensive approach to insurance risk analysis is essential. This paper develops and applies an actuarially justified and statistically robust methodology for motor insurance pricing in Bosnia and Herzegovina. The adequacy of Generalised Linear Models (GLMs) is assessed using a portfolio dataset covering 2011-2023, focusing on key policyholder and vehicle risk factors affecting claim frequency and severity. Comparison with existing market tariffs indicates that current premiums are generally underpriced. The proposed approach offers practical guidance for improving pricing accuracy and strengthening actuarial practices in such insurance markets.

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