Efficiency and Productivity of Indian Life Insurance Industry

Kalyan Chakraborty; Anirban Dutta; Partha Pratim Sengupta

doi:10.1515/2153-3792.1164

Article

Efficiency and Productivity of Indian Life Insurance Industry

Kalyan Chakraborty , Anirban Dutta and Partha Pratim Sengupta

Published/Copyright: December 13, 2012

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From the journal Asia-Pacific Journal of Risk and Insurance Volume 7 Issue 1

Abstract

This paper investigates technical efficiency and productivity growth in Indian life insurance industry in the era of deregulation. The empirical study uses DEA method and Malmquist productivity index to measure and decompose technical efficiency and productivity growth, respectively. The results suggest that the growth in overall productivity is mainly attributed to improvement in efficiency. Higher pure technical efficiency and lower scale efficiency indicate the insurance firms have generally, moved away from the optimal scale over the study period. The truncated regression exploring the main drivers of efficiency in the long run found claims ratio, distribution ratio, and firm-size influence technical efficiency positively. The study also found firms that had both life and non-life businesses are more efficient than firms that has only life insurance business.

Keywords: DEA; productivity; efficiency; insurance; India

Published Online: 2012-12-13

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Articles in the same Issue

https://doi.org/10.1515/2153-3792.1164

Keywords for this article

DEA; productivity; efficiency; insurance; India