scholarly journals An Analysis of Efficiency of General Insurance Industry in India

2020 ◽  
Author(s):  
Abhijit Sinha ◽  
Kalpataru Bandopadhyay
Keyword(s):  
Public Sector ◽  
Insurance Industry ◽  
Secondary Data ◽  
Annual Reports ◽  
Data Envelopment ◽  
The Public ◽  
Insurance Sector ◽  
Life Insurers ◽  
Significant Difference ◽  
Using Data

It is well known that the overall insurance sector in India has been undergoing a series of reforms from time to time. The drastic change that re-designed the contours of the industry is the implementation of the Malhotra Committee Recommendations which opened up the landscape to the private non-life insurers in 2000. The present study has been taken up to determine the efficiency of the non-life sector and the insurers using Data Envelopment Analysis (DEA). The empirical research also aims to statistically test whether there is any year-wise significant difference between the two sectors in respect of the overall efficiency. For the purpose, appropriate statistical test is applied. The study is based on secondary data collected from the Insurance Regulatory Authority of India (IRDA) Annual Reports. The sample size for this study is twelve including all the four insurers from the public sector and the remaining from the private sector. The results of the analysis showed that in terms of technical and pure technical efficiency, the overall result of the public sector surpasses that of the private. However, the findings of the Mann-Whitney U Test revealed that the result with respect to the statistical difference is mixed.  

Evaluating the Efficiency of Indian Life Insurance Sector

2020 ◽  
pp. 72-80
Keyword(s):  
Life Insurance ◽  
Secondary Data ◽  
Private Life ◽  
Annual Reports ◽  
Insurance Companies ◽  
Operating Characteristics ◽  
Entire Study ◽  
Insurance Sector ◽  
Life Insurers ◽  
Using Data

ABSTRACT The purpose of study was to investigate the technical efficiency of Indian life insurance companies using data envelopment analysis (DEA) to find the reasons for inefficiency. It aimed to analyze the efficiency of all the 24 life insurance companies operating in India for the period 2013-2017 using DEA based on secondary data collected from the Insurance Regulatory and Development Authority Annual Reports. Findings indicated that the state life insurer, that is, Life Insurance Corporation (LIC) was efficient throughout the entire study period. The private life insurance companies exhibited variations in their performance levels as they were comparatively new in the life insurance sector and of different sizes. Some private life insurers operated efficiently, while some private life insurers were less productive using excessive capital; on the other hand, few life insurers grew fast using technology. The methodology employed in this study estimates relative efficiencies without assuming any functional form; as a result, the proper comparison of input utilized with the output produced was not possible. The study brought into light the operating characteristics and efficiencies of all the Indian life insurance companies during the period 2013-2017 and therefore holds important insights for policy makers and practitioners as well as for the decision makers.

scholarly journals Performance of Malaysian Insurance Companies Using Data Envelopment Analysis

2018 ◽  
Vol 11 (3) ◽  
pp. 1147 ◽  
Author(s):  
Ng Jia Bao ◽  
Rohaizan Ramlan ◽  
Fazeeda Mohamad ◽  
Azlina Md Yassin
Keyword(s):  
Data Envelopment Analysis ◽  
Insurance Industry ◽  
Secondary Data ◽  
Efficiency Score ◽  
Equity Capital ◽  
Insurance Companies ◽  
Data Envelopment ◽  
Insurance Company ◽  
Policy Makers ◽  
Using Data

The purpose of this study is to evaluate the performance of the local insurance in Malaysia for the period 2014-2015. The major challenge in the insurance industry is increasing competition in this market. Besides that, problematic in performance measurement to evaluate performance is another challenge in insurance industry. 24 local insurance companies involved in this study using quantitative method of Data Envelopment Analysis (DEA) output-orientation CCR model. This study utilizes three inputs and three outputs; operating expenses, equity capital and commission as well as net premium, net investment income, and net incurred claim. The secondary data sources were derived from official data of local insurance companies’ annual report respectively. The DEA-Solver-LV version 8 tools were used to analyze the data that have been collected to evaluate the performance of local insurance company. This DEA model allows integration of the performance for the insurance companies and provides management overall performance evaluation. The results showed that there are 8 efficient companies in 2014 and 9 efficient companies in 2015. The average efficiency score in 2014 was increased from 78.9% to 79.1% in 2015. The findings from this study will benefit the insurance associations in Malaysia, management of insurances companies and policy makers.

scholarly journals Are General Insurance Companies Efficient in their Performance? – A Comparison

2018 ◽  
Vol 17 (3) ◽  
pp. 1-7
Author(s):  
P Muthulakshmi
Keyword(s):  
Public Sector ◽  
Secondary Data ◽  
Insurance Companies ◽  
Return On Equity ◽  
The Public ◽  
Insurance Sector ◽  
Geographic Boundaries ◽  
General Insurance ◽  
Income Ratio ◽  
Equity Ratio

The insurance sector has witnessed significant changes in the last few years, specifically due to the effects of liberalisation, globalisation, and privatisation. It is imperative to compare and study the earnings and profitability of public sector non-life general insurance companies in India. The public sector non-life general insurance companies are competing with each other, and also with the private players in the same industry and thereby reducing the processing costs and facilitating the innovation of different types of policies across the geographic boundaries. In this paper, secondary data is used to analyse the earnings and profitability of non-life general insurance companies in India by using certain ratios which are available exclusively to evaluate the performance of insurance companies such as Claim Ratio, Expenses Ratio, Combined Ratio, Investment Income Ratio and Return on Equity Ratio.   , , , Ratio Analysis

A DEA-investigation of efficiency of the Indian general insurance during recession

2014 ◽  
Vol 11 (1) ◽  
pp. 115-136 ◽  
Author(s):  
Santanu Mandal ◽  
Surajit Ghosh Dastidar
Keyword(s):  
Malmquist Index ◽  
Secondary Data ◽  
Annual Reports ◽  
Insurance Companies ◽  
Operating Characteristics ◽  
Content Type ◽  
Insurance Sector ◽  
General Insurance ◽  
Using Data ◽  
The Impact

Purpose – The purpose of this paper is to investigate the efficiency analysis of the Indian general insurance sector using data envelopment analysis (DEA) and subsequently assess the impact (if any) of the global slowdown on the performance of the allied sector. Design/methodology/approach – The paper aims to analyze the operating performance of 12 general insurance companies in India between 2006-2007 and 2009-2010 using DEA based on secondary data collected from Insurance Regulatory and Development Authority Annual Reports. Findings – Findings clearly indicate that the global economic slowdown has severely affected the performance of the private sector companies; while the public sector companies exhibited relatively lesser variation in performance levels. Research limitations/implications – The methodology employed in the study estimates relative efficiencies without assuming any functional form; as a result the proper comparison of input utilized with the output produced is not possible. Several other tools like Malmquist Index and two-stage procedure have not been used. Originality/value – The study brings into light the operating characteristics and efficiencies of the Indian general insurance sector during the global slowdown and therefore holds practical value for policy makers and practitioners as well as for the decision makers of the firms employed in the study.

scholarly journals An Analysis of the Performance of General Insurance Companies in India

2019 ◽  
Vol 8 (1) ◽  
pp. 20-27
Author(s):  
Soheli Ghose ◽  
Raman Kumar
Keyword(s):  
Insurance Industry ◽  
Secondary Data ◽  
Annual Reports ◽  
Insurance Companies ◽  
Insurance Sector ◽  
General Insurance ◽  
Growth Prospects ◽  
Rapid Pace ◽  
The Stability ◽  
Pro Forma

The General Insurance Industry in India is growing at a very rapid pace. This is an empirical research based on secondary data collected from Annual Reports and Pro-forma Schedules of IRDA. An Excel data Model was created to taken in the core figures of GWP, NEP, NP and others of 4 General Insurance Majors to calculate other relevant ratios as need for the analysis. The objectives of this study are to analyze a few General Insurance companies in India and core Ratios related to the Insurance Sector only and to comparatively analyse Retention ratio, Total Claims Incurred, Earned Incurred Loss Ratio, and Combined Ratio. The conclusion report has been framed on the basis of which company seems to be the best with respect to its Future Growth prospects, Risk prospects and the stability of its growing business. Out of the companies analyzed, TATA-AIG GENERAL INSURANCE has a good future prospect.

scholarly journals A comparative analysis of the efficiency of life and non-life sectors in selected CEE countries

2021 ◽  
Vol 34 (2) ◽  
pp. 279-290
Author(s):  
Maja Pervan ◽  
Tomislava Pavić Kramarić ◽  
Marijana Ćurak
Keyword(s):  
Technical Efficiency ◽  
Life Insurance ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Eastern European ◽  
Insurance Sector ◽  
Life Insurers ◽  
Significant Difference ◽  
Eastern European Countries ◽  
Post Hoc

Purpose: The aim of this paper is to analyze overall technical efficiency (OTE), pure technical efficiency (PTE) and scale efficiency (SE) of both life and non-life insurance sectors in three Central and Eastern European countries (CEE), i.e. Croatia, Hungary and Poland, in 2018. Methodology: The efficiency of insurance sectors is estimated by applying data envelopment analysis (DEA), while a one-way analysis of variance (ANOVA) is performed to find out whether there exists any statistically significant difference between the estimated levels of the efficiency of non-life and life insurance sectors in the observed CEE countries. Results: Out of 34 non-life Polish insurers, only two (6%) were overall technically efficient, while the remaining 32 were inefficient. Croatia and Hungary achieved better results with three (20%) and seven (43.7%) efficient insurers, respectively. However, when observing the life insurance segment, half of the Croatian life insurers were efficient according to the CCR model, while six (23%) Polish and three (23%) Hungarian efficient insurers were recorded. Conclusion: Research reveals that the Hungarian non-life insurers are the most efficient ones in terms of OTE, PTE and SE. They are followed by the Croatian insurers, leaving the Polish insurers behind. Regarding the life insurance sector, the domination of the Croatian insurers is recorded, while the Hungarian ones were found to be the least efficient. Moreover, inefficiency in both life and non-life sectors (except for the Hungarian life sector) is more related to scale than to managerial inefficiency. Finally, ANOVAs and Tukey post hoc tests revealed a statistically significant difference among considered groups of insurers.

scholarly journals Analisis Perbandingan Efisiensi Pembiayaan BUS dengan BPRS di Jawa Barat Tahun 2017-2019

2021 ◽  
Vol 1 (2) ◽  
pp. 82-97
Author(s):  
Jasmin Bunga Islami ◽  
Trisiladi Supriyanto ◽  
Lili Puspita Sari
Keyword(s):  
Data Envelopment Analysis ◽  
Financial Services ◽  
Commercial Banks ◽  
Secondary Data ◽  
T Test ◽  
Data Envelopment ◽  
Quantitative Methodology ◽  
Operating Profit ◽  
Significant Difference ◽  
Using Data

The development of Islamic banking in Indonesia is increasingly progressing quite rapidly. This development is evidenced by the increasing total number of Islamic commercial banks, as well as the very large number of Islamic people's financing banks. This study aims to investigate the comparison between BUS and BPRS. This study uses a quantitative methodology with data analysis techniques using Data Envelopment Analysis (DEA), and a different test using an independent sample t-test. The population used is 5 Islamic Commercial Banks (BUS) and 5 Sharia People's Financing Banks (BPRS) in West Java with data samples of fixed assets, savings, operational costs, financing, and operating profit. This study uses secondary data sourced from the official website of the Financial Services Authority. The results of this study are that BPRS has a higher average efficiency level than BUS, and there is no significant difference between BUS efficiency and BPRS in 2017, 2018, and 2019 based on DEA CRS and DEA VRS.Berkembangnya perbankan syariah di Indonesia semakin memiliki kemajuan yang cukup pesat. Perkembangan ini dibuktikan dari angka total bank umum syariah yang meningkat, serta angka bank pembiayaan rakyat syariah yang berjumlah sangat besar. Penelitian ini bertujuan menginvestigasi perbandingan antara BUS dengan BPRS. Penelitian ini memakai metodologi kuantitatif dengan teknik analisis data memakai Data Envelopment Analysis (DEA), serta uji beda menggunakan sampel independent t test. Populasi yang digunakan adalah lima Bank Umum Syariah (BUS) dan lima Bank Pembiayaan Rakyat Syariah (BPRS) di Jawa Barat dengan sampel data aset tetap, simpanan, biaya operasional, pembiayaan, dan laba operasional, kemudian data sekunder yang bersumber dari website resmi Otoritas Jasa Keuangan. Hasil dari penelitian menjelaskan bahwa BPRS memiliki rata-rata tingkat efisiensi yang lebih tinggi dibandingkan dengan BUS, serta tidak terdapatnya perbedaan yang signifikan antara efisiensi BUS dengan BPRS pada tahun 2017, 2018, dan 2019 berdasarkan DEA CRS maupun DEA VRS.

scholarly journals Evaluating the nationalization & privatization effect: a case of Indian banking industry

2018 ◽  
Vol 13 (1) ◽  
pp. 11-21 ◽  
Author(s):  
Manju Rajan Babu ◽  
Ashok Kumar M.
Keyword(s):  
Data Envelopment Analysis ◽  
Public Sector ◽  
Banking Industry ◽  
Data Envelopment ◽  
Financial Reports ◽  
The Public ◽  
Public Sector Banks ◽  
Effective Performance ◽  
Using Data ◽  
Indian Banks

The facilitation of economic transactions and friendly investor environment is undertaken through effective performance of financial systems. Mobilization of savings and funding the profitable business opportunities are essential in improving the efficiency of intermediation. The study aims to evaluate the effects of nationalization and privatization on Indian banks. Various factors have been considered to examine the effects of privatization and nationalization, including sources of public sector inefficiency, measures of firm performance, econometric issues, and the mode of privatization. The data was collected for the period of 1998 to 2016 from Indian banks. Data Envelopment Analysis (DEA) was used to evaluate the financial reports of the banks selected to evaluate the efficiency of input and output variables. Positive results were observed, concerning the efficiency and profitability of banking industry after banks’ privatization. Performance of private banks has been observed effective and efficient as compared to the public sector banks. Privatization of banks must be increased and maintained to sustain the efficiency of the banks and implement strategies to maintain the assets. Future studies may recruit more appropriate sample size to evaluate the privatization and nationalization effects of Indian banking industry. Greater number of banks will provide more precise results, using data envelopment analysis.

scholarly journals Adequacy of DEA in Measuring the Efficiency of Public Sector Entities in Nigeria: A Comparative Analysis Approach

2020 ◽  
Vol 12 (5(J)) ◽  
pp. 13-22
Author(s):  
Odewole, Philip Olawale
Keyword(s):  
Public Sector ◽  
Health Sector ◽  
Secondary Data ◽  
Data Envelopment Analysis Model ◽  
Personnel Cost ◽  
Continuous Assessment ◽  
Analysis Model ◽  
The Public ◽  
Using Data ◽  
Cost Utilization

The study examined the efficiency of Decision- Making Units (DMUs) in the public sector entities in Nigeria. The study focused on the efficiency in the utilization of personnel cost releases to the federal educational and health institutions by the Federal Government of Nigeria. Secondary data were sourced from the Annual General Warrants from Audited financial statements of the Public Sector entities. Sampled size for the study comprised twenty-five (25) DMUs each from both sectors out of the major Federal Ministries from four (4) geo-political Zones and Abuja. Data were analyzed using Data Envelopment Analysis Model (DEA). The results of the average efficiency scores from both Charnes, Cooper and Rhodes Model (CCR) and Banker, Charnes and Cooper (BCC) on the DMUs showed that the sectors were marginally inefficient. The summary of the overall results therefore revealed that the DMUs under health sector performed averagely better than education sector in the utilization of personnel cost allocations. The study recommended that a central monitoring team be created jointly by the Federal Ministry of Finance and Accountant-General’s office to ensure full utilization of personnel cost releases to the DMUs. The study therefore concluded that only continuous assessment and periodic appraisal of the personnel cost utilization by the supervising ministries, can guarantee full efficiency in the utilization of personnel cost releases.

Analysis of Cost Efficiency of Indian Life Insurers: A comparison of Quantity vs Value based DEA Approach

2019 ◽  
Vol 14 (1) ◽  
Author(s):  
Subir Sen
Keyword(s):  
Life Insurance ◽  
Cost Efficiency ◽  
Insurance Industry ◽  
Estimation Method ◽  
Private Life ◽  
The Public ◽  
Advantages And Disadvantages ◽  
Life Insurers ◽  
The Difference ◽  
Using Data

Abstract In the context of measuring economic performance, efficiency and productivity of Indian life insurance firms, there are studies using the Data Envelopment Analysis (DEA) methodology. In this paper, the difference between the quantity based approach and value based approach is highlighted and elaborated using data of Indian life insurers operational over the period 2005–06 to 2015–16. There are both advantages and disadvantages of using DEA, as highlighted in the theoretical literature. In particular, the efficiency estimates are heavily influenced by the selection of inputs and outputs. This study provides an insight on technical efficiency and innovates in terms of data use and is the first study on the Indian insurance industry to compute cost and allocative efficiencies. Four hypotheses were tested in the study. First, there were initially improvements in efficiency but in recent years, clearly there is stagnation. Second, the results support views of Tone and Sahoo (2005)  and Sen (2010), that the public life insurer, the Life Insurance Corporation of India is cost inefficient. The private life insurers need to reallocate resources to improve overall efficiency. LICI was found to be technically efficient but remained cost inefficient. Third, the traditional Farrell based cost efficiency estimates are significantly different from Tone (2002) alternative approach. Therefore, choice of estimation method is important. Fourth, non-discretionary factors such as age, premium growth and size of the insurers along with regulations pertaining to solvency affect cost efficiency. Key financial ratios such as expense ratio, commission ratio, conservation ratio and persistency ratio, and retention ratio are used to statistically establish their relationship with the different efficiency estimates. Results also show that entry of a new insurer may negatively affect cost efficiency of an existing insurer but foreign equity could positively improve cost efficiency.

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