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Efficiency and Productivity of Indian Life Insurance Industry

Author

Listed:
  • Chakraborty Kalyan

    (Emporia State University, Emporia)

  • Dutta Anirban

    (School of Management, National Institute of Technology, Agartala)

  • Sengupta Partha Pratim

    (National Institute of TechnologyNITD), Durgapur)

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.

Suggested Citation

  • Chakraborty Kalyan & Dutta Anirban & Sengupta Partha Pratim, 2012. "Efficiency and Productivity of Indian Life Insurance Industry," Asia-Pacific Journal of Risk and Insurance, De Gruyter, vol. 7(1), pages 1-28, December.
    • Handle: RePEc:bpj:apjrin:v:7:y:2012:i:1:p:1-28:n:5
    DOI: 10.1515/2153-3792.1164
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    References listed on IDEAS

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    Cited by:

    1. Anirban Dutta, 2013. "Impact of Privatization on Productivity: A Non-Parametric Analysis of Indian Insurance Sector," Global Business Review, International Management Institute, vol. 14(2), pages 297-314, June.
    2. Suvvari Anandarao & S. Raja Sethu Durai & Phanindra Goyari, 2019. "Efficiency Decomposition in two-stage Data Envelopment Analysis: An application to Life Insurance companies in India," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 17(2), pages 271-285, June.
    3. Basri Savitha & Subrato Banerjee & Ankitha Shetty, 2019. "Product diversification versus technical efficiency of conglomerate life microinsurance companies: evidence from India," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 44(3), pages 527-547, July.
    4. Shoaib Alam Siddiqui & Ali Shaddady, 2023. "How Profit Efficient is Indian Life Insurance Industry: A DEA Study," SAGE Open, , vol. 13(4), pages 21582440231, December.

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