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An empirical study of cost efficiency in the Irish life insurance industry

Author

Listed:
  • Tienyu Hwang
  • Simon S. Gao

Abstract

Contemporary studies of cost efficiency in the insurance industry have predominantly focused on large economies. This paper investigates scale economies and cost efficiency in the Irish life insurance industry by using the translog cost function and distribution-free method. Increasing returns to scale are found in the industry but the magnitude of cost economies varies with firm size. This study indicates that firms with larger market shares are more likely to exhibit cost efficiency. Furthermore, this study shows that bancassurance firms are more cost efficient than other types of insurers in the Irish life insurance industry, which provides new insights into the cost efficiency of bancassurance.

Suggested Citation

  • Tienyu Hwang & Simon S. Gao, 2005. "An empirical study of cost efficiency in the Irish life insurance industry," International Journal of Accounting, Auditing and Performance Evaluation, Inderscience Enterprises Ltd, vol. 2(3), pages 264-280.
    • Handle: RePEc:ids:ijaape:v:2:y:2005:i:3:p:264-280
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    Citations

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    Cited by:

    1. Jarraya, Bilel & Bouri, Abdelfettah, 2012. "Efficiency concept and investigations in insurance industry: A survey," MPRA Paper 53544, University Library of Munich, Germany, revised 2013.
    2. Udo Klotzki & Nadine Gatzert & Bjoern Muenstermann, 2017. "The Cost of Life Distribution in Europe," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 42(2), pages 296-322, April.
    3. Shuji Yao & Zhongwei Han & Dan Luo, 2010. "Performance of the Chinese Insurance Industry under Economic Reforms," Books, Edward Elgar Publishing, number 12788.
    4. Biener, Christian & Eling, Martin & Wirfs, Jan Hendrik, 2016. "The determinants of efficiency and productivity in the Swiss insurance industry," European Journal of Operational Research, Elsevier, vol. 248(2), pages 703-714.

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