An analysis of efficiency in the delivery of financial services: The case of life insurance agencies

Fields, Joseph A.; Murphy, Neil B.

doi:10.1007/bf00114412

Cited by 33 publications

(11 citation statements)

References 21 publications

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“…However, Houston and Simon(1970)thinks premium to insurers is what income to manufacturers, and therefore can be regarded as the indicator of output. Similar arguments appeared in: Praetz(1980); Fields and Murphy(1989); Grace and Timme (1992); Gardner and Grace (1993);Rai (1996);Diacon (2001);and Li (2005). They consider premium as an appropriate indicator of output, assuming the product is homogeneous and competitive pressures compel all insurers to charge the same price.…”

Section: Amount Of Labor (X2)supporting

confidence: 66%

Efficiencies of health insurance business in India: An application of DEA

Bawa¹,

Ruchita²

2011

AJSMS

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In order to measure the efficiency, number of methods have been developed and applied. Out of these the principal methods used are: Data Envelopment Analysis (DEA) and Stochastic Frontier. DEA is a non parametric mathematical programming approach for the measurement of efficiencies and inefficiencies. This paper seeks to use DEA to evaluate the efficiencies of health insurance business of general insurance companies in India. The present study is focused upon 10 general insurance companies of India including 4 public sector companies and cover a period of 8 years from 2002-03 to 2009-10. The study uses the equity capital and labour (including commission, agents' fees, referral and other expenditure) as input and net premium as output. It was observed that overall general insurers carrying health insurance business at an average technical efficiency of 73%, pure technical efficiency of 92% and scale efficiency of 78%. On the other hand sector wise performance analysis has indicated that technical efficiency of all the private sector companies is 77%, which is 10% more than that of public sector Companies. This can be attributable to the fact that private sector companies are operating on increasing return to scale and taking the advantages of pure technical efficiency and scale efficiency.

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Section: Amount Of Labor (X2)supporting

confidence: 66%

Efficiencies of health insurance business in India: An application of DEA

Bawa¹,

Ruchita²

2011

AJSMS

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“…Evidence to date is mixed. In a sample of Canadian insurers, Bernstein (1992) found that significant savings occurred when producing multiple products, while Fields (1988) and Fields and Murphy (1989) found nothing to suggest that scope economies existed in the US industry. Alternatively, in a study of the US life insurance industry, Meador et al (2000, p. 189) concluded, 'these results provide evidence that life insurers offering a diversified product mix have achieved greater average X-efficiency than focused [life insurers]'.…”

Section: Specification Of Variablesmentioning

confidence: 91%

Cost Efficiency in Australian General Insurers: A Non-Parametric Approach

Worthington

Hurley²

2002

The British Accounting Review

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Data envelopment analysis is used to calculate pure technical, scale, allocative and cost efficiency indices for a sample of forty-six Australian general insurers. The inputs used are labour, physical capital (in the form of both information technology and plant and equipment), and financial capital. The outputs are net premium revenues for housingrelated, transport-related, indemnity-related, mortgage-related, and other insurance, along with invested assets. The results indicate that the major source of overall cost inefficiency would appear to be allocative inefficiency rather than technical inefficiency and that the largest 20% of insurers are significantly more efficient than the remaining firms. A second-stage analysis uses limited dependent variable regression techniques to relate efficiency scores to firm-specific information. Cost efficiency appears to be closely related to asset size but not to stock exchange listing or product diversification or specialization.

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“…It was initially developed to compare the technical efficiency of public sector and not-for-profit production units (Charnes, Cooper et al, 1978), but, more recently, it has been applied successfully to the financial sector (Fields and Murphy, 1989;Ferrier and Lovell, 1990;Fields, Murphy et al, 1993;Nasser Katib and Matthews, 1999). It is therefore appropriate to the task of analysing the technical efficiency of pension subject to: In DEA, efficiency is defined as the ratio between a weighted sum of outputs and a weighted sum of inputs, where sets of weights for each of the observed production units are found by solving the following model proposed by Charnes, Cooper and Rhodes (1978), referred to as the CCR model (Boussofiane and Dyson, 1991):…”

Section: Efficiency Measurement and Datamentioning

confidence: 99%

How efficient are pension fund managers in Chile?

Barrientos

Boussofiane

2005

Rev. econ. contemp.

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The paper measures and evaluates technical efficiency among pension fund managers in Chile. Recent pension reform has established pension fund management market in nine countries in Latin America. The new pension providers compete for affiliates on the basis of fees, rates of return, and quality of service, and are subject to extensive regulation. Applying data envelopment analysis to data from Chile 1982-1999, the paper examines issues of efficiency, competition, and regulation. The analysis concludes that pension fund managers operate below the estimated "efficiency frontier", and there is no evidence of a sustained upward trend in technical efficiency over time.Key words: pension reform, pension fund managers, efficiency, competition, regulation JEL Code: H55 QUÃO EFICIENTES SÃO OS ADMINISTRADORES DE FUNDOS DE PENSÃO NO CHILE?RESUMO Este artigo se propõe a avaliar e medir a eficiência técnica dos administradores de fundos de previdência privada no Chile. A recente reforma sofrida pela previdência deu lugar a um mercado de gestão de fundos de aposentadoria em nove países da América Latina. Esses novos gestores de fundos de pensão competem por investidores através do custo de suas tarifas, dos índices de rendimento oferecidos e da qualidade do serviço prestado, estando sujeitos a uma regulamentação rigorosa. Aplicando a análise por envoltória de dados (DEA) aos dados obtidos para o Chile

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An analysis of efficiency in the delivery of financial services: The case of life insurance agencies

Cited by 33 publications

References 21 publications

Efficiencies of health insurance business in India: An application of DEA

Efficiencies of health insurance business in India: An application of DEA

Cost Efficiency in Australian General Insurers: A Non-Parametric Approach

How efficient are pension fund managers in Chile?

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