Competition and Its Variation Over Time: An Empirical Analysis of the Chinese Insurance Industry

Jeng, Vivian

doi:10.1057/gpp.2015.4

Cited by 14 publications

(18 citation statements)

References 18 publications

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“…After the implementation of RBCT, the competitiveness in FTO has been increased, its H-statistic reports a value of 0.138, this result is statistically significant different from 0 and 1, thus it is in monopolistic competitive structure. The results are consistent with the findings by Jeng (2015) and Alhassan and Biekpe (2016) that conclude that the competition among the insurers are moving towards more competitive. The results further support the recommendation by Todorov (2016) that proposes that intervention by the regulators is needed to enhance the competition among insurers.…”

Section: Competitivenesssupporting

confidence: 91%

“…Thus, these studies propose that, the study on competition is needed to comprehend the analysis on efficiency and productivity. Recently, Jeng (2015) analyses the competition variation in the Chinese insurance industry, Alhassan and Biekpe (2016) examines the competition and efficiency in the nonlife insurance market in South Africa and Todorov (2016) accesses the competition in Bulgarian Insurance industry. Jeng (2015) concludes that although there is a declining trend in the insurance industry concentration, the behaviour of the insurance firms does not exclude the hypothesis of monopoly or collusive oligopoly behaviour.…”

Section: Competitivenessmentioning

confidence: 99%

“…Recently, Jeng (2015) analyses the competition variation in the Chinese insurance industry, Alhassan and Biekpe (2016) examines the competition and efficiency in the nonlife insurance market in South Africa and Todorov (2016) accesses the competition in Bulgarian Insurance industry. Jeng (2015) concludes that although there is a declining trend in the insurance industry concentration, the behaviour of the insurance firms does not exclude the hypothesis of monopoly or collusive oligopoly behaviour. Hence, the authorities need to face the reality that the inability of local and foreign firms to compete equally will affect the local market and jeopardise customers' welfare in the long run.…”

Section: Competitivenessmentioning

confidence: 99%

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Impacts of Risk Based Capital Regulation in Malaysian Islamic Insurers (Takaful)

Lee¹,

Cheng²,

Nassir³

et al. 2019

AAMJAF

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Risk Based Capital framework for Takaful operators (RBCT) is enforced by the Central Bank of Malaysia with the aim to ensure that Takaful operators have adequate capital to provide sound financial service. The objectives of this article is to examine the impacts of RBCT on efficiency, productivity and competitiveness level of Family Takaful Operators (FTO) and the relationship between efficiency and competitiveness in FTO in Malaysia. This study employs three methods namely Data Envelopment Analysis (DEA), Malmquist Productivity Index (MPI) and Panzar Rosse (PR) to investigate the impacts of RBC on the efficiency, productivity and competitiveness of FTO in Malaysia. The efficiency results indicate that after RBCT comes into effect, the cost efficiency has achieved higher efficient level. Although the productivity efficiency are improving, the technological systems of FTO are yet to achieve a reasonable level. From competitiveness results, the FTO are less competitive prior the implementation of RBCT, but has become more competitive after the regulation of RBCT framework. Furthermore, the more efficient of a Takaful market, the more competitive the market is. The implication of this study is that regulators need to impose prudent risk based capital regulation because it will improve the efficiency and competitiveness of Islamic insurers.

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Section: Competitivenesssupporting

confidence: 91%

Section: Competitivenessmentioning

confidence: 99%

Section: Competitivenessmentioning

confidence: 99%

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Impacts of Risk Based Capital Regulation in Malaysian Islamic Insurers (Takaful)

Lee¹,

Cheng²,

Nassir³

et al. 2019

AAMJAF

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“…They find a support that Takaful operators with foreign ownership positively impact the revenues because the support for those firms from parents is substantial in terms of financial resources, skills, and risk management techniques. Some argue that foreign operators might face difficulties in complying with local rules and regulations, the existence of the complexity of management, cost of synchronisation and cultural differences between local and the foreign markets, which all are expected to reduce the efficiency of operators (Biener et al, 2016;Jeng, 2015).…”

Section: Hypotheses Developmentmentioning

confidence: 99%

Ownership type, business model, market structure, and the performance of Takaful and conventional insurance companies in Malaysia

Razak

Shawtari

Elsalem

2021

Cogent Economics & Finance

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The paper evaluates the performance of the Takaful and insurance companies in Malaysia. It examines the impact of ownership, business model, and market structure on conventional and Takaful companies' performance. The interfirm comparisons provide information about the performance and competitiveness of firms operating under different modes of business. The study adopts the unbalanced panel data approach with Panel Corrected Standard Error (PCSE) regression to analyse the data of 44 Malaysian Takaful and insurance companies with 255 firm observations over the period from 2011 to 2016. The study's findings show that Takaful and insurance companies perform at par in terms of their premiums. However, Takaful has better investment income. Foreign-owned firms perform better than local firms. The efficient market hypothesis is more powerful than the structural conduct hypothesis in explaining the firms' performance. The study's implications are expected to help improve and develop the Takaful and insurance sector as an efficient industry in-line with regulation changes. To the ABOUT THE AUTHOR Shaikh Hamzah Abdul Razak is a retired professor of Takaful. Previously, he served as associate professor at the International Centre for Education in Islamic finance (INCEIF) Prior to joining INCEIF, Dr Shaikh was with Malayan Banking Berhad since 1974 and held several posts in various departments. His research interest includes among other Islamic finance in general, Takaful and wealth management in particular. Fekri Ali Shawtari is an assistant professor at Community College of Qatar. Dr Fekri earned his PhD in Islamic finance from the International Centre for education in Islamic Finance (INCEIF), Malaysia. His reseasrch interests include Islamic banking and finance, risk management, efficiency, earnings management. Teaching Assistant of Accounting at Qatar University. He is undertaking PhD at The University of Sheffield in the UK. He has extensive teaching experience in accounting modules. His research interests focus on IFRS, accounting quality and earnings management, ce, whistleblowing.

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“…They also face additional challenges from inadequate regulation (and inadequate enforcement of regulation. The insurance industry shall be moving from monopoly to monopolistic competition to ensure the public welfare, but not under conditions of perfect market competition involving price wars that could place the insurers in an inferior position (Jeng, 2015). Therefore, it is also important to investigate the market structure of Takaful insurance in Malaysia to ensure the healthy growth of Takaful business.…”

Section: Introductionmentioning

confidence: 99%

Does Efficiency Promote Competitiveness of the Insurance Industry?

Lee

Cheng

Nassir

et al. 2018

Journal of Business Economics and Management

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This paper contributes to the existing literature by examining the efficiency and competitiveness of the Takaful insurance. We employ the Data Envelopment Analysis (DEA) to compute the efficiency of Takaful operators, while Panzar-Rosse (P-R) H-statistic method is used to evaluate the degree of competition. The findings indicate that the inefficiency in Takaful’s operations is affected by the scale of operations but not by inefficiency in managerial practice. Actuaries need to pay attention to estimating provisions for outstanding claims, as this factor is negatively influencing the efficiency of Takaful insurance. Additionally, the managers are cautioned not to overspend on commissions paid to the agents because this will reduce the profit of the Takaful operators. The findings to a very large extent indicate that improvement in efficiency will increase the entry of a more viable competitor to participate in the Takaful industry. The regulators need to implement prudent monitoring of the operations of Takaful insurers because improvements in efficiency will make Takaful operators more competitive. The implications further shed light on the motivation for insurance firms to improve efficiency that enable them to charge lower price to enhance competition which may benefit both the firms and customers.

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Competition and Its Variation Over Time: An Empirical Analysis of the Chinese Insurance Industry

Cited by 14 publications

References 18 publications

Impacts of Risk Based Capital Regulation in Malaysian Islamic Insurers (Takaful)

Impacts of Risk Based Capital Regulation in Malaysian Islamic Insurers (Takaful)

Ownership type, business model, market structure, and the performance of Takaful and conventional insurance companies in Malaysia

Does Efficiency Promote Competitiveness of the Insurance Industry?

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