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

Bawa, Sumninder Kaur; Ruchita, Ruchita

doi:10.5251/ajsms.2011.2.2.237.247

Cited by 8 publications

(14 citation statements)

References 23 publications

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“…This has been used widely to assess the efficiency levels as both approaches allow the use of multiple inputs and outputs from a sample of institutions to develop an efficiency frontier and evaluate the efficiency of a Decision Making Units (DMUs) relative to other DMUs in the sample. There are many studies have been done to measure the performance of insurance companies using DEA ( [10]; [13]; [14]; [15] and [16]). Therefore, this study attempts to evaluate the performance of the local insurance companies in Malaysia for the year of 2014 and 2015 by using Data Envelopment Analysis (DEA) that has been widely used to compare performance across the individual firm.…”

Section: Introductionmentioning

confidence: 99%

Performance of Malaysian Insurance Companies Using Data Envelopment Analysis

Bao¹,

Ramlan²,

Mohamad³

et al. 2018

IJEECS

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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.

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Section: Introductionmentioning

confidence: 99%

Performance of Malaysian Insurance Companies Using Data Envelopment Analysis

Bao¹,

Ramlan²,

Mohamad³

et al. 2018

IJEECS

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“…If scale efficiency is less than 1, then the firm is scale inefficient. We have found average scale efficiency of 66.73% for the Indian health insurance sector as against of 78% scale efficiency found by Bawa and Ruchita (2011) for the 10 Indian general insurers' health business. Percentage of the health insurers that were found scale efficient in the years 2014-2015, 2015-2016, 2016-2017, 2017-2018, and 2018-2019 As Z < p value (see Table 8), so we can conclude that stand-alone health insurers and health insurance business of general insurers are not on the same efficiency frontiers.…”

Section: Resultsmentioning

confidence: 62%

“…Studies investigated the efficiency of the Indian general and life insurance companies using DEA for various periods. Bawa and Ruchita (2011) assessed the efficiency of health insurance business of 10 general insurers for the period 2003-2010 using radial model of DEA. They found that companies operated at average efficiency of 73% during the period.…”

Section: Literature Reviewmentioning

confidence: 99%

How efficient is Indian health insurance sector: An SBM‐DEA study

Siddiqui

2021

Manage Decis Econ

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The aims of this study are to investigate the technical efficiency and productivity growth of the Indian health insurance sector and to test the conglomeration hypothesis versus the strategic focus hypothesis for providing new evidence on economies of scope. This study has analyzed the efficiency and productivity performance of the 27 health insurance companies from the period 2015 to 2019 using slack‐based measurers (SBM) of data envelopment analysis. The Malmquist index has been used to evaluate the productivity of health insurers. The Mann–Whitney test is used to investigate the conglomeration hypothesis versus the strategic focus hypothesis. Findings indicate that Indian health insurance industry experienced significant fluctuations in mean technical efficiency during the study period. Almost 30% of the health insurers operated efficiently during the study period. Almost half of the health insurers experienced growth during this period. The Indian health insurance sector grew at an annual average rate of 3.78% during our study period. We further found that the stand‐alone health insurers operated more efficiently than the health insurance units of the general insurers in the Indian health insurance sector. This study is first of its kind that brings into light the operating characteristics, efficiencies, and productivity of the Indian health insurance sector. This study will be helpful to the regulators, decision makers, and other stakeholders. The policy makers of health insurance companies can improve their efficiency after knowing the reasons of inefficiency. The managers of inefficient health insurers may expedite measures to improve efficiency by better utilization of existing resources and technological improvements.

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“…The DEA method was also used by [56][57][58][59][60][61][62][63][64][65][66][67] and many others. The DEA model is often applied in calculating the efficiency of medical facilities [68][69][70][71].…”

Section: Literature Reviewmentioning

confidence: 99%

Comparison of the Results of a Data Envelopment Analysis Model and Logit Model in Assessing Business Financial Health

Horváthová

Mokrišová

2020

Information

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This paper focuses on business financial health evaluation with the use of selected mathematical and statistical methods. The issue of financial health assessment and prediction of business failure is a widely discussed topic across various industries in Slovakia and abroad. The aim of this paper was to formulate a data envelopment analysis (DEA) model and to verify the estimation accuracy of this model in comparison with the logit model. The research was carried out on a sample of companies operating in the field of heat supply in Slovakia. For this sample of businesses, we selected appropriate financial indicators as determinants of bankruptcy. The indicators were selected using related empirical studies, a univariate logit model, and a correlation matrix. In this paper, we applied two main models: the BCC DEA model, processed in DEAFrontier software; and the logit model, processed in Statistica software. We compared the estimation accuracy of the constructed models using error type I and error type II. The main conclusion of the paper is that the DEA method is a suitable alternative in assessing the financial health of businesses from the analyzed sample. In contrast to the logit model, the results of this method are independent of any assumptions.

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

Cited by 8 publications

References 23 publications

Performance of Malaysian Insurance Companies Using Data Envelopment Analysis

Performance of Malaysian Insurance Companies Using Data Envelopment Analysis

How efficient is Indian health insurance sector: An SBM‐DEA study

Comparison of the Results of a Data Envelopment Analysis Model and Logit Model in Assessing Business Financial Health

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