Efficiency of Life Insurance Companies: An Empirical Study in Mainland China and Taiwan

Shieh, Hwai Shuh; Hu, Jin-Li; Ang, Yong Ze

doi:10.1177/2158244020902060

Cited by 18 publications

(13 citation statements)

References 49 publications

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“…Danquah et al ( 2018 ) and Delhausse et al ( 1995 ) applied parametric techniques, stochastic frontier analysis (SFA) in particular, which provide techniques for modeling the frontier within a regression framework in order to estimate efficiency. Other authors applied non-parametric techniques, which utilize linear programing techniques to estimate the frontier and provide relative assessment (Tuzcu & Ertugay, 2020 ) such as Data Envelopment Analysis (DEA) (Barros et al, 2005 ; Cummins & Turchetti, 1996 ; Hesarzadeh, 2020 ; Nguyen & Worthington, 2020 ; Nourani et al, 2020 ; Shieh et al, 2020 ), and two-stage DEA (Li et al, 2018 ). The choice of the methodology for estimating efficient frontiers has generated debates in the literature, with some scholars supporting the parametric approach (Berger, 1993 ; Greene, 2008 ) and others the nonparametric one (Cooper et al, 2011 ), with no clear conclusion.…”

Section: Literature Reviewmentioning

confidence: 99%

Translating technological innovation into efficiency: the case of US public P&C insurance companies

Lanfranchi

Grassi

2021

Eurasian Bus Rev

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In recent years, Insurtech innovations, driven by technologies such as artificial intelligence and blockchain, emerged in the insurance industry, with the promise of improving efficiency. However, while the positive impact of technology on insurance companies’ efficiency is expected, literature assessing it empirically is scarce, when it comes to recent technological change. Focusing on the US public P&C insurance sector in the period 2012–2018 and relying on both nonparametric (two stage DEA) and parametric (SFA) approaches, it emerges that on average insurance companies were not able to leverage on technological innovations to improve their efficiency. On average a relative level of efficiency among companies, according to a two stage DEA model, was quite stable in time, while the SFA approach shows that the distance between efficient and less efficient firms slightly increased. Moreover, we found one very efficient firm, almost a leader of the market in terms of efficiency, and a homogeneous group of followers, indicating that there is vast scope for improvement for less efficient companies. Nevertheless, even the most efficient company impaired its efficiency over time, suggesting that neither the leader nor on average the followers properly leveraged technology to improve their efficiency. In a competitive scenario, with new players’ entrance and fierce competition, inertia may seriously affect their positioning. Academicians, managers and policymakers should carefully consider the effects that a non-improvement of efficiency following technological change may have on market structure, competition and regulations, potentially opening to further discussion on how technological innovations adoption should be facilitated.

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Section: Literature Reviewmentioning

confidence: 99%

Translating technological innovation into efficiency: the case of US public P&C insurance companies

Lanfranchi

Grassi

2021

Eurasian Bus Rev

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“…In the insurance sector, insurance density and insurance penetration are the two well-known development indicators that exist. Penetration rate and insurance density can be considered environmental variables for an insurance company (Shieh et al, 2020;(Copeland & Cabanda, 2018). An increase in insurance penetration may increase moral hazard and resource scarcity.…”

Section: Insurance Development Indicatorsmentioning

confidence: 99%

“…An increase in insurance penetration may increase moral hazard and resource scarcity. Studies like (Biener & Eling, 2012;Cummins et al, 2017;Shieh et al, 2020) have shown insurance density and penetration as the significant efficiency determinants of insurers. Following the results of Biener and Eling (2012), we are expecting a positive relationship for insurance density and unfavorable for insurance penetration.…”

Section: Insurance Development Indicatorsmentioning

confidence: 99%

Efficiency drivers of insurers in GCC: an analysis incorporating company-specific and external environmental variables

Bansal

Singh

2021

Cogent Economics & Finance

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The study aims to a comprehensive measure of listed insurance companies' technical efficiency in GCC countries and benchmarking, peer count summary, and measuring productivity changes in the first stage. In the second stage, the technical efficiency, pure technical efficiency, and scale efficiency scores have been regressed with internal (company variables) and external environmental variables. This paper first examines financial freedom and reinsurance activities on 60 insurers' efficiency from all GCC countries during 2016-2019. The results suggest a positive impact of economic freedom, solvency on technical efficiency components, and the negative effect of reinsurance ceding, market concentration on GCC insurers' technical efficiency. In productivity changes, UAE companies are doing well as compared to other countries' insurers. Overall, GCC insurers' efficiency is improving with pure technical efficiency having a CAGR of 2.13% and scale efficiency a CAGR of 2.96%. Based on the peer count summary, only the UAE and Saudi Arabia's companies can be benchmarked against another insurance company. Also, this research is one of the most comprehensive ones in the GCC region; this is the first study on an extensive data set to the best of our knowledge, including conventional insurers operating across GCC countries. This study is based on 60 insurers listed on the stock exchanges of six GCC countries. This will also be the first empirical evidence on the GCC insurers, which measures the impact of companyspecific variables and unique environmental variables separately on the two components of technical efficiency using Tobit regression. The positive association of competition and financial freedom with technical efficiency may encourage Rohit Bansal ABOUT THE AUTHOR Dr. Rohit Bansal holds a doctoral degree in Corporate Finance from the Indian Institute of Technology, Roorkee. He possesses a rich professional experience of over 10 years in Finance, Accounting, and Econometrics. He has published many articles & research papers in various international and refereed journals of repute Elsevier, Taylor & Francis, Springer, Sage, Emerald, and IGI Global, most of them listed in ABDC and Scopus. His research area includes corporate finance, stock markets, and financial markets. He also serves as a reviewer for select journals.

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“…Dixon et al (1990) utilized their Performance Measurement Questionnaire (PMQ) to recognize the qualities and failings in the execution. Shieh et al (2020) measured the efficiency of the life insurance companies using a four-stage Data Envelopment Analysis (DEA). It has been observed that the design of performance measures is very poorly defined in many companies creating a lot of confusion and misunderstanding.…”

Section: Literature Reviewmentioning

confidence: 99%

An Analysis of Causal Relationships Among the Factors Affecting the Performance of a Service Organization

Sharma

Kumar

2021

Sage Open

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In the present scenario, services have the largest domination in consumers’ lives and constitute a large part of the world economy. The researchers and practitioners have given limited research attention to transformative consumer research which affects consumer well-being. In this study, a causal relationship among the factors influencing the performance of an organization providing the transformative services has been analyzed using total interpretive structural modeling (TISM). The factors influencing the services have been identified through the literature review. After identifying the factors, TISM has been used to interpret the direct as well as significant transitive linkages among the factors. The empirical results suggest that top management plays a big role in consumer well-being along with the welfare of society. Devotion toward the well-being of the broader level of society depends on the top management’s commitment toward corporate social responsibility and respect for the rule of laws. These are the major factors influencing the performance of the organization other than employee satisfaction, excellent service quality, use of information technology and e-commerce, and so on.

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Efficiency of Life Insurance Companies: An Empirical Study in Mainland China and Taiwan

Cited by 18 publications

References 49 publications

Translating technological innovation into efficiency: the case of US public P&C insurance companies

Translating technological innovation into efficiency: the case of US public P&C insurance companies

Efficiency drivers of insurers in GCC: an analysis incorporating company-specific and external environmental variables

An Analysis of Causal Relationships Among the Factors Affecting the Performance of a Service Organization

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