Performance Benchmarking in Financial Services: Evidence from the UK Life Insurance Industry

Klumpes, Paul J. M.

doi:10.1086/381281

Cited by 61 publications

(37 citation statements)

References 5 publications

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“…Logarithm of equity/invested assets has a negative influence on efficiency. Klumpes (2004) assessed the efficiency of 40 insurance companies in the UK that sold life insurance or pensions. They assessed the difference in efficiency of insurance companies based on their size.…”

Section: Literature Reviewmentioning

confidence: 99%

Efficiency of insurance companies: Application of DEA and Tobit analyses

Grmanová¹,

Strunz²

2017

Journal of International Studies

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Abstract. The aim of this paper is to determine the relationship between technical efficiency and profitability of insurance companies. The profitability of insurance companies was expressed by such indicators as ROA, ROE and the size of assets. We analysed 15 commercial insurance companies in Slovakia in the period of 2013-2015. Technical efficiency scores were expressed using DEA models. The relationship between the technical efficiency score and the indicators of profitability was expressed using censored regression, i.e. the Tobit regression model and the Mann-Whitney U-test. The relationship between the technical efficiency score in the CCR and BCC models and all the groups formed on the basis of the return on assets and the group formed basing on the return on equity was not confirmed. Statistically significant difference between average technical efficiency score in the CCR model in the group of insurance companies with ROA <1%,2%) and technical efficiency score in the CCR model in the group of insurance companies with ROA equal or higher than 2 was confirmed. Insurance companies with ROA equal or higher than 2 achieved greater average efficiency score in the CCR model than the group of insurance companies with ROA <1%,2%).

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Section: Literature Reviewmentioning

confidence: 99%

Efficiency of insurance companies: Application of DEA and Tobit analyses

Grmanová¹,

Strunz²

2017

Journal of International Studies

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“…Several studies show that direct distribution systems (employed agent or company representatives) are less efficient than independent agent distribution systems (Brockett et al, 1998(Brockett et al, , 2004Klumpes , 2004). In another study, conducted by , the direct distribution systems are more cost efficient, however the two distribution systems are equally efficient while taking account of profit.…”

Section: Agent Distribution Systemsmentioning

confidence: 98%

“…The alternative profit function differs from standard profit function in using variable output quantities than variable output prices. Several research works investigate profit efficiency in insurance industry Ward, 2002;Klumpes, 2004;Yuan & Phillips, 2008).…”

Section: Alternative Profit Efficiencymentioning

confidence: 99%

Efficiency concept and investigations in insurance industry: A survey

Jarraya¹,

Bouri²

2013

msl

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Most recent studies are based on benchmarking analysis allowing the measure of company efficiency relatively to a reference performance. Benchmarking is a helpful tool to analyze and promote efficiency in insurance companies. The fast development of X-efficiency notion makes traditional performance measures (ROA, ROE, etc.) obsolete. Indeed, various methods have been used, various input-output measures have been proposed and various research fields have been explored in insurance company investigation. So, after reviewing most known efficiency concepts and their definitions, this section explores the literature review of two principal points of discussion: the first point is focused on the different used techniques to measure efficiency, including the developed approaches to define inputs, outputs and their prices. The second point represents an overview of efficiency investigations in insurance industry.

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“…9 Insurance policies were distributed through the independent agencies (brokerage firms) and direct underwriting systems. In Taiwan's automobile 2 Joskow (1973); Cummins (1977); Cummins and VanDerhei (1979); Mayers and Smith (1981) ;Marvel (1982); Sass and Gisser (1989); Barrese and Nelson (1992); Blair and Herndon (1994); Kim et al (1996); Regan and Tennyson (1996);Regan (1997); Berger et al (1997); Regan and Tzeng (1999); Klumpes (2004); Klumpes and Schuermann (2011). 3 Posey and Yavas (1995); Kim et al (1996); Berger et al (1997); Posey and Tennyson (1998);Seog (1999); Venezia et al (1999);Trigo-Gamarra (2008).…”

Section: Introductionmentioning

confidence: 99%

Insurance Marketing Channel as a Screening Mechanism: Empirical Evidences from Taiwan Automobile Insurance Market

Hsieh

Liu

Tzeng

2013

Geneva Pap Risk Insur Issues Pract

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Venezia, Galai and Shapira in 1999 proposed a theoretical framework that considers asymmetric information to explain the co-existence of the independent agent and direct underwriting systems in the insurance market. In separating equilibrium, high-risk clients tend to purchase insurance through independent agents, whereas low-risk clients prefer dealing directly with underwriters. Using a unique data set from Taiwan's automobile liability insurance, this paper tests the screening mechanism hypothesis proposed by Venezia, Galai and Shapira. The results reveal that a positive channel-claim correlation exists in the subsamples of cars aged more than three years. Significant positive channel-claim correlation indicates that high-risk policyholders prefer to purchase insurance from an independent agent, whereas those with lower risks tend to buy insurance from direct writer channels. The results support the screening mechanism hypothesis and demonstrate that marketing channel choice could serve as a screening mechanism in an insurance market characterised by asymmetric information.

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Performance Benchmarking in Financial Services: Evidence from the UK Life Insurance Industry

Cited by 61 publications

References 5 publications

Efficiency of insurance companies: Application of DEA and Tobit analyses

Efficiency of insurance companies: Application of DEA and Tobit analyses

Efficiency concept and investigations in insurance industry: A survey

Insurance Marketing Channel as a Screening Mechanism: Empirical Evidences from Taiwan Automobile Insurance Market

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