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The purpose of this paper is to provide an overview on frontier efficiency measurement in the insurance industry, a topic of great interest in the academic literature during the last several years. We provide a comprehensive survey of 95 studies with a special emphasis on innovations and recent developments. We review different econometric and mathematical programming approaches to efficiency measurement in insurance and discuss the choice of input and output factors. Furthermore, we categorise the 95 studies into 10 different areas of application and discuss selected results. While there is a broad consensus with regard to the choice of methodology and input factors, our review reveals large differences in output measurement. Significant need for future research can be identified, for example, with regard to analysis of organisational forms, market structure and risk management, especially in the international context.

This paper provides a comprehensive analysis of efficiency and productivity in the German property-liability insurance industry, a market that has experienced significant change in recent years. Using data envelopment analysis (DEA) and covering the period 1995-2006, we find that there is potential for the market to improve by about 20 percentage points in terms of technical efficiency and about 50 percentage points in terms of cost efficiency. Furthermore, the analysis shows moderate total factor productivity growth and low efficiency growth during the sample period. A major contribution of the paper is its analysis of six efficiency determinants -firm size, distribution channels, ownership forms, product specialisation, financial leverage and premium growth -using a truncated regression and bootstrapping approach to avoid invalid inference.

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This paper analyzes price competition in the German motor insurance market since 1994 and looks for evidence to back up a claim frequently found in the trade literature-that there have been two recent price wars in this industry, the first in 1996-1999, the second in 2005-2006. In a first step, we analyze the development of the German motor insurance market and compare it to that of other property-liability lines of business. In a second step the applicability of price war definitions found in the marketing literature to the German motor insurance market is checked. In a third step, a comparison to reference cases from other industries, where price wars have been subject to academic analysis, is conducted to complement the analysis. We conclude that, contrary to reports in the trade literature, the periods of 1996-1999 and 2005-2006 should be considered as times of intense competition in the motor insurance industry, not as times of price war.Zusammenfassung In dieser Arbeit untersuchen wir den Preiswettbewerb im deutschen Kraftfahrzeugversicherungsmarkt seit der Deregulierung der Versicherungsmärkte im Jahr 1994. Im Zentrum der Analyse steht die häufig in der Fachpresse zu findende Aussage, dass in diesem Versicherungszweig zwei Preiskriege stattgefunden haben: Der erste von 1996 bis 1999 und der zweite von 2005 bis 2006. Im ersten Schritt untersuchen wir die Entwicklung des deutschen Kraftfahrzeugversicherungsmarkts im Vergleich zu anderen Zweigen der Schadenversicherung. Im zweiten Schritt prüfen wir gängige Preiskrieg-Definitionen aus der Marketing-Literatur hinsichtlich ihre Anwendbarkeit auf den deutschen Kraftfahrzeugversicherungsmarkt. M. Eling (u) · M. Luhnen 1 3 38 M. Eling, M. LuhnenSchließlich nehmen wir einen Vergleich mit Preiskriegen aus anderen Industrien vor. Im Gegensatz zur Fachpresse kommen wir zu der Schlussfolgerung, dass die zwei Zeiträume nicht als Phasen des Preiskrieges, sondern eher als Phasen intensiven Wettbewerbs zu interpretieren sind.