Efficiency Measure of Insurance v/s Takaful Firms Using DEA Approach : A Case of Pakistan

Khan, Aftab; Noreen, Uzma

doi:10.12816/0004133

Cited by 24 publications

(25 citation statements)

References 25 publications

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“…Although, there are some papers which investigated efficiency of insurers in Pakistan such as; Afza and Asghar (2010), Afza and Jam-e-Kausar (2010) and Afza and Asghar (2012). There is little evidence which compared efficiency of conventional insurers with Takaful firms such as; Khan and Noreen (2014) and Janjua and Akmal (2015). However, all of these studies only applied nonparametric (DEA) approach to compute their efficiency scores.…”

Section: Literature Reviewmentioning

confidence: 99%

Takaful, Insurer type and Efficiency: An Application of Parametric Approach

Asghar

Khan

2018

GRR

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This study is conducted in two steps. Firstly, Stochastic Frontier Approach (SFA) is applied to estimate efficiency of the Takaful and conventional insurance firms in Pakistan from 2005 to 2010. It is found that life insurers are performing poor in comparison to general insurers. In addition, Takaful firms are found less cost efficient in comparison to conventional insurance firms. Secondly, the Tobit results imply that the size, investment and claim are found negatively related with the efficiency of insurance companies which suggests that larger size raise the cost of doing business whereas, due to financial crises the investment of large firms are also dropped. Moreover, improvement in minimum capital requirement is found fruit full both for cost and profit efficiencies. Therefore, it is suggested that the regulators should keep continue this policy to further improve financial health of the insurance industry.

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Section: Literature Reviewmentioning

confidence: 99%

Takaful, Insurer type and Efficiency: An Application of Parametric Approach

Asghar

Khan

2018

GRR

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“…So it is with private asurasni companies that proved efficient in the first four years. Khan and Noreen (2014) compare the level of conventional insurance efficiency with sharia insurance with case studies in Pakistan. The results showed that sharia insurance is more efficient because the company can use its input optimally.…”

Section: Figure 1 the Development Of Amount Of Sharia Insurance In Inmentioning

confidence: 99%

“…And the last in sharia unit unit of life insurance from 12 companies that made the research sample there are 4 companies that able mencpai efficient level optimally or as 255 companies that efficiently optimally in managing the risk of the participants insurance. Khan and Noreen (2014) compare the level of efesiensi Conventional insurance with sharia insurance with case studies in Pakistan. The results showed that sharia insurance is more efficient because the company can use its input optimally.…”

Section: Figure 1 the Development Of Amount Of Sharia Insurance In Inmentioning

confidence: 99%

Measuring Efficiency of Life Insurance Instution in Indonesia: Data Envelopment Analysis Approach

Rusydiana¹,

Nugroho²

2017

GReviewIEB

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This study aims to measure the level of efficiency of the life insurance industry in Indonesia. The calculation of the efficiency level in this study is relative, not absolute. The approach used is Data Envelopment Analysis (DEA). There are 8 research objects: Prudential, BNI Life, PaninDai-IchiLife, Asuransi Jiwasraya and Life Insurance Adisaranan Wanaartha, Takaful Takaful Insurance, Amanahjiwa Giri sharia insurance and Al-Amin sharia life insurance. This study consists of three input variables (cost of Commissive (X1), Operational Cost (X2), Total Equity (X3) and 2 output variables (Premium) (Y1) and Investment Revenue (Y2)). The results explain that there are 15 perfectly efficient DMUs (100%). And an inefficient of 24 DMU, consisting of 7 DMU conditions IRS and 17 DMU with DRS conditions. Of all the DMU observed, Prudential insurance is a life insurance company that is able to maintain its gradual efficiency level from 2013 to 2016 when compared to other life insurance in this observation. In general, the main factor inefficiency of life insurance industry in Indonesia (in observation) from 2012 to 2016 is from the output side. To be more efficient then life insurance companies should increase the value of premiums by 91% and investment income of 8%.

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“…Shafique (2015) mentions that the director's skills and experience can provide positive results for the company by allocating optimal resources. Based on research conducted by Saad (2011), Khan (2014), Tufahati & Suprapto (2016), Benarda (2016) and Sabiti (2017), shows that Islamic insurance companies in some regions have not been able to achieve efficiency in various periods, while the measurement tool used to determine the level of efficiency is Data Envelopment Analysis (DEA).…”

Section: Introductionmentioning

confidence: 99%

“…The purpose of this approach is to measure the relative efficiency of each DMU (Decision Making Unit) with best practice companies, the main advantage of this approach is lower demand of data so the sample size is smaller (Khan, 2014 given the very tight competition between institutions. One of them is by measuring the level of financial efficiency of Islamic Insurance companies because of its significant growth but still unable to compete with the banking industry.…”

Section: Introductionmentioning

confidence: 99%

Efficiency of Tabarru’ Fund Management at Islamic insurance Companies in Indonesia

Sarah¹,

Mahri²,

Cakhyaneu³

2019

KSS

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The growth of Islamic insurance has been quite rapid in recent years, but in 2013 the performance was less than optimal. There are only six life insurance that have received surplus and seven general insurance that still deficit. One of many causes of the lack of optimal performance is inefficiency, while that is related to how to obtain the maximum level of output with a certain amount of input. This study aims to determine level of efficiency in Islamic insurance for the period 2012-2016 and find out the causes. This study uses secondary data from 13 companies. Research method used is descriptive with Data Envelopment Analysis (DEA). The input variables used assets, operating expenses and claim payments. Furthermore, output variables used contributions, investment income and tabarru' funds. Based the results of research conducted is known that, the condition of Islamic insurance in Indonesia hasn't been efficient. There were 12 companies that experienced inefficiencies due to the high operational costs and the low contribution.

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Efficiency Measure of Insurance v/s Takaful Firms Using DEA Approach : A Case of Pakistan

Cited by 24 publications

References 25 publications

Takaful, Insurer type and Efficiency: An Application of Parametric Approach

Takaful, Insurer type and Efficiency: An Application of Parametric Approach

Measuring Efficiency of Life Insurance Instution in Indonesia: Data Envelopment Analysis Approach

Efficiency of Tabarru’ Fund Management at Islamic insurance Companies in Indonesia

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