Evaluating the Efficiency and Productivity of Insurance Companies with a Malmquist Index: A Case Study for Portugal

Abstract

This paper estimates changes in total productivity, breaking this down into technically efficient change and technological change by means of data envelopment analysis applied to a representative sample of insurance companies operating in the Portuguese market. The aim of this procedure is to seek out those best practices that will lead to improved performance in the market. We rank the companies according to their change in total productivity for the period 1995-2001, concluding that some companies experienced productivity growth while others experienced a decrease in productivity. The implications arising from the study are considered in terms of managerial policy.

Single Market effects on productivity in the German insurance industry

“…We clearly reproduce the result by Hussels and Ward (2006) that technical change dominates other components of total factor productivity changes. Our estimate for growth in total factor productivity is above values previously presented for Austria (+10% from 1992 to 1999) by Mahlberg and Url (2003), for Italy (À25% from 1985 to 1993) by Cummins et al (1996), for Portugal (+11% from 1995 to 2001) by Barros et al (2005), and for Spain (+9% from 1989 to1998) by Cummins and Rubio-Misas (2006). The higher value for Germany is mainly due to favorable productivity growth at the end of our sample period not covered by earlier studies.…”

“…Our definition of inputs, outputs, and prices matches closely those used in other papers on the European insurance market (see Barros et al, 2005, for a survey). All inputs and outputs are measured in millions of Euro and net of reinsurance activities.…”

What Drives the Technical Inefficiency in the Tunisian Insurance Industry

“…1 The length of the window is 3 years. 2 For each window, we should get p different TE scores, since each single DMU related window successive observation is considered as if the DMUs are different. 3 There is a controversy in the empirical literature on whether the output produced by the insurance companies should better be measured by premiums or claims.…”

Efficiency concept and investigations in insurance industry: A survey

“…These scores are belong [0, 1], the efficient decision making unit are placed at the frontier and their scores is equal to 1. Several research works have used this method to investigate efficiency in the insurance industry (Cummins et al, 1996;Brockett et al, 1998;Carr et al, 1999;Barros et al, 2005;Yao et al, 2007). Deprins et al (1984) are the pioneers of this nonparametric method.…”