How efficient is Indian health insurance sector: An SBM‐DEA study

Abstract

The aims of this study are to investigate the technical efficiency and productivity growth of the Indian health insurance sector and to test the conglomeration hypothesis versus the strategic focus hypothesis for providing new evidence on economies of scope. This study has analyzed the efficiency and productivity performance of the 27 health insurance companies from the period 2015 to 2019 using slack‐based measurers (SBM) of data envelopment analysis. The Malmquist index has been used to evaluate the productivity of health insurers. The Mann–Whitney test is used to investigate the conglomeration hypothesis versus the strategic focus hypothesis. Findings indicate that Indian health insurance industry experienced significant fluctuations in mean technical efficiency during the study period. Almost 30% of the health insurers operated efficiently during the study period. Almost half of the health insurers experienced growth during this period. The Indian health insurance sector grew at an annual average rate of 3.78% during our study period. We further found that the stand‐alone health insurers operated more efficiently than the health insurance units of the general insurers in the Indian health insurance sector. This study is first of its kind that brings into light the operating characteristics, efficiencies, and productivity of the Indian health insurance sector. This study will be helpful to the regulators, decision makers, and other stakeholders. The policy makers of health insurance companies can improve their efficiency after knowing the reasons of inefficiency. The managers of inefficient health insurers may expedite measures to improve efficiency by better utilization of existing resources and technological improvements.

Critical Performance Analysis of The Health Insurance Sector In India During Covid-19 Outbreak

“…The profit of health insurance companies depends on the amount of premium income received [4]. There are four key metrics to measure the performance of health insurance sector such as gross premium income, incurred claim ratio, number of policies and claim paid [4], [11], [12], [13].…”

“…(IRDA) guidelines and directions [9]. In response to the pandemic, insurance providers added a COVID-19specific health insurance plan to their customers' like "Arogya Sanjeevani," a comprehensive standard health insurance plans [14], [9], [5]. The prolonged lockdown that followed COVID-19 has compelled insurance companies to prioritise the use of digital technology for everything from selling new policies to settling policy claims [8].…”

“…There have been more claims in the health insurance sector, which has decreased cash flow, but there have also been more new insurance customers, which indicates company growth [4]. According to [5] a critical turning point in the insurance industry happened in 2020. Health insurance companies have evaluated their customers' needs and operating procedures in the wake of the COVID-19 outbreak.…”

“…People were forced to buy online health insurance due to the severity of the COVID-19 pandemic and the stringent lockdowns [4]. The presence of various private companies, rising household income, improved awareness of health insurance, all contributed to the health insurance growth [5].…”

Kuzey Kıbrıs’ta hayat dışı sigorta şirketlerinin etkinliğinin veri zarflama analizi ile ölçülmesi

“…Naldöken ve Kaya (2020), Türkiye'de sağlık sigortacılığı alanında faaliyet gösteren 20 sigorta şirketinin 2016, 2017 ve 2018 yıllarındaki etkinliğini incelemiştir. Gülay ve Attila (2021) tarafından yapılan çalışmada, Türkiye'de faaliyet gösteren 31 sigorta şirketinin 2017, 2018 ve 2019 yıllarında hastalık/sağlık branşındaki etkinlikleri analiz edilmiştir Siddiqui (2022). ise, veri zarflama analizinin aylak temelli ölçüm araçlarını (SBM) kullanarak 2015-2019 döneminde Hindistan'da 27 sağlık sigortası şirketinin etkinliğini analiz etmiştir.…”