<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>The insurance industry has an important role in the economy, being constantly focused on diversifying product portfolios and dispersing risks. Since the uncertainty, the asymmetric information, the current economic and social-political challenges affect the economic performance and competitiveness on the insurance market, it is necessary to focus on the evaluation of the technical efficiency of the players. One of the most complex analytical research tools with increased utility that can be applied to measure the efficiency is the Data Envelopment Analysis (DEA). Our work is designed to analyze the performance of a sample made up of the ten main players in the insurance industry in Romania. Assuming a predefined set of five inputs (total expenses, provisions, average number of employees, total placements and intangible assets) and one output (total income) selected from the firms’ balance sheets, we calculate the efficiency scores with the help of DEA techniques for each year from 2016 to 2020. Our results show that Allianz and City are the most efficient firms regardless of the model type VRS or CRS, while Groupama and Omniasig fail to operate at an optimal level in any of the analyzed periods.</p>
</abstract>

The insurance industry has an important role in the economy, being constantly focused on diversifying product portfolios and dispersing risks. Since the uncertainty, the asymmetric information, the current economic and social-political challenges affect the economic performance and competitiveness on the insurance market, it is necessary to focus on the evaluation of the technical efficiency of the players. One of the most complex analytical research tools with increased utility that can be applied to measure the efficiency is the Data Envelopment Analysis (DEA). Our work is designed to analyze the performance of a sample made up of the ten main players in the insurance industry in Romania. Assuming a predefined set of five inputs (total expenses, provisions, average number of employees, total placements and intangible assets) and one output (total income) selected from the firms’ balance sheets, we calculate the efficiency scores with the help of DEA techniques for each year from 2016 to 2020. Our results show that Allianz and City are the most efficient firms regardless of the model type VRS or CRS, while Groupama and Omniasig fail to operate at an optimal level in any of the analyzed periods.

Measuring and Analyzing the Efficiency of Firms in the Insurance Industry Using DEA Techniques

Journal of Social and Economic Statistics

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The insurance industry has an important role in the economy, being constantly focused on diversifying product portfolios and dispersing risks. Since the...

Measuring and Analyzing the Efficiency of Firms in the Insurance Industry Using DEA Techniques

Publicado en línea: 08 feb 2023

Páginas: 59 - 83

DOI: https://doi.org/10.2478/jses-2022-0004

Palabras clave
insurance market, DEA method, efficiency, competition degree, factor productivity, market concentration

© 2022 Alexandra Vintilă et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Measuring and Analyzing the Efficiency of Firms in the Insurance Industry Using DEA Techniques

Publicado en línea: 08 feb 2023

Páginas: 59 - 83

DOI: https://doi.org/10.2478/jses-2022-0004

Palabras claveinsurance market, DEA method, efficiency, competition degree, factor productivity, market concentration

© 2022 Alexandra Vintilă et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Palabras clave
insurance market, DEA method, efficiency, competition degree, factor productivity, market concentration