Efficiency Appraisal of Life Insurance Industry in India- Public versus Private Players

Aparna Bhatia, Megha Mahendru

back

References:

[1] Abd Karim, M. Z. 2005. “Cost efficiency and profitability in Thailand's life insurance industry: a stochastic cost frontier approach.” International Journal of Applied Econometrics and Quantitative Studies 2: 19-36.

[2] Adhikari, A. 2015. “How LIC compares with private insurers.” Business Today, available at: [ ... ].

[3] Afsordeh, M., and H. Moridipour. 2014. “Performance Evaluation of Representatives of Insurance Companies in Iran Using Analytic Network Process (ANP) and Data Envelopment Analysis (DEA).” Euro-Asian Journal of Economics and Finance 2, no. 4: 316-323.

[4] Afza, T., and M.J.E.K. Asghar. 2010. “Efficiency of the insurance industry in Pakistan: an application of non-parametric approach.” Interdisciplinary Journal of Contemporary Research in Business 2, no. 8: 84-98.

[5] Ajibefun, I. A. 2008. “An evaluation of parametric and non-parametric methods of technical efficiency measurement: application to small scale food crop production in Nigeria.” Journal of Agriculture and Social Sciences 4, no. 3: 95-100.

[6] Ansah-Adu, K., C. Andoh, and J. Abor. 2011. “Evaluating the cost efficiency of insurance companies in Ghana.” The Journal of Risk Finance 13, no. 1: 61-76.

[7] Ariff, M., and C. Luc. 2008. “Cost and profit efficiency of Chinese banks: A non-parametric analysis.” China Economic Review 19, no. 2: 260-273.

[8] Barros, C., and P. Wanke. 2016. “Cost efficiency of African insurance companies using a finite mixture model.” South African Journal of Economic and Management Sciences 19, no. 1: 64-81.

[9] Batra, S. 2022. “The LIC story — history, valuation & why its IPO, India’s biggest, matters for Modi government.” The Print, available at [ ... ].

[10] Bawa, S.K., and N. Bhagat. 2015. “Efficiency of life insurance companies operating in Punjab. Pacific Business Review International 7, no. 9: 76-85.

[11] Bawa, S., and R. Ruchita. 2011. “Efficiencies of health insurance business in India: An application of DEA.” American Journal of Social and Management Sciences 2, no. 2: 237-247.

[12] Berger, A.N., and D. Humphrey. 1997. “Efficiency of Financial Institutions: International survey and directions for future research.” European Journal of Operational Research 98, no. 2: 175-212.

[13] Berger, A.N., J.D. Cummins, and M.A. Weiss. 1997. “The coexistence of multiple distribution systems for financial services: the case of property-liability insurance.” The Journal of Business 70, no. 4: 515-546.

[14] Berger, A.N., J.D. Cummins, M.A. Weiss, and H. Zi. 2000. “Conglomeration versus strategic focus: Evidence from the insurance industry.” Journal of Financial Intermediation 9, no. 4: 323-362.

[15] Bhatia, A., and M. Mahendru. 2015. “Measurement and evaluation of cost, revenue and profit efficiency of public sector banks in India.” International Journal of Behavioural Accounting and Finance 5 no. 3-4: 298-313.

[16] Bhatia, A., and M. Mahendru. 2018. “Estimation of Profit, Revenue and Cost Efficiency of Indian Scheduled Commercial Banks.” Wealth: International Journal of Money, Banking & Finance 7, no. 1: 44-50.

[17] Bhatia, A., and M. Mahendru. 2018. “Cost efficiency analysis of scheduled commercial banks: empirical evidence from India.” Journal of Management Development 37, no. 7: 586-602.

[18] Bhatia, A., and M. Mahendru. 2018a. “Assessment of Revenue Efficiency and Return to Scale of Indian Scheduled Commercial Banks.” Management Today 8, no. 4: 336-345.

[19] Bhatia, A., and M. Mahendru. 2018b. “Assessment of revenue efficiency of Indian scheduled commercial banks.” International Journal of Law and Management 60, no. 6: 1234-1254.

[20] Bhatia, A., and M. Mahendru. 2019. “Financial efficiency evaluation of Indian scheduled commercial banks.” Jindal Journal of Business Research 8, no. 1: 51-64.

[21] Bikker, J.A., and M. Van Leuvensteijn. 2008. “Competition and efficiency in the Dutch life insurance industry.” Applied Economics 40, no.16: 2063-2084.

[22] Boonyasai, T., M. Grace, and H. Skipper. 2002. “The Effect of Liberalisation and Deregulation on Life Insurance Efficiency.” Centre for Risk Management and Insurance Research, Georgia State University, GA Working Paper 6, no. 02-2, pp. 1-36.

[23] Borges, M.R., M. Nektarios, and C.P. Barros. 2008. “Analysing the Efficiency of the Greek Life Insurance Industry.” European Research Studies 11, no. 3: 35-52.

[24] Canara HSBC Oriental Bank of Commerce. 2023. “Canara HSBC Oriental Bank of Commerce Life Insurance Company Limite.” Available at https://canarabank.com/insurance/about-us.html.

[25] Chakraborty, K., A. Dutta, and P.P. Sengupta. 2012. “Efficiency and productivity of Indian life insurance industry.” Asia-Pacific Journal of Risk and Insurance 7, no. 1: 1-28.

[26] Choi, B.P., and M.A. Weiss. 2005. “An empirical investigation of market structure, efficiency, and performance in property-liability insurance.” Journal of Risk and Insurance 72, no. 4: 635-673.

[27] Coelli, T., D. Rao, and G. Battese. 1998. An Introduction to Efficiency and Productivity Analysis. Kluwer Academic Publishers.

[28] Colwell, R.J., and E.P. Davis. 1992. “Output and productivity in banking.” The Scandinavian Journal of Economics 94 (Supplement. Proceedings of a Symposium on Productivity Concepts and Measurement Problems: Welfare, Quality and Productivity in the Service Industries): S111-S129.

[29] Carr, R.M., J.D. Cummins, and L. Regan. 1999. “Efficiency in the US life insurance industry: Are insurers minimizing costs and maximizing revenues?” In J.D. Cummins and A.M. Santomer, eds., Changes in the Life Insurance Industry: Efficiency, Technology and Risk Management, pp. 75-115. New York, NY: Springer.

[30] Cummins, J.D., M. Rubio-Misas, and H. Zi. 2004. “The effect of organizational structure on efficiency: Evidence from the Spanish insurance industry.” Journal of Banking & Finance 28, no. 12: 3113-3150.

[31] Cummins, J.D., & Turchetti, G. (1996). Productivity and technical efficiency in the Italian insurance industry (No. 96-10). Wharton School Center for Financial Institutions, University of Pennsylvania.

[32] Cummins, J.D., and M. Rubio-Misas. 2006. “Deregulation, consolidation, and efficiency: evidence from the Spanish insurance industry.” Journal of Money, Credit and Banking 38: 323-355.

[33] Cummins, J.D., and X. Xie. 2008. “Mergers and acquisitions in the US property-liability insurance industry: Productivity and efficiency effects.” Journal of Banking & Finance 32, no. 1: 30-55.

[34] Cummins, J.D., and H. Z. 1998. “Comparison of frontier efficiency methods: An application to the US life insurance industry.” Journal of Productivity Analysis 10: 131-152.

[35] Cummins, J.D., M.A. Weiss, X. Xie, and H. Zi. 2010. “Economies of scope in financial services: A DEA efficiency analysis of the US insurance industry.” Journal of Banking & Finance 34, no. 7: 1525-1539.

[36] Cummins, J. D., M. A. Weiss, and H. Zi. 1999. ”Organizational form and efficiency: The coexistence of stock and mutual property-liability insurers.” Management Science 45, no. 9: 1254-1269.

[37] Dalkiliç, N., and A. A. Ada. 2014. ”Efficiencies of life/pension insurance industry in Turkey: an application of data envelopment analysis.” Journal of Applied Finance and Banking 4, no. 1: 181-191.

[38] Dasgupta, Mithun. 2022. ”Bancassurance contributes 40% to ICICI Pru retail business in H1.” Financial Express, November 3, 2022. Available at [ ... ]

[39] Dash, M., and A. Muthyala. 2018. ”Cost efficiency of Indian life insurance service providers using data envelopment analysis.” Asian Journal of Finance & Accounting 10, no. 1: 59-80.

[40] Diacon, S. R. 2001. “The efficiency of UK general insurance companies.” CRIS Discussion Paper Series No. 2001III, Center for Risk & Insurance Studies, Nottingham University Business School, Nottingham.

[41] Diacon, S. R., K. Starkey, and C. O'Brien. 2002. ”Size and efficiency in European long-term insurance companies: an international comparison.” The Geneva Papers on Risk and Insurance. Issues and Practice 27, no. 3: 444-466.

[42] Donni, O., and F. Fecher. 1997. ”Efficiency and Productivity of the Insurance Industry in the OECD Countries.” The Geneva Papers on Risk and Insurance-Issues and Practice 22, no. 4: 523-535.

[43] Dutta, A., and P.P. Sengupta. 2014. ”Analysis of Revenue Efficiency: Empirical Study of Indian Non-Life Insurance Companies.” In Ambar Nath Ghosh and Asim K. Karmakar, eds., Analytical Issues in Trade, Development and Finance: Essays in Honour of Biswajit Chatterjee, pp. 449-456. New Delhi: Springer India.

[44] Dutta, A., And P.P. Sengupta. 2011. ”Efficiency measurement of Indian life insurance industry in post-reforms era.” Global Business Review 1, no. 3: 415-430.

[45] Economic Times. 2004. LIC's the most trusted services brand. Available at [ ... ].

[46] Economic Times. 2022. LIC vs private insurers: How LIC fares in premiums, expenses from its peers. Available at [ ... ]

[47] Economic Times. 2022. LIC's business drivers in place, execution remains key: Report. Available at [ ... ]

[48] Economic Times. 2012. ”LIC is the most trusted brand in banking and finance space: Trust Research Advisory.” Available at [ ... ]

[49] Edelweiss Tokio. 2023. ”Edelweiss Tokio Life looks at expanding distribution capabilities in Gujarat Edelweiss Tokio Life looks at expanding distribution capabilities in Gujarat.” Available at: [ ... ].

[50] Eling, M., and M. Luhnen. 2010. ”Efficiency in the International Insurance Industry: A Cross-Country Comparison.” Journal of Banking & Finance 34, no. 7: 1497-1509.

[51] Fecher, F., D. Kessler, S. Perelman, and P. Pestieau. 1993. ”Productive Performance of the French Insurance Industry.” Journal of Productivity Analysis 4, no. 1/2: 77-93.

[52] Fenn, P., D. Vencappa, S. Diacon, P. Klumpes, and C. O’Brien. 2008. ”Market structure and the efficiency of European insurance companies: A stochastic frontier analysis.” Journal of Banking & Finance 32, no. 1: 86-100.

[53] Fried, H.O., C.K. Lovell, and S.S. Schmid, Eds. 2008. The measurement of productive efficiency and productivity growth. Oxford University Press.

[54] Fukuyama, H. 1997. ”Investigating productive efficiency and productivity changes of Japanese life insurance companies.” Pacific-Basin Finance Journal 5, no. 4: 481-509.

[55] Garg, C., and M. Deepti. 2008. ”Efficiency of General Insurance in India in the post-liberalization era: a data envelopment approach.” The IUP Journal of Risk & Insurance 2, no. 4: 24-38.

[56] González, J., A. Buelow, and J. Abril-Martorell. 2021. ”Growth in Insurance Market Requires Business Diversification.” Available at [ ... ].

[57] Hsu, W.Y., and P. Petchsakulwong. 2010. ”The impact of corporate governance on the efficiency performance of the Thai non-life insurance industry.” The Geneva Papers on Risk and Insurance-Issues and Practice 35, no. 1: S28-S49.

[58] Huang, L.Y., .Y. Hsiao, and G.C. Lai. 2007. ”Does corporate governance and ownership structure influence performance? Evidence from Taiwan life insurance companies.” Journal of Insurance Issues 30, no. 2: 123-151.

[59] Hussels, S., and D.R. Ward. 2007. The Impact of deregulation on the German and UK life insurance markets: an analysis of efficiency and productivity between 1991-2002. Cranfield University School of Management.

[60] IBEF (India Brand Equity Foundation). 2022. Data available at: https://www.ibef.org/.

[61] Ilyas, A.M. and S. Rajasekaran. 2019. ”An empirical investigation of efficiency and productivity in the Indian non-life insurance market." Benchmarking: An International Journal 26, no. 7: 2343-2371.

[62] Indian Brand Equity Foundation. 2022. Insurance Industry Report. Available at:
https://www.ibef.org/industry/insurance-sector-india.

[63] Invest India. 2022. ”BFSI- Insurance, Insurance market in India is expected reach $ 222 bn by 2026.” Available at: https://www.investindia.gov.in/sector/bfsi-insurance.

[64] IRDAI. 2022. Annual Report 2021-22. Available at: https://new.irdai.gov.in/annual-reports.

[65] Jarraya, B., and A. Bouri. 2014. ”Optimal production plan and profit efficiency in European non-life insurance companies.” Procedia Economics and Finance 13: 69-81. [66] Kader, H.A., M. Adams, P. Hardwick, and W.J. Kwon. 2014. ”Cost efficiency and board composition under different takaful insurance business models.” International Review of Financial Analysis 32: 60-70.

[67] Kader, Halem, Mike Adams, and Philip Hardwick. 2010. ”The Cost Efficiency of Takaful Insurance Companies.” The Geneva Papers on Risk and Insurance - Issues and Practice 35, no. 1: 161-181.

[68] Klumpes, P. J. 2004. ”Performance benchmarking in financial services: Evidence from the UK life insurance industry.” The Journal of Business 77, no. 2: 257-273.

[69] Kumar, K. 2017. ”Canara HSBC Oriental Bank of Commerce Life Insurance ties up with Dhanlaxmi Bank.” The Economic Ties, July 6, 2017. Available at [ ... ].

[70] Kwadjo, Ansah, Andoh Charles, and Abor Joshua. 2012. ”Evaluating the cost efficiency of insurance companies in Ghana.” Journal of Risk Finance 1, no. 3: 61–76.

[71] Li, L. 2011. ”Efficiency Analysis of Life Insurance Companies in Thailand.” University of the Thai Chamber of Commerce. Available at [ ... ].

[72] LIC. 2022. ”History of LIC.” Available at: https://licindia.in/Top-Links/about-us/History.

[73] Mahendru, M., and A. Bhatia. 2017. ”Cost, revenue and profit efficiency analysis of Indian scheduled commercial banks: Empirical evidence across ownership.” International Journal of Law and Management 59, no. 3: 442-462.

[74] Mahlberg, B., and T. Url. 2003. ”Effects of the single market on the Austrian insurance industry.” Empirical Economics 28, no. 4: 813-838.

[75] Mahlberg, B., and T. Url. 2010. ”Single Market effects on productivity in the German insurance industry.” Journal of Banking & Finance 34, no. 7: 1540-1548.

[76] Mathur, T., and U.K. Paul. 2014. ”Performance appraisal of Indian non-life insurance companies: A DEA approach.” Universal Journal of Management 2, no. 5: 173-185.

[77] Micajkova, V. 2015. ”Efficiency of Macedonian insurance companies: A DEA approach.” Journal of Investment and Management 4, no. 2: 61-67.

[78] My insurance club .com India’s 1st IRDAI Approved Insurance Web Aggregator
https://www.myinsuranceclub.com/life-insurance/companies/sahara-life.

[79] Nandi, J.K. 2014. ”Relative efficiency analysis of selected life insurers in India using data envelopment analysis.” Pacific Business Review International 6 , no. 8: 69-76.

[80] Noronh, M.R., and S.R. Shinde. 2012. ”A Comparative Study of Cost Efficiency of Life Insurance Companies in India.” Ganpat University (Kherva, India) Faculty of Management Studies Journal of Management and Research (GFJMR) 4: 1-14.

[81] Noulas, A.G., J. Lazaridis, T. Hatzigayios, and K. Lyroudi. 2001. ”Non-parametric production frontier approach to the study of efficiency of non-life insurance companies in Greece.” Journal of Financial Management & Analysis 14 no. 1: 19-26.

[82] Rahman, M.A. 2013. ”Comparative Study on the Efficiency of Bangladeshi Conventional and Islamic Life Insurance Industry: A Non-parametric Approach.” Asian Business Review 3, no. 2: 80-91.

[83] Rahman, Md. 2015. ”Comparative Study on the Efficiency of Bangladeshi Conventional and Islamic Life Insurance Industry: A Non-Parametric Approach.” Asian Business Review 3, no. 2: 80-91.

[84] Rai, A. 1996. ”Cost efficiency of international insurance firms.” Journal of Financial Services Research 10, no. 3: 213-233.

[85] Ram Mohan, T.T., and S.C. Ray. 2004. ”Comparing performance of public and private sector banks: A revenue maximisation efficiency approach.” Economic and Political Weekly 39, no. 12: 1271-1276.

[86] Rao, N., and S. Periyasamy. 2014. ”Life insurance penetration in rural Areas-Indian perspective.” International Journal of Banking, Risk and Insurance 2, no. 2: 21-29.

[87] Saad, N.M., N.E.H. Idris, and N. Edzalina. 2011. ”Efficiency of life insurance companies in Malaysia and Brunei: a comparative analysis.” International Journal of Humanities and Social Science 1, no. 3: 111-122.

[88] Sabet, R., and A. Fadavi. 2013. ”Performance measurement of insurance firms using a two-stage DEA method.” Management science letters 3, no. 1: 303-308.

[89] Saeidy, P. and S. Kazemipour. 2011. ”Compare the performance of private and public insurance companies in using data envelopment analysis.” World Applied Sciences Journal 13, no. 5: 988-992.

[90] Saha, S.S., and M.N. Roy. 2018. ”Evaluating Efficiency of Indian Life Insurance Companies using Data Envelopment Analysis.” Research Bulletin 43, no. 4: 45-66.

[91] Sen, S. 2019. ”Analysis of cost efficiency of Indian life insurers: a comparison of quantity vs value based DEA approach.” Asia-Pacific Journal of Risk and Insurance 14, no. 1: 2018- 0027.

[92] Shinde, S.R. 2012. ”A comparative study of cost efficiency of life insurance companies in India.” International Journal of Commerce and Business Management 5 no. 2: 210-215.

[93] Siddiqui, S. 2020. ”Evaluating the Efficiency of the Indian Life Insurance Sector.” Indian Journal of Applied Economics 16, no. 1: 72-80.

[94] Sinha, A., and K. Bandopadhyay. 2015. ”An Analysis of Efficiency of General Insurance Industry in India.” Malaysian Management Journal 19: 53-66

[95] Sinha, R.P. 2006. ”Operating Efficiency of Life Insurance Companies: A Data Envelopment Approach.” The ICFAI Journal of Risk and Insurance 3, no. 4: 29-37.

[96] Sinha, R.P. 2007a. ”Operating efficiency of life insurance companies: An assurance region model.” ArthaVijnana 49, no. 3-4: 305-320.

[97] Sinha, R.P. 2010. ”Revenue maximizing efficiency of life insurance companies: some Indian evidence.” IUP Journal of Risk & Insurance 7, no. 3: 19-38.

[98] Sinha, R.P. 2012. ”Are Indian Life Insurance Companies Cost Efficient? Some Recent Empirical Evidence.” Prajnan 41, no. 3: 181-202.

[99] Sinha, R.P. 2015. ”A dynamic DEA model for Indian life insurance companies.” Global Business Review 16, no. 2: 258-269.

[100] Sinha, R.P., and B. Chatterjee. 2009. ”Are Indian life Insurance companies cost efficient?” SSRN Electronic Journal. Available at: http://ssrn.com/abstract=1391904.

[101] Sinha, S. 2017. ”IRDA directs ICICI Prudential Life to takeover Sahara Life.” The Economic Times, India Times, English Edition, Jul 28, 2017. Available at [ ... ]

[102] Tone, K., and B.K. Sahoo. 2005. ”Evaluating cost efficiency and returns to scale in the Life Insurance Corporation of India using data envelopment analysis.” Socio-Economic Planning Sciences 39, no. 4: 261-285.

[103] TRA’s Brand Trust Report. 2019. Available at:
http://www.trustadvisory.info/tra/fullReportPdf/BTR2019.pdf.

[104] Trigo-Gamarra, L., and C. Growitsch. 2010. ”Comparing single-and multichannel distribution strategies in the German life insurance market: an analysis of cost and profit efficiency.” Schmalenbach Business Review 62: 401-417.

[105] Wise, W. 2017. ”A survey of life insurance efficiency papers: Methods, pros & cons, trends.” Accounting 3, no. 3: 137-170.

[106] Wu, D., Z. Yang, S. Vela, and L. Liang. 2007. ”Simultaneous analysis of production and investment performance of Canadian life and health insurance companies using data envelopment analysis.” Computers & operations research 3, no. 1: 180-198.

[107] Yang, Z. 2006. ”A two-stage DEA model to evaluate the overall performance of Canadian life and health insurance companies.” Mathematical and Computer Modelling 43, no. 7-8: 910-919.

[108] Zanghieri, P. 2009. ”Efficiency of European insurance companies: Do local factors matter?” SSRN Electronic Journal.
Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1354108.

Copyright © 2009 | All rights reserved