An Efficiency Comparison of the Non-life Insurance Industry in the BRIC Countries

Item Type Journal paper
Abstract

We analyze the efficiency of non-life insurance companies in four of the fastest-growing markets in the world-the BRIC (Brazil, Russia, India, China) countries. An innovative feature of this paper is its incorporation of uncontrollable variables in the efficiency analysis using multi-stage data envelopment analysis (DEA). This approach captures cross-country differences, such as the political and economic environment, and allows distinguishing between managerial inefficiency and inefficiency due to environmental conditions. We find that the environment affects the efficiency of non-life insurers operating in the BRIC countries. Furthermore, in a regression of firm characteristics on efficiency scores we identify four drives of efficiency: Size, profitability, solvency, and ownership form. The results further our understanding of the insurance industry in the BRIC countries in regard to its efficiency and the environment in which it operates.

Authors Eling, Martin & Huang, Wei
Journal or Publication Title European Journal of Operational Research
Language English
Keywords Data envelopment analysis; Multi-stage DEA; Uncontrollable variables; BRIC
Subjects business studies
HSG Classification contribution to scientific community
Refereed Yes
Date May 2013
Publisher Elsevier
Place of Publication Amsterdam
Volume 226
Number 3
Page Range 577-591
Number of Pages 15
ISSN 0377-2217
ISSN-Digital 1872-6860
Publisher DOI 10.1016/j.ejor.2012.11.008
Depositing User Prof. Dr. Martin Eling
Date Deposited 05 Feb 2013 16:41
Last Modified 30 Oct 2018 17:47
URI: https://www.alexandria.unisg.ch/publications/220308

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Citation

Eling, Martin & Huang, Wei (2013) An Efficiency Comparison of the Non-life Insurance Industry in the BRIC Countries. European Journal of Operational Research, 226 (3). 577-591. ISSN 0377-2217

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https://www.alexandria.unisg.ch/id/eprint/220308
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