Eling, MartinMartinElingJia, RuoRuoJia2023-04-132023-04-132019-10https://www.alexandria.unisg.ch/handle/20.500.14171/98159https://doi.org/10.1016/j.pacfin.2019.101190We examine the relationship between firm efficiency (E) and profitability (P) with a global dataset of over 5000 insurance companies. Consistent with previous studies in banking and insurance, we document a significantly positive correlation between the efficiency measures and profitability measures. Beyond the extant evidence, we find significant industry dependency in the E-P relationship driven by industry idiosyncrasies, whereas efficiency is more critical to the profitability of life insurers than to that of nonlife insurers. We also show that the E-P relationship is nonlinear: the marginal impact of efficiency on profitability decreases as the insurer's efficiency is close to the best practice.enjournal article