Two-Stage Evaluation of Life Insurance Industry in Taiwan Using Data Envelopment Analysis

Abstract:

This study sourced the 2010 data of 25 Taiwanese life insurance companies, and conducted data envelopment analysis (DEA) to evaluate their operating efficiencies. The results can provide references for insurance companies and relevant institutions. The findings showed that there are nine DMUs with an overall efficiency of 1 under DEA at the single stage. Under DEA production efficiency evaluation, there are 15 DMUs with an overall efficiency of 1. Under second stage investment efficiency evaluation, there are 8 DMUs with an overall efficiency of 1. The management matrix diagram classifies 25 life insurance companies into four types, and suggestions are provided for each type of companies for improvements. The evaluation model of two-stage DEA can help measure operational performance and determine the different operations of each stage. The findings indicated that most companies are high product efficiency and low profit or lower product efficiency and profit than other insurance companies. The result can serve as decision references for relevant supervisory authorizes and investors, and in particular, provide reference indicators for life insurance companies, or the supervisory could modify relevant law under not affecting inventors’ benefits.

• Periodical: Advanced Materials Research (Volumes 468-471)
• Pages: 2588-2598
• DOI: https://doi.org/10.4028/www.scientific.net/AMR.468-471.2588
• Online since: February 2012
• Authors: Hsien Ta Lin
• Keywords: Data Envelopment Analysis (DEA), Efficiency, Life Insurance Industry

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