Efficiency of Insurance Companies : Application of DEA and Tobit Analyses

• Autorzy: Eva Grmanová , Herbert Strunz
• Języki publikacji: EN

Abstrakty

EN

The aim of this paper is to determine the relationship between technical efficiency and profitability of insurance companies. The profitability of insurance companies was expressed by such indicators as ROA, ROE and the size of assets. We analysed 15 commercial insurance companies in Slovakia in the period of 2013-2015. Technical efficiency scores were expressed using DEA models. The relationship between the technical efficiency score and the indicators of profitability was expressed using censored regression, i.e. the Tobit regression model and the Mann-Whitney U-test. The relationship between the technical efficiency score in the CCR and BCC models and all the groups formed on the basis of the return on assets and the group formed basing on the return on equity was not confirmed. Statistically significant difference between average technical efficiency score in the CCR model in the group of insurance companies with ROA <1%,2%) and technical efficiency score in the CCR model in the group of insurance companies with ROA equal or higher than 2 was confirmed. Insurance companies with ROA equal or higher than 2 achieved greater average efficiency score in the CCR model than the group of insurance companies with ROA <1%,2%). (original abstract)

Słowa kluczowe

EN

Insurance companies; Data Envelopment Analysis (DEA); Tobit model; Return on assets (ROA); Return on equity (ROE); Mann-Whitney test

PL

Przedsiębiorstwo ubezpieczeniowe; Metoda DEA (analiza obwiedni danych); Model tobitowy; Rentowność aktywów; Rentowność kapitału własnego; Test Mann-Whitney

• Czasopismo: Journal of International Studies
• Rocznik: 2017
• Tom: 10
• Numer: nr 3
• Strony: 250--263

Twórcy

autor

Eva Grmanová

• Alexander Dubček University of Trenčín, Slovak Republic

autor

Herbert Strunz

• Alexander Dubček University of Trenčín, Slovak Republic

Bibliografia

• Barros, C. P., Nektarios, M., & Assaf, A. (2010). Efficiency in the Greek insurance industry. European Journal of Operational Research, 205(2), 431-436.
• Batir, T. E., Volkman, D. A., & Gungor, B. (2017). Determinants of bank efficiency in Turkey: Participation banks versus conventional banks. Borsa Istanbul Review, 17(2), 86-96.
• Berger, A. N., & Humphrey, D. B. (1997). Efficiency of financial institutions: International survey and directions for future research. European Journal of Operational Research, 98(2), 175-212.
• Borges, M. R., Nektarios, M., & Barros, C. P. (2008). Analysing the efficiency of the Greek life insurance industry. European Research Studies, 11(3), 35-52.
• Branka, J., & Mihelja, Z., M. (2013). Banks and insurance companies efficiency indicators in the period of financial crisis: the case of the republic of Croatia. Ekonomska Istrazivanja, 26(1), 203-223.
• Charnes, A., Cooper, W . W ., & Rhodes, E. (1978). Measuring the efficiency of decision-making units. European Journal of Operational Research, 2(6), 429-444.
• Delhausse, B., Fecher, F., Perelman, S., & Pestieau, P. (1995). Measuring productive performance in the non-life insurance industry: the case of French and Belgian markets. Tijdschrift voor Economie en Management, 40(1), 47-69.
• Diacon, S. R., Starkey, K., & O'Brien, C. (2002). Size and efficiency in European long-term insurance companies: An international comparison. The Geneva Papers on Risk and Insurance. Issues and Practice, 27(3), 444-466.
• Donni, O., & Fecher, F. (1997). Efficiency and productivity of the insurance industry in the OECD countries. Geneva Papers on Risk and Insurance. Issues and Practice, 22(4), 523-535.
• Eling, M., & Luhnen, M. (2010). Efficiency in the international insurance industry: A cross-country comparison. Journal of Banking & Finance, 34(7), 1497-1509.
• Fandel, P. (2001). Environmental factors in efficiency assessment in agriculture. Economic and Managerial Aspects Sustainable Development of Agriculture. Nitra. Retrieved from http://spu.fem.uniag.sk.
• Finstat. (2015). Database of Data. Retrieved from http://finstat.sk.
• Greene, W. H., & Segal, D. (2004). Profitability and efficiency in the US life insurance industry. Journal of Productivity Analysis, 21(3), 229-247.
• Huang, W., & Eling, M. (2013). An efficiency comparison of the non-life insurance industry in the BRIC countries. European Journal of Operational Research, 226(3), 577-591.
• Hussels, S., & Ward, D. R. (2007). The Impact of deregulation on the German and UK life insurance markets: an analysis of efficiency and productivity between 1991-2002. Retrieved from https://dspace.lib.cranfield.ac.uk/bitstream/1826/3947/1/Impact_of_deregulation_on_the_German_and_ UK_life_insurance_markets-RP4-07.pdf.
• Insurance Companies. (2013). Annual Reports 2013. Insurance Companies. (2015). Annual Reports 2015.
• Jablonský, J., & Dlouhý, M. (2004). Models for evaluation of production units' efficiency. Professional Publishing, Prague.
• Jurčević, B., & Žaja, M. M. (2013). Banks and insurance companies efficiency indicators in the period of financial crisis: The case of the Republic of Croatia. Economic Research-Ekonomska Istraživanja, 26(1), 203-224.
• Klumpes, P. J. (2004). Performance benchmarking in financial services: Evidence from the UK life insurance industry. The Journal of Business, 77(2), 257-273.
• Singh, D., & Fida, B., S. (2015). Technical efficiency and its determinants: an empirical study on banking sector of Oman. Problems and Perspectives in Management, 13(1), 168-175.
• Xiping, W., & Yuesheng, L.(2007).Banking efficiency in China: application of DEA and Tobit Analysis. In International Conference of Management Science and Engineering of IEEE. Retireved from http://www.seiofbluemountain.com/upload/product/201001/1263801732sjpnzhnd.pdf.
• Yakob, R., Yusop, Z., Radam, A., & Ismail, N. (2014). Two-stage DEA method in identifying the exogenous factors of insurers' risk and investment management efficiency. Sains Malaysiana, 43(9), 1439-1450.
• Yao, S., Han, Z., & Feng, G. (2007). On technical efficiency of China ́s insurance industry after WTO accession. China Economic Review, 18(1), 66-86.
• Zimková, E. (2015). Technical efficiency and super-efficiency of the insurance sector in Slovakia. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 63(6), 2205-2211.

Identyfikatory

DOI

10.14254/2071-8330.2017/10-3/18