Abstract
We look at technical efficiency and productivity changes in the life microinsurance (LMI) portfolio of insurance companies in India. The central objective is to empirically examine the ‘tug of war’ between efficiency and product diversity in the Indian insurance market. The data used in this research is available in the Handbook on Indian Insurance Statistics (Insurance Regulatory and Development Authority of India). First, we emphasise that four-fifths of LMI insurers in our sample were technically inefficient. Second, through the use of the data envelopment approach (DEA), Malmquist total factor productivity index (MTFP), and Tobit regression analyses, we demonstrate that insurers could improve managerial ability by organising inputs in the production process more effectively. Finally, we provide empirical support for the strategic focus hypothesis by demonstrating that product diversification has adverse effects on the technical efficiency of insurers.
| Original language | English |
|---|---|
| Pages (from-to) | 527-547 |
| Number of pages | 21 |
| Journal | Geneva Papers on Risk and Insurance: Issues and Practice |
| Volume | 44 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - 01-07-2019 |
All Science Journal Classification (ASJC) codes
- Accounting
- Business, Management and Accounting(all)
- Finance
- Economics and Econometrics