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Management Science Letters

ISSN 1923-9343 (Online) - ISSN 1923-9335 (Print)
Quarterly Publication
Volume 3 Issue 1 pp. 303-308 , 2013

Performance measurement of insurance firms using a two-stage DEA method Pages 303-308 Right click to download the paper Download PDF

Authors: Raha Jalili Sabet, Arefeh Fadavi

DOI: 10.5267/j.msl.2012.10.029

Keywords: DEA, Insurance, Performance measurement, Two-stage DEA

Abstract: Measuring the relative performance of insurance firms plays an important role in this industry. In this paper, we present a two-stage data envelopment analysis to measure the performance of insurance firms, which were active over the period of 2006-2010. The proposed study of this paper performs DEA method in two stages where the first stage considers five inputs and three outputs while the second stage considers the outputs of the first stage as the inputs of the second stage and uses three different outputs for this stage. The results of our survey have indicated that while there were 4 efficient insurance firms most other insurances were noticeably inefficient. This means market was monopolized mostly by a limited number of insurance firms and competition was not fare enough to let other firms participate in economy, more efficiently.

How to cite this paper
Sabet, R & Fadavi, A. (2013). Performance measurement of insurance firms using a two-stage DEA method.Management Science Letters , 3(1), 303-308.

Refrences
Banker, R.D., Charnes, A. & Cooper, W.W. (1984). Some models for estimating technical and scale inefficiencies in data envelopment analysis. Management science, 30(9), 61-92.
Barros, C.P., Nektarios, M., & Assaf, A. (2010). Efficiency in the Greek insurance industry. European Journal of Operational Research, 205(2), 431-436
Charnes A, Cooper, W. W., & Rhodes, E. (1978). Measuring the efficiency of decision making units. European Journal of the Operational Research, 2, 429–44.
Charnes A, Cooper W. W., Lewin, A., & Seiford, L. M. (1994). Data envelopment analysis: theory, methodology and applications. Massachusetts: Kluwer Academic Publishers.
Cooper, W.W., Seiford, L. M., & Tone, K. (2000). Data envelopment analysis. Kluwer Academic Publication, Boston, Dordrecht, London.
Cummins, J.D., & Xie, X. (2008). Mergers and acquisitions in the US property-liability insurance industry: Productivity and efficiency effects. Journal of Banking & Finance, 32(1), 30-55
Cummins, J.D., Weiss, M.A., Xie, X., & Zi, H. (2010). Economies of scope in financial services: A DEA efficiency analysis of the US insurance industry. Journal of Banking & Finance, 34(7), 1525-1539.
Kao, C., & Hwang, S-N. (2008). Efficiency decomposition in two-stage data envelopment analysis: an application to non-life insurance companies in Taiwan. European Journal of Operational Research, 185 (1), 418– 429.
Yang, Z. (2006). A two-stage DEA model to evaluate the overall performance of Canadian life and health insurance companies. Mathematical and Computer Modelling, 43(7-8), 910-919.
Yao, S., Han, Z., & Feng, G. (2007). On technical efficiency of China & apos; s insurance industry after WTO accession. China Economic Review, 18(1), 66-86.
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Journal: Management Science Letters | Year: 2013 | Volume: 3 | Issue: 1 | Views: 3785 | Reviews: 0

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