Measuring and Analyzing the Efficiency of Firms in the Insurance Industry Using DEA Techniques

Vintilă Alexandra (), Trucmel Irina-Maria and Roman Mihai Daniel
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Vintilă Alexandra: Bucharest University of Economic Studies, Romania
Trucmel Irina-Maria: Bucharest University of Economic Studies, Romania
Roman Mihai Daniel: Bucharest University of Economic Studies, Romania

Journal of Social and Economic Statistics, 2022, vol. 11, issue 1-2, 59-83

Abstract: The insurance industry has an important role in the economy, being constantly focused on diversifying product portfolios and dispersing risks. Since the uncertainty, the asymmetric information, the current economic and social-political challenges affect the economic performance and competitiveness on the insurance market, it is necessary to focus on the evaluation of the technical efficiency of the players. One of the most complex analytical research tools with increased utility that can be applied to measure the efficiency is the Data Envelopment Analysis (DEA). Our work is designed to analyze the performance of a sample made up of the ten main players in the insurance industry in Romania. Assuming a predefined set of five inputs (total expenses, provisions, average number of employees, total placements and intangible assets) and one output (total income) selected from the firms’ balance sheets, we calculate the efficiency scores with the help of DEA techniques for each year from 2016 to 2020. Our results show that Allianz and City are the most efficient firms regardless of the model type VRS or CRS, while Groupama and Omniasig fail to operate at an optimal level in any of the analyzed periods.

Keywords: insurance market; DEA method; efficiency; competition degree; factor productivity; market concentration (search for similar items in EconPapers)
JEL-codes: C44 C61 D24 G22 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:jsesro:v:11:y:2022:i:1-2:p:59-83:n:8

DOI: 10.2478/jses-2022-0004

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