Research on the improvement of technical efficiency of China's property insurance industry: a fuzzy-set qualitative comparative analysis

Zhiguang Li, Yaokuang Li and Dan Long

International Journal of Emerging Markets, 2020, vol. 16, issue 6, 1077-1104

Abstract: Purpose - From the perspective of cause and effect, the operational processes of property insurance companies can be considered as historical events. The purpose of this study is to measure the operating efficiency of China's property insurance industry, explore the determinants that affect technical efficiency and outline the path to achieving high-quality development. Design/methodology/approach - We chose 44 Chinese property insurance companies as research objects. The data were obtained from the Chinese Insurance Yearbook and China Statistical Yearbook 2015–2017. First, the data envelopment analysis (DEA) method was used to calculate the technical efficiency of property insurance companies. Then, Tobit regression and quantile regression were adopted to explore the influencing factors of technical efficiency. Finally, the fuzzy-set qualitative comparative analysis (fsQCA) method was employed to summarize the path to improving the operating efficiency of property insurance companies. Findings - The empirical results in the first stage suggested that the operation efficiency of China's property insurance industry was technically inefficient, and the scale efficiency was relatively better than the pure technical efficiency. In the second stage, we observed that the drivers for firm size, reinsurance rate, claim ratio and equity restriction were important determinants of an insurance firm's efficiency. Research limitations/implications - We also put forward four applicable, targeted and proven ways to improve the technical efficiency of property insurance companies. These configurations are verified by cases of existing property insurance companies, which can provide practical references for the insurance industry. Originality/value - Our research enriches the insurance literature and efficiency methods, particularly regarding the specific paths of improving the technical efficiency. The relationship between elements and results is analyzed from a systematic perspective, and the research results are not only more consistent with what logic might imply but also more instructive for the improvement of reality.

Keywords: Insurance; DEA; fsQCA; Efficiency; Configuration (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijoemp:ijoem-01-2020-0091

DOI: 10.1108/IJOEM-01-2020-0091

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