An empirical study of cost efficiency in the Irish life insurance industry

Tienyu Hwang and Simon Gao

International Journal of Accounting, Auditing and Performance Evaluation, 2005, vol. 2, issue 3, 264-280

Abstract: Contemporary studies of cost efficiency in the insurance industry have predominantly focused on large economies. This paper investigates scale economies and cost efficiency in the Irish life insurance industry by using the translog cost function and distribution-free method. Increasing returns to scale are found in the industry but the magnitude of cost economies varies with firm size. This study indicates that firms with larger market shares are more likely to exhibit cost efficiency. Furthermore, this study shows that bancassurance firms are more cost efficient than other types of insurers in the Irish life insurance industry, which provides new insights into the cost efficiency of bancassurance.

Keywords: bancassurance; cost efficiency; economies of scale; firm size; life insurance; Ireland. (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijaape:v:2:y:2005:i:3:p:264-280

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