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Efficiency of insurance companies in the Czech Republic and Poland

Eva Grmanova () and Ryszard Pukala
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Eva Grmanova: Alexander Dubcek University of Trencin, Slovakia
Ryszard Pukala: The Bronislaw Markiewicz State Higher School of Technology and Economics in Jaroslaw, Poland

Oeconomia Copernicana, 2018, vol. 9, issue 1, 71-85

Abstract: Research background: The insurance market is an important part of the financial system. The international concept of insurance operations brings certainty and helps to balance the economic results. Purpose of the article: The aim of the paper is to compare the efficiency of life insurance of commercial insurance companies in the Czech Republic and Poland using the Data Envelopment Analysis model (DEA). Methods: The methods used in the paper are descriptive statistics, DEA model and Tobit regression model. DEA models are nonparametric quantitative models for efficiency assessment. They use linear programming to transform multiple inputs into multiple outputs. The efficiency of the subjects analyzed is assessed based on the efficiency scores. Findings & Value added: The subject of our analysis was 17 commercial insurance companies in the Czech Republic and 26 commercial insurance companies in Poland. Ten insurance companies were efficient on the common Czech-Polish insurance market. The share of efficient insurance companies was approximately equal. The arithmetic mean of the efficiency scores was higher in Poland than in the Czech Republic. The variability of the efficiency scores of Czech insurance companies was greater than the variability of the efficiency scores of Polish insurance companies. The correlations with efficiency score as the dependent variable and with market share as the independent variable of Tobit regression were very low.

Keywords: efficiency; efficiency score; insurance companies; Data Envelopment Analysis; Tobit analysis (search for similar items in EconPapers)
JEL-codes: G22 C52 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:pes:ieroec:v:9:y:2018:i:1:p:71-85