Cost, Output, and Scale Economies in the Life and Health Insurance Industry

Dongsae Cho

Journal of Insurance Issues, 1986, vol. 9, issue 1, 12-26

Abstract: The existence or lack of scale economies in the life and health insurance industry is reinvestigated. In the process, numerous output proxies and several cost functional forms are examined in order to select the best-fitting regression models. Also operating and loss costs of insurers are separately analyzed to measure their respective size efficiencies. The results of the study show 1) profound size economics in operating costs with little evidence of scale diseconomies for large insurers, and 2) a weak evidence of size inefficiency for large insureres in terms of loss costs.

Date: 1986
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Persistent link: https://EconPapers.repec.org/RePEc:wri:journl:v:9:y:1986:i:1:p:12-26

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