Performance Measure of Indian General Insurance Companies Using DEA and Super Efficiency Model
Keywords:
DEA, Insurance Efficiency, Technical Efficiency, Super Efficiency Model, Value-Added Approach.Abstract
This paper investigates the efficiency of the
general insurance companies operating in India
during the period 2011 to 2017. Data Envelope
Analysis has been applied to estimate the
efficiency of these insurance companies using
publicly available financial data of different
parameters related to their financial health. The
value-added approach has been used which is the
most appropriate method for studying insurance
efficiency (Cummins et al., 1999). The valueadded
approach is closely related to the traditional
measure of financial performance. The efficiency
of each company in comparison with other
companies of the insurance sector is estimated.
The Super Efficiency Model has been applied to
measure the most efficient company over a certain
time horizon among all the companies. Efficiency
score derived using the DEA contributes
significant information towards identifying the
scope for improvement.
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