Book ChapterDOI
Analyzing Firm Performance in the Insurance Industry Using Frontier Efficiency and Productivity Methods
J. David Cummins,Mary A. Weiss +1 more
TLDR
A review of frontier efficiency and productivity methodologies that have been developed to analyze firm performance, emphasizing applications to the insurance industry, is presented in this article, where the focus is on the two most prominent methodologies: stochastic frontier analysis using econometrics and non-parametric frontier analyses using mathematical programming.Abstract:
This chapter reviews the modern frontier efficiency and productivity methodologies that have been developed to analyze firm performance, emphasizing applications to the insurance industry. The focus is on the two most prominent methodologies—stochastic frontier analysis using econometrics and non-parametric frontier analysis using mathematical programming. The chapter considers the underlying theory of the methodologies as well as estimation techniques and the definition of inputs, outputs, and prices. Seventy-four insurance efficiency studies are identified from 1983 to 2011, and 37 chapters published in upper tier journals from 2000 to 2011 are reviewed in detail. Of the 74 total studies, 59.5% utilize data envelopment analysis as the primary methodology. There is growing consensus among researches on the definitions of inputs, outputs, and prices.read more
Citations
More filters
Journal ArticleDOI
Mergers & Acquisitions in the U.S. Property-Liability Insurance Industry: Productivity and Efficiency Effects
J. David Cummins,Xiaoying Xie +1 more
TL;DR: In this article, the productivity and efficiency effects of mergers and acquisitions in the U.S. property-liability insurance industry were analyzed using data envelopment analysis (DEA) and Malmquist productivity indices.
Journal ArticleDOI
The Value of Investing in Enterprise Risk Management
TL;DR: Hoyt and Liebenberg as mentioned in this paper investigated which aspects of enterprise risk management add value and found that the use of economic capital models and dedicated risk managers can improve operating performance, and that requiring the dedicated risk manager report to the board or to the chief executive officer (CEO) also increases value.
Journal ArticleDOI
Mergers and acquisitions in the US property-liability insurance industry: Productivity and efficiency effects
J. David Cummins,Xiaoying Xie +1 more
TL;DR: In this paper, the productivity and efficiency effects of mergers and acquisitions in the US property-liability insurance industry during the period 1994-2003 using data envelopment analysis (DEA) and Malmquist productivity indices were analyzed.
Journal ArticleDOI
The effect of organizational structure on efficiency: Evidence from the Spanish insurance industry
TL;DR: In this article, the authors analyzed Spanish stock and mutual insurers over the period 1989-1997 and found that stocks and mutuals are operating on separate production, cost, and revenue frontiers and thus represent distinct technologies.
Journal ArticleDOI
Evaluating cost efficiency and returns to scale in the Life Insurance Corporation of India using data envelopment analysis
Kaoru Tone,Biresh K. Sahoo +1 more
TL;DR: In this article, the authors apply a new variant of data envelopment analysis model to examine the performance of Life Insurance Corporation (LIC) of India, and show a significant heterogeneity in the cost efficiency scores over the course of 19 years.
References
More filters
Journal ArticleDOI
Measuring the efficiency of decision making units
TL;DR: A nonlinear (nonconvex) programming model provides a new definition of efficiency for use in evaluating activities of not-for-profit entities participating in public programs and methods for objectively determining weights by reference to the observational data for the multiple outputs and multiple inputs that characterize such programs.
Journal ArticleDOI
Formulation and estimation of stochastic frontier production function models
TL;DR: In this paper, the authors define the disturbance term as the sum of symmetric normal and (negative) half-normal random variables, and consider various aspects of maximum-likelihood estimation for the coefficients of a production function with an additive disturbance term of this sort.
Journal ArticleDOI
Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error
Productivity growth, technical progress and efficiency change in industrial countries
TL;DR: In this article, the authors analyzed productivity growth in seventeen OECD countries over the period 1979-88 and found that U.S. productivity growth is slightly higher than average, all of which is due to technical change.