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Efficiency of life insurance companies in Malaysia and Brunei: a comparative analysis

Md Saad, Norma and Haji Idris, Nur Edzalina (2011) Efficiency of life insurance companies in Malaysia and Brunei: a comparative analysis. International Journal of Humanities and Social Science, 1 (3). pp. 111-122. ISSN 2221-0989 (O), 2220-8488 (P)

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This study focuses on the efficiency of the life insurance industry in Brunei and Malaysia. Data Envelopment Analysis(DEA) is used to explore the contributions of technical and efficiency change to the growth of productivity in the Malaysian and Brunei life insurance industries by applying the generalized output-oriented Malmquist index for the year 2000-2005. The output-input data consists of a panel of 9 life insurance firms in Malaysia and 2 life insurance companies in Brunei that were chosen as the sample of the study. This study utilizes two inputs and two outputs, namely, commission and management as well as premium and net investment income, respectively. In the DEA technique, efficiency is measured by the Malmquist index. The Malmquist efficiency measures are decomposed into two components: the efficiency change and technical change index. Efficiency change is again decomposed into pure efficiency and scale efficiency. It is found that, on average, the TFP of the life insurance industry is mainly due to both efficiency and technical changes where the main source of the efficiency change is scale efficiency rather than pure efficiency.

Item Type: Article (Journal)
Additional Information: 1304/3263
Uncontrolled Keywords: Data Envelopment Analysis (DEA); Malmquist index; Insurance efficiency; Malaysia, Brunei
Subjects: H Social Sciences > HG Finance > HG8011 Insurance
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button): Kulliyyah of Economics and Management Sciences > Department of Economics
Depositing User: Prof. Dr Norma Md Saad
Date Deposited: 27 Sep 2011 16:13
Last Modified: 09 Nov 2011 12:30
URI: http://irep.iium.edu.my/id/eprint/3263

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