A decomposition analysis of managerial efficiency for the insurance companies: A data envelopment analysis approach

Nourani, Mohammad and Kweh, Qian Long and Devadason, Evelyn Shyamala and Chandran, V.G.R. (2020) A decomposition analysis of managerial efficiency for the insurance companies: A data envelopment analysis approach. Managerial and Decision Economics, 41 (6). pp. 885-901. ISSN 0143-6570

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Official URL: https://doi.org/10.1002/mde.3145

Abstract

The insurance industry worldwide has become less fragmented through liberalization reforms. Yet, following the transformational changes, there is little empirical evidence on identifying the determinants of managerial efficiency. This paper employs a truncated regression analysis to determine the factors driving managerial efficiency of Malaysian insurers. Overall and divisional efficiencies are derived using data envelopment analysis. The decomposition analysis reveals that the observed inefficiency is mainly caused by investment capability division. The regression findings reveal that determinants of efficiency have dissimilar impacts on overall and divisional efficiencies. This study broadly supports financial liberalization as a means of promoting managerial efficiency. © 2020 John Wiley & Sons, Ltd.

Item Type: Article
Uncontrolled Keywords: Solvency II; Insurance Industry; Reinsurance
Subjects: H Social Sciences > HG Finance
Divisions: Faculty of Economics & Administration
Depositing User: Ms. Juhaida Abd Rahim
Date Deposited: 07 Sep 2020 02:28
Last Modified: 07 Sep 2020 02:28
URI: http://eprints.um.edu.my/id/eprint/25514

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