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Public sector general insurance companies in India: potential gains from merger

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  • Ram Pratap Sinha

Abstract

The Indian general insurance industry underwent major structural changes in terms of competition, economies of scale and scope and pricing during the last 15 years as a result of the deregulation of the insurance market since 1999. The entry of the new general insurance companies resulted in a decline in the market share of the public sector general insurance companies to a level of 55%. Against this backdrop, the present study evaluates the potential gains from merger of public sector general insurance companies using data envelopment analysis for the years 2012-2013 and 2013-2014. The study computes overall efficiency gains and decomposes the same into learning, scale and scope effects. The results reveal that the overall potential gain from the merger is negative for both the years due to the presence of strongly negative scale effect.

Suggested Citation

  • Ram Pratap Sinha, 2017. "Public sector general insurance companies in India: potential gains from merger," International Journal of Business and Globalisation, Inderscience Enterprises Ltd, vol. 19(1), pages 79-92.
    • Handle: RePEc:ids:ijbglo:v:19:y:2017:i:1:p:79-92
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    Citations

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    Cited by:

    1. Yung‐ho Chiu & Tai‐Yu Lin & Tzu‐Han Chang & Yi‐Nuo Lin & Shih‐Yung Chiu, 2021. "Prevaluating efficiency gains from potential mergers and acquisitions in the financial industry with the Resample Past–Present–Future data envelopment analysis approach," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(2), pages 369-384, March.
    2. Ram Pratap Sinha, 2019. "Total Factor Productivity Growth of Indian General Insurance Companies in the Recent Period: A Bootstrapped Approach," Journal of Infrastructure Development, India Development Foundation, vol. 11(1-2), pages 59-80, June.
    3. Narendar V., Rao & K.S., Reddy, 2017. "Guest Editorial: Institutional role, the Market for corporate control and Firm performance," MPRA Paper 80235, University Library of Munich, Germany.

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