IDEAS home Printed from https://ideas.repec.org/a/gam/jjrfmx/v18y2025i5p274-d1657369.html
   My bibliography  Save this article

Rating Liberalization and Efficiency: Evidence from the Property-Liability Insurance Industry

Author

Listed:
  • Ming-Kuo Chen

    (Department of Insurance and Finance Management, Chaoyang University of Technology, Taichung 413310, Taiwan)

  • Chi-Hung Chang

    (Department of Insurance and Finance, National Taichung University of Science and Technology, Taichung 403027, Taiwan)

Abstract

The property-liability insurance market in Taiwan has implemented three-stage deregulation on rate-making since 2002. This research investigates whether the rating liberalization brought about improvements in efficiency and productivity of the property-liability insurance market. Using data on property-liability insurers in Taiwan over 2001 to 2019 and employing data envelopment analysis, we show that technical, cost, and revenue efficiencies have improved after rating liberalization. Post-liberalization productivity has improved as well, and the decomposition of productivity change demonstrates that change in technology contributes most to productivity improvement at the inception of liberalization, and the contribution of efficiency improvement follows when rating controls are further released. Further analyses reveal that technical and revenue efficiency rose in the third stage of liberalization and cost efficiency improved in the second and third stages. Our findings suggest that the removal of price controls creates an operating environment with less restrictions and thus favors progress in efficiency of the property-liability insurance market.

Suggested Citation

  • Ming-Kuo Chen & Chi-Hung Chang, 2025. "Rating Liberalization and Efficiency: Evidence from the Property-Liability Insurance Industry," JRFM, MDPI, vol. 18(5), pages 1-17, May.
  • Handle: RePEc:gam:jjrfmx:v:18:y:2025:i:5:p:274-:d:1657369
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1911-8074/18/5/274/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/1911-8074/18/5/274/
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jjrfmx:v:18:y:2025:i:5:p:274-:d:1657369. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.