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Efficiency of Life Insurance Companies: An Empirical Study in Mainland China and Taiwan

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  • Hwai-Shuh Shieh
  • Jin-Li Hu
  • Yong-Ze Ang

Abstract

The study employs metafrontier and four-stage data envelopment analysis (DEA) to measure the overall and individual efficiency of life insurance companies in mainland China and Taiwan, after applying the slack-based measure (SBM)-DEA model to adjust the differences in the operating environment across production units. The empirical findings show the following: (a) The environmental factors significantly affected the efficiency of all life insurance companies. After the adjustments, the efficiency score of life insurance companies in mainland China and Taiwan drops for 14.01% and 26.64% in regional frontier, and 38.31% and 12.22% in metafrontier frontier. (b) Before 2008, the life insurance companies in Taiwan are more efficient than those in mainland China.

Suggested Citation

  • Hwai-Shuh Shieh & Jin-Li Hu & Yong-Ze Ang, 2020. "Efficiency of Life Insurance Companies: An Empirical Study in Mainland China and Taiwan," SAGE Open, , vol. 10(1), pages 21582440209, February.
    • Handle: RePEc:sae:sagope:v:10:y:2020:i:1:p:2158244020902060
    DOI: 10.1177/2158244020902060
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