Product Specialization, Efficiency and Productivity Change in the Spanish Insurance Industry
In this paper we analyze the levels of technical efficiency and productivity growth attained by Spanish insurance companies during a period of deregulation. We compute Malmquist productivity indexes using the estimates of parametric distance function for several specialized insurance branches. In this way, we show that branch specialization matters a great deal and that firms combining two or three product lines (Health, Property-Liabilities and Life) perform better than firms operating in one insurance line exclusively. In the light of these results, we recommend that the remaining restrictions coming from the European Third Directives on the operations of multi-branch firms should be removed. Moreover, from a management point of view, it would be appropriate to encourage the creation of multi-branch insurance firms. However, in all cases, the estimated scores indicate low productivity growth (less than 2% per year) compared with a huge increase in insurance activity (premiums were multiplied by nearly 3 in a decade).
|Date of creation:||Nov 2005|
|Date of revision:|
|Contact details of provider:|| Postal: Ramon Trias Fargas, 25-27, 08005 Barcelona|
Phone: +34 93 542-1222
Fax: +34 93 542-1223
Web page: http://www.barcelonagse.eu
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Tim J. Coelli & Chris O'Donnell, 2003.
"A Bayesian Approach To Imposing Curvature On Distance Functions,"
CEPA Working Papers Series
WP032003, School of Economics, University of Queensland, Australia.
- O'Donnell, Christopher J. & Coelli, Timothy J., 2005. "A Bayesian approach to imposing curvature on distance functions," Journal of Econometrics, Elsevier, vol. 126(2), pages 493-523, June.
- Burgess, John & Walker, Greg, 1982. "Returns to Scale in the Australian Life Insurance Industry: A Comment," The Economic Record, The Economic Society of Australia, vol. 58(162), pages 290-92, September.
- Miguel Ángel Martínez & Irene Albárran & David Camino, 2001. "Executive Management in Insurance Entities: A Comparative Study of Mutual Companies and Joint-Stock Companies in Spain with a View to the 21st Century Market," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan, vol. 26(2), pages 206-231, April.
- Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, vol. 38(3), pages 387-399, July.
- Lucio Fuentelsaz & Jaime Gomez, 2001. "Strategic and Queue effects on Entry in Spanish Banking," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 10(4), pages 529-563, December.
- Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
- Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
When requesting a correction, please mention this item's handle: RePEc:bge:wpaper:244. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bruno Guallar)
If references are entirely missing, you can add them using this form.