ISSN: 1945-7553
CODEN: JTEVAB
Published Online: 3 December 2009
Page Count: 8

The Efficiency Analysis of Life Insurance Company in Taiwan: Two-Stage Data Envelopment Analysis

Tsai, Hui-Yin
Dept. of Business Administration, Yuanpei Univ., Hsin Chu,

Wang, An Siou
Dept. of Business Administration, Yuanpei Univ., Hsin Chu,

(Received 13 May 2009; accepted 24 October 2009)

Abstract

In this research we use the two-stage data envelopment analysis (DEA) and divide life insurance activities into two stages according to the production characteristics of 11 life insurance companies in Taiwan. The first stage is the operational efficiency, and the second stage is the profitability efficiency. Analysis of the input and output data during the 2005–2006 period was made for 11 life insurance companies in Taiwan. The aim of this analysis was to investigate the relative efficiency of each life insurance company at various stages of production activities. The efficiency of decision processes that can be divided into single stages has been measured for the whole process as well as for each stage separately by using the conventional DEA methodology in order to identify the causes of inefficiency.

Keywords:
two-stage DEA, life insurance companies, operational efficiency, profitability efficiency

Paper ID: JTE102495
DOI: 10.1520/JTE102495
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