How Profit Efficient is Indian Life Insurance Industry: A DEA Study

Consolidation in the global banking industry has resulted in the emergence of financial conglomerates that conduct an extensive range of businesses with a group structure. To date, few studies have investigated the performance features of such groups. This study aims to extend the literature by evaluating the cost and profit efficiency and productivity change of Italian financial conglomerates during the 1990s using both parametric and nonparametric approaches. The impact of diversification and growth strategies on cost and profit efficiency is also investigated. The results seem to indicate that Italian banking groups have benefited from a consistent improvement in profit efficiency, while they have not experienced a clear increase in cost efficiency. Indeed, profit efficient banking groups display a high risk-high return profile.

This study investigates the efficiency levels of the Jordanian, Egyptian, Saudi Arabian and Bahraini banking systems. The study sample comprises information on 82 banks operating in Jordan, Egypt, Saudi Arabia and Bahrain over the 1992-2000 period. We utilized the Fourier-flexible stochastic frontier approach to estimate cost and profit efficiency levels in the banking systems under study. Cost efficiency estimates averaged around 95% over the 1992-2000 period. Standard and alternative profit efficiency estimates averaged 66% and 58%, respectively. Islamic banks are found to be the most cost and profit efficient while investment banks are the least (cost and profit efficient). Large banks, in assets terms, appear to be relatively more cost and profit efficient. Geographically, Bahrain banks are found to be the most efficient while Jordanian banks are the least efficient.

PurposeIn the era of Industrial Revolution (IR) 4.0, the integration of digital technologies, automation and data-driven insights has generated a broad wave of transformation across all industries, including the insurance sector. The study focuses on determining how the adoption of these technologies (InsurTech) is changing the life insurance industry, ultimately enhancing the level of customer satisfaction.Design/methodology/approachThe data analysis has been performed with 304 useable responses from the policyholders of life insurance in the north-west region of India. The methodology adopted for this study is partial least squares (PLS) structural equation modeling (SEM). To investigate the predictive relevance of customer satisfaction, the PLS predict technique has been used. Also, importance performance map analysis (IPMA) has been applied to assess the important and performing dimensions of customer satisfaction.FindingsThe outcomes show that the adoption of InsurTech has a positive impact on customer satisfaction. Customer service management and policy management are among the strongest predictors of customer satisfaction, and the predictive relevance is reported to be moderate. IPMA results have suggested that improvements in online distribution of insurance services and customer service management lead to higher customer satisfaction.Research limitations/implicationsThe conceptual model can be tested with the moderating effect of different demographic factors (age, gender etc.), and future research can be done to analyze the mediating role of customer satisfaction between InsurTech adoption and customer loyalty.Practical implicationsThe study offers valuable contributions to the marketing literature, shedding light on the influence of InsurTech adoption on customer satisfaction within the Indian life insurance sector. The research offers a practical approach that could help marketing professionals and policymakers comprehend the utilization of online insurance services, and this understanding can help industry experts to develop customer-oriented products and services.Originality/valueThis research is the first of its kind to test the association between InsurTech adoption and customer satisfaction in the life insurance sector in the Indian context. Research also provides novel insights for policymakers to enhance the satisfaction of customers towards using online insurance services in the near future in developing countries like India.

The article computes cost, revenue and profit efficiency scores of Indian Life Insurance companies during the period 2013-14 to 2020-21 by employing a Non-Parametric Approach, namely, Data Envelopment Analysis (DEA). The paper also examines the efficiency of Life Insurers across ownership by comparing Public and Private Insurance Sector. The concrete findings suggest that the overall performance of Life insurance companies in terms of economic efficiencies is not satisfactory. The average cost, revenue and profit efficiency is .527, .402 and .589 respectively which is far less than the yardstick of 1. The highest level of inefficiency subsists on the revenue side, which is in turn reflected in the average of profit inefficiency. Significantly inferior efficiency scores in the Private Sector seem to have marred the average efficiency scores of Insurance sector in India.

This article focuses on estimating and discussing cost and profit efficiencies related with the Spanish hotel sector. Managers have a special interest in controlling costs as a source of competitive advantage, which may enable companies to improve their results in a continuous manner. However, they usually do not attribute much importance to the improvement of profit efficiency, which is generally much lower than cost efficiency and as a result vital for achieving competitive advantage. In this article, cost and profit efficiencies are estimated in the Spanish hotel sector using a data panel for the years 2007 to 2011 and using distribution free approach methodology. The results show profit efficiency levels significantly lower than levels of cost efficiency, thereby confirming our working hypothesis.

The study has focused on the customer relationship management (CRM) system in the life insurance sector of India. The study revealed the technical progress of India's insurance industry, especially in Tamil Nadu. The deployment of CRM systems in LIC and other private insurance sectors in India was analysed using primary data. India is a populous, diverse country. Life insurers can grow in unused markets. LIC previously dominated the Indian life insurance market, thus buyers had few options. So, private life insurance businesses emerged, and consumers can now readily separate LIC and other private insurance sectors. However, the number of respondents is limited to 51 respondents in this paper, which undermines the external and internal validity of the paper. In some circumstances, it's hard to understand the specific conclusion with real findings. Indian life insurance varies. The insurance market relies on medical and life histories. Life insurance sectors have so much information about their customers and sometimes they cannot properly handle all the data accordingly.

Страхование жизни является одним из активно развивающихся видов на российском страховом рынке. Однако темпы прироста страховых премий с каждым годом уменьшаются. В связи с этим возникает необходимость рассмотрения основных факторов, влияющих на него и определяющих его развитие. В то же время население активно вовлекается в инвестиционную сферу, и инвестиционное страхование жизни становится одним из инструментов инвестирования. Страхование жизни обладает преимуществами по сравнению с другими инвестиционными инструментами, среди которых наличие страховой составляющей в части рисков, связанных с жизнью и здоровьем застрахованного лица. Кроме того, продукты инвестиционного страхования жизни при условии назначения выгодоприобретателя по договору не наследуются. По страхованию жизни предусмотрены льготы по налогообложению страховых премий. Вместе с тем инвестиционное страхование жизни связано со многими проблемами при его реализации. Развитие инвестиционного страхования жизни обусловливается факторами, связанными с регуляторными мерами, а также с общеэкономической ситуацией. В работе рассмотрены основные тенденции развития инвестиционного страхования жизни, в том числе динамика страховых премий, изменение доли инвестиционного страхования жизни на страховом рынке Российской Федерации, доходность инвестиционного страхования жизни по сравнению с банковским вкладом. Авторы сопоставили динамику развития инвестиционного страхования жизни с динамикой таких показателей, как ключевая ставка Банка России, и динамикой изменения стоимости фьючерса на индекс РТС. Основными причинами низкой доходности инвестиционного страхования жизни определены высокий уровень комиссионного вознаграждения и отсутствие широкого ассортимента надежных и долгосрочных активов для инвестирования денежных средств страховых резервов по инвестиционному страхованию жизни. Life insurance is one of the actively developing types in the Russian insurance market. However, the growth rate of insurance premiums is decreasing every year. In this regard, there is a need to consider the main factors that affect and determine the development of life insurance. The population is actively involved in the investment sphere and investment life insurance is becoming one of the investment tools. Life insurance has advantages over other investment instruments. For example, life investment insurance has the life and health insurance of the investor. If there is a beneficiary under the contract, investment life insurance products are not inherited. Life insurance has tax benefits. At the same time, investment life insurance is associated with many problems in its implementation. Such factors as regulatory measures and general economic situation affect the development of investment life insurance. The paper considers the main trends in the development of investment life insurance, including the dynamics of insurance premiums, the change in the share of investment life insurance in the insurance market of the Russian Federation, the profitability of investment life insurance compared with a bank deposit. The authors compared the dynamics of investment life insurance with the dynamics of such indicators as the Bank of Russia key rate and the dynamics of the RTS index futures value. The main reasons for the low profitability of investment life insurance have been identified as the high level of fees and the lack of a wide range of reliable and long-term assets for investing cash reserves in investment life insurance.

Abstraksi Efisiensi merupakan salah satu parameter kinerja yang secara teoritis merupakan salahsatu kinerja yang mendasari seluruh kinerja sebuah organisasi. Efisiensi dalam dunia perbankanadalah salah satu parameter kinerja yang cukup populer, banyak digunakan karena merupakanjawaban atas kesulitan-kesulitan dalam menghitung ukuran-ukuran kinerja perbankan. Pengukuran efisiensi perbankan dapat dilakukan dengan 3 pendekatan yaitu; DataEnvelopment Analysis (DEA), Stochastic Frontier Approach (SFA), dan Distribution FreeApproach(DFA). Secara umum ada 3 pendekatan konsep dasar model efisiensi sector financialyaitu cost efficiency, standard profit efficiency, dan alternative profit efficiency. Dalampenelitian ini metode yang digunakan adalah Stochastic Frontier Approach (SFA). Dalam metode ini, profit dimodelkan untuk terdeviasi dari profit efficient frontier-nyaakibat adanya random noise dan inefisiensi. Profit dalam metode ini dipengaruhi oleh fungsiinput dan output, sedangkan input dan output yang digunakan dalam penelitian ini adalah DanaPihak Ketiga, Modal disetor, penempatan pada BI, penempatan pada bank lain, danpembiayaan yang diberikan. Dengan menggunakan metode SFA ini efisiensi perbankan syariahselama tahun 2010 sampai dengan tahun 2013 mengalami efisiensi rata-rata pertahun sebesar94,37 % dan laba perbankan syariah ini sangat dipengaruhi oleh pembiayaan yang diberikan danpenempatan pada Bank Indonesia.Kata Kunci : Efisiensi, Parameter kinerja keuangan Perbankan Syariah, StochasticFrontier Approach (SFA)

Performance Analysis of Indonesian Islamic and Conventional Banks

Bank Size, Specialization and Efficiency: The Netherlands, 1992-1998

As an intermediary institution, bank has a very vital role in the economic development of a country so bank has to operate efficiently. The efficiency analysis can be conducted with the three approaches, namely cost efficiency, profit efficiency, and alternative profit efficiency. The three approaches can measured with two methode, parametric and non parametric. By using parametric methode (Distribution Free Approach), cost efficiency of 107 commercial banks operating for 10 years (2002- 2011), the average cost efficiency of banks in Indonesia is 0.6729. While the average value of the profit efficiency in Indonesian banks is 0.96363 or more efficient than cost efficiency. The score of alternative profit efficiency Indonesian banks is 0.965957. The cost efficiency of commercial banks on average have no strong correlation with all financial ratios of banks. The profit efficiency have a strong relationship with financial ratios ROA and BOPO. Financial performance of the bank's ROE ratio has a moderate correlation with the level of profit efficiency. While the level of alternative profit efficiency have a strong relationship with financial performance ratios ROE, ROA, and ROA. NIM ratio has a low relationship with alternative profit efficiency. Keyword: Distributin Free Approach, Cost Efficiency, Profit Efficiency, and Alternative Profit Efficiency.

Using data envelopment analysis, this paper presents a scheme to decompose industry efficiency into two components: learning efficiency and harmony efficiency. This decomposition scheme is empirically illustrated on 23 life insurance companies in India for 8 years (2011–2012–2018–2019). Our two broad empirical findings reveal that first, as per the year‐wise results, the Indian life insurance industry has the potential to increase its efficiency by 28% by improving its learning efficiency by 20% and harmony efficiency by 10%; and second, based on the results on the top 75 promising mergers, the potential gains stem from learning rather than harmony.

Effectiveness of Lic in Our Life in India

Efficiency in the Life Insurance Industry: What are the Efficiency Gains from Bancassurance?

PurposeThe purpose of this paper is to analyze and evaluate cost efficiency (CE) scores of Indian Scheduled Commercial Banks (SCBs) in India over a period of 22 years, i.e. 1991–1992 to 2012–2013.Design/methodology/approachData envelopment analysis (DEA) – a non-parametric approach is used to calculate efficiency scores of banks. Further the efficiency scores are decomposed into technical and allocative efficiency. The differences in the efficiency scores across ownership as well as across reformatory and post-reformatory era are examined by applying Panel Tobit Regression.FindingsThe paper also identifies the reason for cost inefficiency among Indian banks. In addition, the nature of their return to scale of all SCBs has also been evaluated. The results of the paper depict that Indian SCBs have never achieved full CE score of 1 in any of the years of study. The dominant reason identified behind cost inefficiency is allocative inefficiency. Surprisingly, the results also highlight that SCBs exhibit higher CE scores in reformatory era as compared to the post-reformatory era.Originality/valueWith specific reference to India, even lesser literature is found on CE. Indian banking sector has witnessed many changes on account of liberalization, privatization and globalization (LPG). Before banks adapted to the new environment, the global financial crisis acted as a fuel to fire affecting the performance of banks. Thus, a reassessment over a longer period would help to know a wholistic view of the issue of cost inefficiency, which has always been a troubling factor for Indian banks.