DEA Method In Efficiency Analysis Of Life Insurance Companies In China

After joining WTO,the opening up of China insurance market has brought the serious competition among all life insurance companies. How to strengthen competitive ability and enhance the manage efficiency become the more important part of every insurance company. Expected to provide useful reference information, the paper uses Data Envelopment Analysis and Malmquist productive index to estimate the efficiency of life insurance companies in our country.Firstly, the paper clears the concept of the efficiency and explains technical efficiency, pure technical efficiency and scale efficiency in details and uses the value added approach as the criterion to set the input variables and output variables.Secondly, the DEA method (Data Envelopment Analysis) is selected as the evaluation method. In order to obtain the information of relative efficiency, we use Input-DEA CCR model and Input-DEA BCC model. In order to obtain the information of efficiency changes, Malmquist productive index which is the extension of the DEA method is also used.Then empirical analysis is taken. On one hand, the paper analyzes from the whole to get information of the efficiency and efficiency change about the whole industry. On the other hand, sample companies are divided into three types of company. By analyzing the results of different types of life insurance companies, we can get more efficiency and efficiency change information among different types of companies, and using simple statistical test to verify. Then, a simple regression analysis is taken to get the information about correlation.Finally, it's the summary about the result of empirical analysis and obtains some solutions to improve efficiency. From the results, it finds that the life insurance industry exists resources waste but the development tendency assumes brightly; The different types of life insurance companies is still having a gap in efficiency but in efficiency change has no significant difference. And the efficiency has relation to time and scale but no relation to the capital source .The efficiency change has relation to scale but no relation to time and the capital source.