The Empirical Research On Efficiency Of China's Insurance Industry

The efficiency of insurance companies, not only directly reflects the core competitiveness of insurance companies, but also is a key concern of policy makers to encourage further development of the insurance industry. China joined the WTO in 2001. With the stock reform of state insurance companies and the establishment of many commercial insurance companies as well as the entry of foreign companies, the competition environment of insurance market in China becomes more and more fierce. Efficiency has been the reality that insurance companies can't avoid. Therefore, research on the efficiency and its influencing factors of China's insurance companies has important academic and realistic meanings. This paper aims at the efficiency of China's insurance industry.After reviewing the existing researches at home and abroad, in this paper Data Envelopment Analysis (DEA) is used to evaluate the efficiency of 23 insurance companies in China from 1999 to 2003. In order to make up for the lack of past domestic study on comparison of "efficient" insurance companies with DEA, this paper is applying the "Super-efficiency" model to rank in order of efficiency of insurance companies, and then tests the stability of the efficiency measurement with Spearman Correlation. Basing on the above efficiency measurement, we empirically analyze some influencing factors on insurance companies' efficiency. The result of the study shows that scale of company, business expanding, asset structure, and ability of paying-back have influence on the efficiency of insurance companies in China. At the end this paper gives some suggestions on improving efficiency of insurance companies on the basis of above empirical study.