| The insurance industry in China is a relatively young industry, it had experienced stagnation period. However, with the opening up and market-oriented reforms, the economy has developing rapidly. The demand for insurance services has become increasingly prominent, and the insurance industry has entered a period of rapid growth, becoming a very important sector of national economy. There are more and more players in China's insurance market since the sector opening up. Local enterprises and joint ventures have different strengths and weaknesses. So, for different types of companies, what kind of factors affect the efficiency most is worth studying. Under the new circumstances, how to improve the company's efficiency, how to use and allocation of resources in a rational way, will be the key to enhance competitiveness. Therefore, the study on the current market and the efficiency of life insurance companies, must have practical significance for the development of China's insurance industry.This paper is an empirical study, using DEA method and selecting 13 companies existing in China's current life insurance market as samples. It will calculate the values separately for each company in the years 2006-2008 of the technical efficiency, pure technical efficiency and scale efficiency. The technical efficiency can express a maximum output level with a particular input; pure technical efficiency is the part of technical efficiency with scale excluded; scale efficiency demonstrates the impact of scale on efficiency. For each indicator, 1 means efficient, while less than 1 means inefficient. Through the analysis of each sample firms each year in various efficiency indicators, we could derive the reasons of inefficient. Through three years analysis, we can see the development trend of China's life insurance industry, as well as changes in the efficiency of different types of companies.The results show that: First, the overall efficiency of China's life insurance companies have yet to be improved; inefficient companies abound and the scale of inefficiency is the cause of the overall inefficiency of the main factors. Second, generally speaking, the efficiency of Chinese-funded life insurance companies is better than joint ventures'. Third, during three years, efficiency of joint ventures earned continuous improvement, driven by scale efficiency, while the efficiency of Chinese-funded companies decreased slightly. Fourth, the difference of technological level between Chinese-fundeds and foreign-fundeds is not very much, while the difference of scale efficiency is much bigger. In this paper, reasons of inefficiency to the life insurance companies in China have been studied and suggestions have been made. |
