Empirical Analysis Of Insurance Companies’ Efficiency In China And Its Influencing Factors

Chinese insurance industry has been maintained nearly the annual growth rate of30%from1980to2012.The total of premium income has grown from460million to1.5488793trillion. Its growth rate is much higher than that of GDP. However, global economy has a noticeable decline because of the global financial crisis in2008. The insurance industry has been affected seriously as the financial storm influences investment Banks, commercial Banks and other financial institutions. The world insurance giant AIG has been destroyed by the financial storm and taken over by American government. Besides, many insurance companies from other developed countries have also been affected with various degrees. So, the research of Chinese recent insurance companies’efficiency has the vital practical significance.We take74insurance companies in China from2008to2012as the sample, including25China-owned property insurance companies,12Sino-foreign joint venture property insurance companies,19China-owned life insurance companies and18Sino-foreign joint venture life insurance companies. We analyze technical efficiency, pure technical efficiency and scale efficiency based on data envelopment analysis. The results are as follows. For technical efficiency, main value of China-owned property insurance companies ranks the highest for five years. Main value of Sino-foreign joint venture property insurance companies is much higher than that of China-owned life insurance companies. And main value of Sino-foreign joint venture life insurance companies is the lowest. For pure technical efficiency, main value of Sino-foreign joint venture property insurance companies ranks the highest for five years; main value of China-owned property insurance companies is second. Main value of China-owned life insurance companies is much higher than that of Sino-foreign joint venture life insurance companies. Main value of Sino-foreign joint venture property insurance companies is the lowest. For scale efficiency, main value of China-owned life insurance companies ranks the first, Main value of China-owned property insurance companies is slightly lower than that of China-owned life insurance companies. Main value of Sino-foreign joint venture life insurance companies ranks the third. Main value of Sino-foreign joint venture property insurance companies is the lowest.The results of DEA show that, Chinese property insurance companies’technical efficiency is higher than that of life insurance companies mainly because its pure technical efficiency is higher and life insurance companies’scale efficiency is almost the higher. To be specific, china-owned property insurance companies’pure technical efficiency and scale efficiency is higher, so we can conclude its operating performance is almost excellent. China-owned and Sino-foreign joint venture life insurance company need to improve pure technical efficiency and management level of operating performance. Sino-foreign joint venture property insurance companies need to improve scale efficiency.On the basis of DEA results, we analyze the factors of Chinese property and life insurance companies’scale efficiency through adopting panel threshold regression model. The results find that the increase of total assets makes a positive impact on scale efficiency, but the positive impact gradually diminishes with the increase of total assets. The increase of fixed assets makes a negative impact on scale efficiency. The increase of asset-liability ratio is non-significant for the effect of scale efficiency. For the life insurance company, the increase of total assets makes a positive impact on scale efficiency, but the positive impact gradually diminishes with the increase of total assets. The increase of fixed assets and asset-liability ration is non-significant for the effect of scale efficiency.