Based On DEA Method To Assess The Efficiency Of China’s Life Insurance Companies

As we know, Efficiency is economics everlasting melody. From the perspective of the life insurance industry, Efficiency means the optimization processing resources.In the new era of reform and opening up,The efficiency of China’s life insurance industry has been an important issue,improving the efficiency of life insurance industry have a positive meaning to sustainable development of the industry and Competitiveness of the national life insurance industry.In recent years, China’s life insurance company’s level of efficiency has been greatly improved, but the overall sense is still faced with many challenges,such as imperfect laws and regulations, lack of qualified personnel, lack of product innovation, poor management, So to assess the efficiency of life insurance companies has a very important significance.This paper introduces the basic principles and concepts of DEA Method,Concrete steps on DEA, discussion of the meaning and importance of DEA measure of efficiency, DEA analysis of merits and demerits, and DEA model (CCR model and BCC model).Then the paper derives scale efficiency, and an explains the DEA Malmquist index and its decomposition.When the principle of sample selection, input and output indicators selected are determined,it starts to solve DEA model,use comparative analysis, compare the value of the life insurance company’s efficiency from2011to2012, simultaneously analysis of life insurance companies’ Malmquist Indices. Through the initial definition of efficiency factors,I model regression and analyze the results,then analyze the external factors that affect the efficiency of life insurance companies through qualitative analysis,finally the paper put forward some policy suggestions based on this.This paper uses DEA method to analyze the efficiency of China’s life insurance companies,and combined with Malmquist Index to analysis firm dynamic efficiency changes.This information can provide important reference value for life insurance companies and life insurance markets.This paper selects34life insurance companies as a representative sample from2011to2012.Uusing comparative analysis we know that the number of life insurance companies’ Production efficiency is declining,only Generali China Life, Ping An Life, PICC Life, China Life’s production efficiency is at best.In the analysis of Malmquist Index,More than half of the life insurance companies’ productivity is growing, the growth was mainly affected by changes in technology indicators. market share, company size, human capital as internal factors affecting the efficiency of life insurance companies, are explored the significant factors.The results show that the market share has a close relationship with the technical efficiency and scale efficiency, company size can have an impact on technical efficiency,pure technical efficiency and scale efficiency,and human capital is also have an impact on pure technical efficiency and scale efficiency which mean that high-quality talents can enhance the company’s management, thereby enhance its pure technical efficiency and scale efficiency.Finally, this paper summarizes the qualitative analysis of four external factors that may affect the efficiency of life insurance companies.These factors are:1.level of economic development,2.interest rate volatility,3the expected inflation,4.market structure.Based on the above analysis, the paper has five main measures to improve the efficiency of life insurance companies.