The Efficiency Of Insurance Companies In China

The study on efficiency of insurance industry is chaos in the efficiency measure method,the input and output indicators to choose and other issues.On the basis of the literature review,the paper points out that:(1)The parametric method has more advantages than the non-parametric method when considering the efficiency of the insurance industry.(2)The insurance company takes the social security function,which is the root of "different" efficiency measure method.(3)This paper finally puts forward two sets of the system to determine the input output from profit and production.In this paper,on the basis of input-output indexes of the new,according to the researches of predecessors,this paper first carries on the preliminary measurement of the selected China 77 insurance companies using the efficiency measurement method of DEA,found that there is the large gap between the efficiency results of two index system,and the value of business angle value is superior to the value of profits.Only 9 insurance companies can get a full point both of business and profit efficiency value.And they are accounted for 11.69% in all measured insurance companies.We have reason to believe that the efficiency of China's insurance companies is still need to be improved.Because the DEA method regards all input elements as an unified whole,after which measure the decision unit for comprehensive utilization in a variety of factors of production to achieve the capacity and level of maximum output,but does not distinguish each of the elements.With the directional distance function,the input impact can be put onto output in the analysis framework of efficiency.We are on the basis of the traditional Luenberger Productivity Index and improve the index,drawing Input Slacked-based Productivity(ISP)into Luenberger Productivity Index,ISP productivity index can put input oriented directional distance function into F?re-Lovell efficiency measurement method,and can calculate the changes of the single input factor productivity.Therefore,in order to further calculate the productivity change of individual elements in each index system,this paper measures the total factor productivity of 77 insurance companies in China,using the method of ISP to measure the total factor productivity of the 77 insurance companies in China,we can conclude that: first is that the efficiency of foreign insurance companies is higher than the efficiency of Chinese insurance companies,corporate governance model may be a big reason.The foreign insurance companies use the " line management structure " in their management,the convey of the work instructions and implementation will be more timely as well as the feedback;and the Chinese insurance companies use the "flat" management mode,staff internal communication instructions lack of effectiveness.Convey can't be timely feedback,the replacement cost increase,these are the results of insurance companies as a disadvantage in the competition efficiency.Second is phenomenon of the efficiency of Chinese insurance companies are degenerating,Dubon Insurance is the worst.From the perspective of profit,the contribution of labor productivity to Chinese insurances is minimum;and from a business perspective,the inhibition of capital productivity to total factor productivity of Chinese insurance industry is the most obvious,which means that expansion of the size of the company will only reduce the efficiency of the company.The reason may be the rapid development of economic environment in recent years,the development of insurance companies have entered the bottleneck period.The existing system of insurance companies is facing great challenges,and the demand for the transformation and development of insurance companies is becoming more and more obvious.Insurance company earlier on system transformation,take market efficiency advantage through ascension,the more you place in the wave of economic development.Third is that the efficiency of insurance companies in the eastern region is fluctuating.The reason for this is that the eastern insurance company development is relatively mature,and insurance companies will not have long-term development without the innovation,therefore,the regression of efficiency is the inevitable performance of insurance companies.The insurance companies in the western region have advantages in the "performance" relative those in the middle regions,it is because,in the underdeveloped western regions,with the development of economy,there is scale economy.Although the efficiency of the whole industry in backward,due to the existence of scale economy,the fluctuations of efficiency about insurance companies in the western region are more stable.Four is that it is limited for insurance companies to increase labor input to enhance profit,from a business point of view,it's also to curb the insurance company's total factor productivity,this phenomenon is most obvious in Western china.The inhibitory effect of the labor input to the total factor productivity in the insurance company is due to the insurance company more personnel than work available.The insurance company internal personnel structure is imperfect,huge management and administrative staff input is the main reason for the negative productivity.The developed regions of China attract a large number of high-quality talents,which is not conducive to the marginal productivity of the labor force in underdeveloped areas.Five is that from a business perspective,the Chinese insurance company TFP,the capital investment there is a huge "waste" in the eastern part of China,the insurance companies in the various regions of the capital investment scale seriously exceeds the optimal scale in each region,resulting in a large number of idle resources,thus increasing the inhibitory effect of capital on the whole factor productivity.The six is the western region investment insurance agent can effectively increase the total factor productivity in the area of insurance company,insurance agent in the economically developed areas can also be appropriate to lead the increasement of TFP of the insurance company,but should be prudent and,in the central and western regions of the insurance company,it's ok to increase in the number of insurance agents to improve the total factor productivity of the area of the insurance company.