An Empirical Study Of Insurance Funds Efficiency Of Chinese Insurance Companies Based On DEA Model

In recent years,the scale of China's property insurance market and the number of insurance companies' premium income has increased a lot.However,in order to compete for market share and customer resources,a large number of property insurance companies begin to choose Price War Competition Mode and continually adjust rates down,thus leading property companies' profit margins decline year by year.The declining profit margins and relaxing insurance regulations make capital investment business become a vital role in property insurance company operating process.At present,the underwriting business and capital investment business has become same important in insurance companies' operating,which is also good for overall profit margins and capital efficiency.This paper first systematically lists the domestic and foreign literatures and defines the concept of the efficiency,the efficiency of insurance funds and efficiency research methods.Considering the special liabilities of insurance companies and comparing single-stage and two-stage DEA model,the paper finally chooses to use DEA model and select data from 15 foreign-funded & domestic-funded companies between 2013 and 2015.This paper mainly studies three aspects:Firstly,the paper sorts out relevant literatures and theories and gives the overview of China's property insurance market situation combined with property insurance funds efficiency.Secondly,the paper carries out normative analysis and empirical analysis of property insurance funds efficiency.In the part of empirical analysis,the paper respectively analyzes and compares the efficiency of underwriting stage and capital investment stage.The results are as followings: As for Technical Efficiency level,in the stage of underwriting business,Chinese property insurance company performed better,while in the stage of capital investment business,foreign property insurance company performed better.As for Scale Efficiency level,no matter in underwriting stage or investment stage,foreign property insurance companies were mostly positive in the scale of efficiency,while the performance of Chinese property insurance companies are uneven,even some large-scale Chinese-funded property insurance companies also showed negative in the scale of efficiency.Lastly,the paper puts forward the corresponding suggestions for the large-scale property insurance companies,the small and medium-sized property insurance companies and the foreign-funded property insurance companies respectively.Also the paper puts forward the improving measures from the aspect of regulators.