Revenue efficiency evaluation of life insurance companies in India: identification of leaders and laggards
Benchmarking: An International Journal
ISSN: 1463-5771
Article publication date: 16 December 2021
Issue publication date: 29 November 2022
Abstract
Purpose
The purpose of this article is to evaluate revenue efficiency performance of life insurance companies in India. The study also compares if private or public insurance sector is more “revenue efficient”. Furthermore, the study determines the nature of return to scale (RTS) and identifies the leaders and laggards amongst insurance companies operating in India.
Design/methodology/approach
Revenue efficiency is calculated by employing data envelopment analysis – a non-parametric approach, on a data set of 24 insurance companies over the period 2013–2014 to 2017–2018.
Findings
The empirical results suggest that life insurance companies in India could generate only 34.4% of revenue, which is very less than what these are expected to generate from the same inputs. Majority of life insurance companies operating in India are operating at decreasing return to scale (DRS). There is a reduction in leaders and the highest proportion of companies is falling in the category of laggards.
Originality/value
As per the best knowledge of researchers, no empirical work has been carried out with respect to measuring the revenue efficiency of Indian insurance companies. The current study appropriately fills the gap by not only calculating the revenue efficiency scores of insurance companies in India but also provides insights into the causes of revenue inefficiencies. It also gives implications for efficient and effective management of insurance companies.
Keywords
Citation
Bhatia, A. and Mahendru, M. (2022), "Revenue efficiency evaluation of life insurance companies in India: identification of leaders and laggards", Benchmarking: An International Journal, Vol. 29 No. 10, pp. 3133-3162. https://doi.org/10.1108/BIJ-01-2021-0051
Publisher
:Emerald Publishing Limited
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