Takaful insurance efficiency in the GCC countries

Abstract

Purpose

The purpose of this paper is to analyze the performance of the Takaful insurance firms in the Gulf Cooperation Council (GCC) countries and do a relative analysis for its different units.

Design/methodology/approach

This paper analyzes the technical, pure technical, cost and allocative efficiency of Takaful firms in the GCC countries using data envelopment analysis (DEA) methodology.

Findings

The Takaful insurance industry in GCC is highly technical and pure technical efficient. However, it is moderately cost efficient, and there is a large opportunity for improvement. UAE and Qatar score the highest technical efficiency, while Saudi Arabia and UAE are the most cost efficient among the GCC countries.

Originality/value

The primary contribution of this paper is to provide the first DEA analysis of the Takaful industry in the GCC countries. To the best of the author’s knowledge, this is the first study on the Takaful insurance industry that uses different types of efficiency measures, namely technical, pure technical, allocative and cost efficiency, in the GCC countries. This paper also contributes in the literature of the inputs and outputs selection for the Takaful insurance efficiency calculation.

Citation

Al-Amri, K. (2015), "Takaful insurance efficiency in the GCC countries", Humanomics, Vol. 31 No. 3, pp. 344-353. https://doi.org/10.1108/H-05-2014-0039