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Research on the improvement of technical efficiency of China's property insurance industry: a fuzzy-set qualitative comparative analysis

Zhiguang Li (School of Management, Hefei University of Technology, Hefei, China)
Yaokuang Li (School of Management, Hefei University of Technology, Hefei, China)
Dan Long (School of Management, Hefei University of Technology, Hefei, China)

International Journal of Emerging Markets

ISSN: 1746-8809

Article publication date: 15 June 2020

Abstract

Purpose

From the perspective of cause and effect, the operational processes of property insurance companies can be considered as historical events. The purpose of this study is to measure the operating efficiency of China's property insurance industry, explore the determinants that affect technical efficiency and outline the path to achieving high-quality development.

Design/methodology/approach

We chose 44 Chinese property insurance companies as research objects. The data were obtained from the Chinese Insurance Yearbook and China Statistical Yearbook 2015–2017. First, the data envelopment analysis (DEA) method was used to calculate the technical efficiency of property insurance companies. Then, Tobit regression and quantile regression were adopted to explore the influencing factors of technical efficiency. Finally, the fuzzy-set qualitative comparative analysis (fsQCA) method was employed to summarize the path to improving the operating efficiency of property insurance companies.

Findings

The empirical results in the first stage suggested that the operation efficiency of China's property insurance industry was technically inefficient, and the scale efficiency was relatively better than the pure technical efficiency. In the second stage, we observed that the drivers for firm size, reinsurance rate, claim ratio and equity restriction were important determinants of an insurance firm's efficiency.

Research limitations/implications

We also put forward four applicable, targeted and proven ways to improve the technical efficiency of property insurance companies. These configurations are verified by cases of existing property insurance companies, which can provide practical references for the insurance industry.

Originality/value

Our research enriches the insurance literature and efficiency methods, particularly regarding the specific paths of improving the technical efficiency. The relationship between elements and results is analyzed from a systematic perspective, and the research results are not only more consistent with what logic might imply but also more instructive for the improvement of reality.

Keywords

Citation

Li, Z., Li, Y. and Long, D. (2020), "Research on the improvement of technical efficiency of China's property insurance industry: a fuzzy-set qualitative comparative analysis", International Journal of Emerging Markets, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJOEM-01-2020-0091

Publisher

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Emerald Publishing Limited

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