Product diversification versus technical efficiency of conglomerate life microinsurance companies

evidence from India

Basri Savitha, Subrato Banerjee, Ankitha Shetty

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

We look at technical efficiency and productivity changes in the life microinsurance (LMI) portfolio of insurance companies in India. The central objective is to empirically examine the ‘tug of war’ between efficiency and product diversity in the Indian insurance market. The data used in this research is available in the Handbook on Indian Insurance Statistics (Insurance Regulatory and Development Authority of India). First, we emphasise that four-fifths of LMI insurers in our sample were technically inefficient. Second, through the use of the data envelopment approach (DEA), Malmquist total factor productivity index (MTFP), and Tobit regression analyses, we demonstrate that insurers could improve managerial ability by organising inputs in the production process more effectively. Finally, we provide empirical support for the strategic focus hypothesis by demonstrating that product diversification has adverse effects on the technical efficiency of insurers.

Original languageEnglish
Pages (from-to)527-547
Number of pages21
JournalGeneva Papers on Risk and Insurance: Issues and Practice
Volume44
Issue number3
DOIs
Publication statusPublished - 01-07-2019
Externally publishedYes

Fingerprint

Conglomerate
Insurer
India
Microinsurance
Product diversification
Technical efficiency
Insurance
Insurance market
Product diversity
Malmquist
Statistics
Organizing
Efficiency change
Authority
Productivity change
Managerial ability
Total factor productivity
Production process
Insurance companies
Productivity index

All Science Journal Classification (ASJC) codes

  • Accounting
  • Business, Management and Accounting(all)
  • Finance
  • Economics and Econometrics

Cite this

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Product diversification versus technical efficiency of conglomerate life microinsurance companies : evidence from India. / Savitha, Basri; Banerjee, Subrato; Shetty, Ankitha.

In: Geneva Papers on Risk and Insurance: Issues and Practice, Vol. 44, No. 3, 01.07.2019, p. 527-547.

Research output: Contribution to journalArticle

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