Under Pressure: How the Business Environment Affects Productivity and Efficiency of European Life Insurance Companies
Journal
European Journal of Operational Research
ISSN
0377-2217
ISSN-Digital
1872-6860
Type
journal article
Date Issued
2017-05
Author(s)
Abstract
Deregulation and widespread economic changes have fundamentally affected the business environment of European life insurance companies over the last decades. We apply multi-stage data envelopment analysis to identify the impact of the changing environment on productivity and efficiency of European life insurance companies. Considering a sample of 970 life insurance companies from 14 European countries, we show that general economic, capital market, and insurance market conditions are important drivers of efficiency. Although we find no technical change in the European life insurance sector, we nonetheless observe an efficiency increase in 2002–2013 that leads to an increase in total factor productivity; these trends can be explained by more challenging business conditions in the 2000s. Our results emphasize the need to control for the business environment in cross-country efficiency studies.
Language
English
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Elsevier
Publisher place
Amsterdam
Volume
258
Number
3
Start page
1082
End page
1094
Eprints ID
249154