Summary
To identify likely gainers and losers and to examine the effects of increasing competition on the structure of the Taiwan life insurance industry, the cost efficiency of Taiwan life insurance companies is analyzed. A flexible stochastic cost frontier is estimated for the industry using a sample of 25 firms over six years. The estimated frontier is then used to compute measures of economic, scale, and total efficiency for different company size groups. The results show that, on average, larger life insurance companies are more efficient than smaller companies, but there are substantial variations in the degree of efficiency within size groups.
See the full content of this document
Extract
Measuring Cost Efficiency in the Taiwan Life Insurance Industry
Introduction
The Taiwan life insurance industry consists of many companies of different sizes, each supplying a range of products, under the general headings of life insurance, pensions, annuities, and permanent health insurance. Like the rest of the financial service sector, the industry has been operating in an increasing competitive domestic and international environment. Several factors have brought this about: various regulatory changes within the Taiwan; and the gradual arrival of bane assurance. Recent research suggests that economies of scale exist in the industry, and with such an intensification of competitive pressures, ...See the full content of this document
Sponsored links
