Performance of Malaysian insurance companies using data envelopment analysis

Bao, Ng Jia and Rohaizan, Ramlan and Fazeeda, Mohamad and Azlina, Md Yassin (2018) Performance of Malaysian insurance companies using data envelopment analysis. Indonesian Journal of Electrical Engineering and Computer Science, 11 (3). pp. 1147-1151. ISSN 2502-4752. (Published)

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The purpose of this study is to evaluate the performance of the local insurance in Malaysia for the period 2014-2015. The major challenge in the insurance industry is increasing competition in this market. Besides that, problematic in performance measurement to evaluate performance is another challenge in insurance industry. 24 local insurance companies involved in this study using quantitative method of Data Envelopment Analysis (DEA) output-orientation CCR model. This study utilizes three inputs and three outputs; operating expenses, equity capital and commission as well as net premium, net investment income, and net incurred claim. The secondary data sources were derived from official data of local insurance companies’ annual report respectively. The DEA-Solver-LV version 8 tools were used to analyze the data that have been collected to evaluate the performance of local insurance company. This DEA model allows integration of the performance for the insurance companies and provides management overall performance evaluation. The results showed that there are 8 efficient companies in 2014 and 9 efficient companies in 2015. The average efficiency score in 2014 was increased from 78.9% to 79.1% in 2015. The findings from this study will benefit the insurance associations in Malaysia, management of insurances companies and policy makers.

Item Type: Article
Additional Information: Indexed by Scopus
Uncontrolled Keywords: Data Envelopment Analysis (DEA); Local insurances companies; Performance measurement
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HG Finance
Faculty/Division: Faculty of Industrial Management
Depositing User: Mrs Norsaini Abdul Samat
Date Deposited: 07 Nov 2022 08:32
Last Modified: 07 Nov 2022 08:32
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