Evaluating traditional, dynamic and network business models: An efficiency-based study of Chinese insurance companies

Nourani, Mohammad and Kweh, Qian Long and Ting, Irene Wei Kiong and Lu, Wen-Min and Strutt, Anna (2022) Evaluating traditional, dynamic and network business models: An efficiency-based study of Chinese insurance companies. Geneva Papers on Risk and Insurance: Issues and Practice, 47 (4). pp. 905-943. ISSN 1018-5895. (Published)

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Data envelopment analysis (DEA) is extensively adopted to evaluate the relative efficiencies of a group of insurance companies from a multidimensional perspective. Selecting an appropriate DEA framework for insurance businesses, however, remains ambiguous. We use the slack-based measure (SBM) models in DEA to evaluate insurance efficiencies from four perspectives, namely, SBM, network SBM (NSBM), dynamic SBM (DSBM), and dynamic network SBM (DNSBM) frameworks. We present the applicability of DEA to 32 unique companies operating in the Chinese insurance industry over the sample period 2014–2018. Through analyses, we highlight key DEA results and related constraints in reaching the most appropriate performance benchmarks for evaluating insurance companies’ efficiencies. We find that building a network structure for insurance efficiency evaluation is necessary because of the superiority of NSBM and DNSBM results over those of the conventional SBM and DSBM models. After including dynamic effects, we find consistent results in the divisional and overall efficiencies. Overall, this study provides insight for insurance companies to implement more efficient and effective ways to evaluate their performances in terms of profitability and investment in a challenging business environment.

Item Type: Article
Additional Information: Indexed by Scopus
Uncontrolled Keywords: Business model; Data envelopment analysis; Dynamic model; Efficiency; Insurance; Network model
Subjects: H Social Sciences > HG Finance
Faculty/Division: Faculty of Industrial Management
Depositing User: Dr. Irene Ting Wei Kiong
Date Deposited: 13 Mar 2023 02:38
Last Modified: 13 Mar 2023 02:38
URI: http://umpir.ump.edu.my/id/eprint/36648
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