Title: A new assessment approach of technical efficiency and productivity in European non-life insurance companies

Authors: Bilel Jarraya; Abdelfettah Bouri

Addresses: Department of Management, Sousse University, IHEC Sousse, Road of Hzamia Sahloul 3 - BP n 40 - 4054, Sousse, Tunisia ' Economics and Management Faculty, Sfax University, Airport Road, KM 4.5, LP 1088, Sfax 3018, Tunisia

Abstract: This study intends to improve the recognised literature on insurance sector productivity based on the directional output distance function and Luenberger indicators. In addition to the estimation of efficiency scores and decomposition of productivity change, we have tried to detect the bias attributed to each production factor. We have used a sample of European non-life insurance companies to apply our model. The results show that the average technical efficiency score of European non-life insurance companies is 77.45%. The Luenberger indicators show that decline in productivity is principally owing to a significant drop in technological change rather than the progress in efficiency change. Finally, from the factor bias indicator we developed, we show a considerable improvement in technological change of input and desirable output. However, a strike deterioration is marked on undesirable output bias.

Keywords: technical efficiency; productivity change; efficiency change; technical change; directional output distance function; factors biases; non-life insurance industry; Europe; Luenberger indicators; technological change; strike deterioration.

DOI: 10.1504/IJMFA.2015.074901

International Journal of Managerial and Financial Accounting, 2015 Vol.7 No.3/4, pp.217 - 234

Received: 12 Jun 2015
Accepted: 03 Dec 2015
Published online: 23 Feb 2016 *

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