This study gauges and analyzes the total factor productivity of the life insurance firms operating in Korea over the years 1996 and 1997. The mathematical programming methods are employed to measure the Malmquist productivity index, which is further decomposed into the technical change and catch-up effect. This study also tests the robustness of the results with respect to different definition of life insurance outputs. The output measurement consists of three different output combinations: (1) premium income and invested assets, (2) paid losses and reserves, and (3) number of insurance contracts. All performance indexes, including year-by-year technical efficiency, cross technical efficiency, catch-up effect, frontier change, and the Malmquist indexes, are estimated with these different output combinations. During the sample period, the life insurance industry has slightly improved its productive technology. The overall results imply that the estimates are not noticeably sensitive to different output measurement.
Ⅰ. Introduction
Ⅱ. Methodology
Ⅲ. Measurement of Insurance Output and Input
Ⅳ. Empirical Results
Ⅴ. Summary and Conclusions
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