Nonparametric frontier analysis models for efficiency evaluation in insurance industry: a case study of Iranian insurance market

摘要

Performance evaluation and efficiency analysis is considered to be one of the critical responsibilities of the management department. This paper investigates and assesses the efficiency and performance of Iranian insurance companies through nonparametric frontier analysis (FA) models. The two well-known nonparametric FA models, data envelopment analysis (DEA) and free disposal hull, are utilized to separate the efficient companies from the inefficient companies, and two well-known super-efficiency analysis models are utilized to rank the efficient units. For the further analysis, critical inputs are also identified for inefficient companies using DEA sensitivity analysis which is a powerful tool for planning performance improvement project, and the reference sets are also identified as the benchmark pattern for each inefficient unit. Managerial insights and implications of the study are discussed finally.