Estimating Revenue Efficiency in Indian General Insurance Companies: A Semi-parametric Econometric Approach
Journal Title: Journal of Operational and Strategic Analytics - Year 2024, Vol 2, Issue 1
Abstract
In the realm of general insurance in India, an econometric investigation was conducted to estimate the revenue efficiency across a selection of 15 prominent, diversified general insurance entities for the fiscal years 2011-12 to 2016-17. Utilizing a semi-parametric methodology, the revenue frontier was constructed under the GAM framework, while the variance components were estimated employing the method of moments. This analysis further explored the influence of revenue efficiency on critical profitability metrics, namely return on equity (ROE) and return on assets (ROA), through the application of instrumental variable regression. The findings provide pivotal insights into the dynamics of revenue efficiency and its consequential impact on the financial performance of general insurance companies in India, offering a substantial contribution to the literature on insurance economics and the methodology of efficiency measurement. The research underscores the significance of adopting semi-parametric models for a nuanced understanding of revenue efficiency, thus paving the way for enhanced strategic decision-making in the insurance sector.
Authors and Affiliations
Ram Pratap Sinha
Keywords
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- EP ID EP742276
- DOI 10.56578/josa020104
- Views 28
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