ECONOMIC EFFICIENCY OF INSURANCE COMPANIES: CROSS-COUNTRY COMPARISON OF PRODUCTIVITY GROWTH
ECONOMIC EFFICIENCY OF INSURANCE COMPANIES: CROSS-COUNTRY COMPARISON OF PRODUCTIVITY GROWTH

Summary/Abstract: This paper focuses on the economic efficiency of the insurance companies in Croatia, Serbia, and Slovenia. Data Envelopment Analysis (DEA) is used to examine the contributions of technical and economic efficiency change to the productivity growth in the insurance industries of these countries by applying the generalized output-oriented Malmquist index for the 2014-2015 period. The output-input data consists of a panel of 19 insurance firms in Serbia, 23 insurance companies in Croatia and 13 Slovenian companies chosen as the sample of the study. The study utilizes four inputs and two outputs: commission and management costs, stock capital and labor force, as well as premium and net investment income, respectively. The efficiency is measured using the Malmquist index which can be decomposed into two components: the efficiency change index and the technical change index. The results have shown that up to 50% of Croatian and Slovenian companies are efficient, compared to 30% of Serbian companies.

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