Influence of selected environmental factors on the efficiency of commercial insurers
Influence of selected environmental factors on the efficiency of commercial insurers

Author(s): Eva Grmanová, Peter Hošták
Subject(s): Energy and Environmental Studies, Financial Markets, Socio-Economic Research
Published by: Masarykova univerzita nakladatelství
Keywords: environmental factors; efficiency; insurance companies;
Summary/Abstract: Paper aims to analyze the specifics of the efficiency of Czech and Slovak commercial insurers arising from the impact of environmental factors. Models of data envelopment analysis (DEA) are used to analyze the efficiency of insurance companies. Efficiency is evaluated based on the efficiency score. DEA models allow for the evaluation of factors which in the short term are not under the influence of the analyzed entities. These are called environmental factors. Impact of environmental factors is studied based on an approach proposed by Charnes, Cooper and Rhodes (1981). This procedure divides the analyzed subjects into and in each subgroup efficiency scores are determined. Target values corresponding to the full efficiency are calculated for inefficient subjects. In the next step the efficiency score is expressed on the basis of above mentioned target values and a statistical hypothesis testing is used to determine the statistical significance of the difference between the efficiency scores in groups. This approach allows to compare differences in the efficiency of various groups of insurance companies.

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