Productivity Growth Assessment of Public and Private Sector General Insurance Companies in India: A Malmquist Index Approach

Productivity Growth Assessment of Public and Private Sector General Insurance Companies in India: A Malmquist Index Approach

Abhijit Sinha (Vidyasagar University, Midnapore, India)
DOI: 10.4018/IJAMSE.2016070103
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Abstract

The researcher in this paper has looked into the general insurance industry in India opening up of the sector to the private players in 2000. The objective of the study is to determine the total factor productivity growth in the general insurance industry in India. The study is based on the analysis of data covering twelve general insurers (including four from the public sector) for the period 2004-05 to 2011-12. For the purpose of growth assessment, Malmquist Index is computed that is composed of two components: Technical progress and technological progress. From the study, it is observed that a high level of inconsistency exists in the industry. The overall growth during the study period has been minimal. The technological change shows a negative growth in the case of all the insurers. Whatever growth is observed is due to the efficiency improvement, thereby implying movement towards the frontier.
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Literature Review

Insurance studies are popular among researchers and there are different studies across the world that has looked into different aspects of the industry. An idea of the researches already undertaken is highlighted as follows.

The studies on factor productivity growth using Malmquist index has been quite popular among researchers. Some of the research papers that applied the measure include those of Asai et. al. (2007), Barros et al. (2005), Chen et al. (2007), Kamau (2011), Mahmood et al. (2008) and Saad (2012).

However, a few researchers, viz. Arjomandi et al. (2011) and Balcombe et al. applied the bootstrapping procedure in the case of productivity growth measurement which used an iteration technique to arrive at the results.

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