Examining Productive Performance of Life Insurance Corporation of India
Tone, K. and Sahoo, B. K. (2017) Examining Productive Performance of Life Insurance Corporation of India. In K. Tone (ed.) Advances in DEA Theory and Applications: With Extensions to Forecasting Models (Chapter 13, pp. 119-140), John Wiley & Sons Ltd., U.K. ISBN: 978-1-118-94562-9, DOI: 10.1002/9781
Posted: 7 Jun 2017
Date Written: May 6, 2017
Abstract
This chapter applies a new variant of the data envelopment analysis model to examine the performance of Life Insurance Corporation (LIC) of India. The findings show a significant heterogeneity in the cost efficiency scores over the course of 19 years. A decline in performance after 1994–1995 can be taken as evidence of increasing allocative inefficiencies arising from the huge initial fixed cost undertaken by LIC in modernizing its operations. A significant increase in cost efficiency in 2000–2001 is, however, cause for optimism that LIC may now be realizing a benefit from such modernization. This will stand the corporation in good stead in terms of future competition. Results from a sensitivity analysis are in broad agreement with the main findings of this study.
Keywords: Life Insurance Corporation of India (LIC), DEA, technical efficiency, returns to scale, economies of scale
JEL Classification: D24
Suggested Citation: Suggested Citation