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

See all articles by Kaoru Tone

Kaoru Tone

National Graduate Institute for Policy Studies (GRIPS)

Biresh Sahoo

Xavier Institute of Management

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

Tone, Kaoru and Sahoo, Biresh K., Examining Productive Performance of Life Insurance Corporation of India (May 6, 2017). 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, Available at SSRN: https://ssrn.com/abstract=2980603

Kaoru Tone

National Graduate Institute for Policy Studies (GRIPS) ( email )

7-22-1 Roppongi, Minato-Ku
Tokyo 106-8677, Tokyo 106-8677
Japan

Biresh K. Sahoo (Contact Author)

Xavier Institute of Management ( email )

Xavier Square
Bhubaneswar, 751 013
India
+91 674 6647 735 (Phone)

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