Efficiency of Indian Private Non-Life Insurance Firms using Stochastic Frontier Analysis

Abstract

Abstract: The purpose of this paper is to measure the relative efficiency of non-life insurance companies in India from 2008 to 2013 by using Stochastic Frontier Analysis. It is found that BharatiAXA is at rank one and it has a relative efficiency score higher than all other companies. Since γ = 0.9251 which is close to one indicates that all the residual variations are due to the inefficiency effects. It is also found that the mean of efficiency score of non-life insurance companies is increasing from year to year. Keywords: Efficiency, stochastic frontier analysis, Non-life insurance