Efficiency Analysis of Private Life Insurance Companies in India: Analysis based on DEA Model

Abstract

This paper explores the efficiency of private life insurance companies in India. After the privatisation of the insurance sector at present, i.e. in 2024, a total of 23 private life insurance companies entered India's life insurance market. So, under this circumstance, it is high time to judge the efficiency of India's private life insurance companies. How efficiently do private life insurance companies manage the insurance sector?

DEA was employed in the study to gauge the technical proficiency of Indian life insurance providers, and correlation coefficient analysis was used to establish a relationship between inputs and outputs.

Technical efficiency (TE), pure technical efficiency (PTE), and scale efficiency (SE) are measured by using DEA. To break tie position super efficiency DEA method used in next stage.

The data used in this study, which spans the last ten years from 2013-14 to 2022-23, was entirely secondary and was gathered from the IRDA official website.

Results show that the following private life insurance companies that is ABSLIC, CHSBCOLIC, HDFCLIC, ICICIPLIC, KMLIC, MXLIC, and SBILIC, are the most private life insurance-efficient companies and the TE score, PTE score, and SE score of all the above private life insurers is 1.

The most effective private life insurance provider is SBILIC, according to research.