Abstract
Life insurance is a very important segment of the economy of most countries as demonstrated by the investments, premium revenue and numbers employed. Hence, it is paramount to determine accurately how well life insurance companies (LICs) perform and how viable they are for the benefit of both other industries and national economies.Three papers that investigate LIC efficiency directly analyze how efficiency affects LIC profits. One critical feature is that they show that the inefficiency of LICs can greatly affect their (financial) outcome and ultimately their survivorship. Thus, said research clearly indicates that life insurer efficiency is a crucial area to investigate and assess and that it could greatly enhance the ability to properly monitor and inspect the life insurers.This article co-ordinates information regarding life insurance efficiency studies to help researchers learn which approaches, methods and output/input proxies to use. While some papers do so for some of the aspects that are important and necessary for life insurance efficiency studies, this is the first to deal with said aspects together. More specifically, this paper especially considers and evaluates the different methods and output proxies used in life insurance efficiency studies, as they seem to be the elements where the most disagreement exists between researchers. In addition, this article is unique in examining how input (proxy) prices are used in life insurance efficiency studies.
Highlights
The role of the financial sector in the economic development of any country is very significant (Janjua & Akmal, 2015)
This paper especially considers and evaluates the different methods and output proxies used in life insurance efficiency studies, as they seem to be the elements where the most disagreement exists between researchers
This article is unique in examining how input prices are used in life insurance efficiency studies
Summary
The role of the financial sector in the economic development of any country is very significant (Janjua & Akmal, 2015). An insurer bankruptcy can have a ruinous effect on its policyholders, in the United States in 2015, more because they have nothing to show for their than 2.5 million people worked in the life insur- paid premiums due to the product of a LIC being ance industry (ACLI, 2016) and in Europe in 2015, a promise for future payment. The majority of life insurance efficiency age salary in finance, insurance and real estate and articles adopt a very narrow set of input proxies business services sector available from the Ministry as compared to this list, a lack of precision which of Saudi Labor (Jedidia & Medhioub, 2015), 2) the seems to decrease the validity of their results. Of per capita wage from the Wind Datafeed Service the papers perused, only twenty-four percent use database (Liu, 2015), 3) the wage rate for the state more than three input proxies which is deficient, where the home office is located (for administraas it seems best to endeavor to use as detailed list tive labor) (Grace et al, 2014), 4) the annual wage of inputs as is feasible
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