Efficiency comparison of selected OECD life insurance markets using a three-stage DEA

Abstract

This paper compares the efficiency of 12 selected OECD life insurance markets from 2013 to 2019 through the three-stage DEA model, identifies ways to improve the efficiency of the potentially inefficient insurance markets, and determines how environmental factors influence the efficiency score. The major contribution of this paper is that, by using the three-stage DEA model and eliminating the impact of environmental factors on efficiency, the results are more accurate than those of previous studies. We find that the environmental factors have little effect on the German, Irish, and Italian life insurance markets, which perform well. However, after removing the influ-ence of environmental factors, the technical efficiency of the Belgian, Greek, and Hungarian markets decreases signifi- cantly.