The Application Of The Distribution Free Approach Of Efficiency Frontier Analysis In Our Countries' Insurance Companies

With the shareholding system reforming of state-owned insurance companies and the emergence of small and medium insurance companies in the process of reforming and development of insurance industry in our country, the efficiency of insurance companies has been become the highlights in the fields of theory, practice and regulatory authority.The study of efficiency in commercial insurances involves three aspects:Scale-efficiency, Scope-efficiency and X-efficiency,recently X-efficiency has become the focus of both internal and external researchers.Under this background,this paper analyzes three major problems, as following:the first one is current situation of insurance companies'X-efficiency in our country;the second is which primary factors have had the influence to the insurance company's X-efficiency;the third is how to improve the X-efficiency of insurance companies.This paper gives an empirical study of the X-efficiency in both state-owned and stock-shared commercial insurances of China by applying the Distribution Free Approach which is one kind of parametric frontier analysis. It then analyzes the relativeness between X-efficiency and some internal, external factors. Based on the financial theory of efficiency, this paper expects to provide some references for the improvement of efficiency in our commercial insurances. The structure of this article includes: firstly, giving a brief definition of the X-efficiency theory and theoretical explaination to some ralavant fators; secondly, analyzing the relativeness between X-efficiency and some internal, external factors; in the end, giving some suggestion on the strategies and tactics to improve the X-efficiency of insurance companies in our country.By carrying on the theoretical and the empirical analysis to 16 samples,we can find:Some macroecomic and microeconomic factors have significant effect on insurance company's X-efficiency.For that we find the methods of improving X-efficiency based on economic theory and financial efficiency theory,this provides references of theory and policies to improving insurance company's X-efficiency.