The Evaluation Of Cost&Profits Efficiency Of Chinese Property Insurance Company Based On The SFA Methord

The issue of efficiency is one of the core problems in the economic study today. The efficiency which embodies the property insurance company’s market competition, input-output ability and sustainabe development is the all effective resource allocation. In the trend of financial globalization, every Chinese insurance companies are not only facing the domestic competition, but also the challenges from foreign industry. While the competitiveness of insurance company depends largely on insurance company’s operation efficiency. Therefore to improve the competitiveness of Chinese insurance industry, they must pay more attention to efficiency. Thus how to improve insurance company’s operation more faster in order to make themselves become more powerful is particularly important.Based on the current operation status of chinese property insurance company, combining with the related research achievements in domestic and foreign, this paper introduces the cnnotation and research methods about efficiency. With the Stochastic Frontier Approach (SFA) methord, this paper evaluates the cost efficiency and profit efficiency of Chinese18property insurance companies over the period from2004to2009, and analyses its determinants. Meanwhile based on the calculated result of Frontier4.1program it analyzes the different efficiency between domestic and foreign, and its deep reasons, finally gives the corresponding suggestions. The results show that:Firstly, high profit efficiency brings high cost efficiency, which embodies the cost efficiency and profits efficiency exist correlation. The cost and profits efficiency of Chinese insurance company are more than that of foreign company, which also are going up steadily. In addition, the efficient gap betreem homes and foreign is becoming narrow.Secondly, the market share, car insurance business scale, premium using ability and premium per employee have significantly positive effect on both cost efficiency and profit efficiency. While the total assets profit margins has negative influence on cost efficiency, but is just the opposite for profit efficiency.