| The issue of efficiency is eternal theme of Economies. As far as life insurance companies concerned, the efficiency of fund use is that using combination of insurance resources and try to make the resources to produce max of products and achieve efficient frontier. It is the generic term of input-and-output ability, competitive ability of market, the ability of sustainable development. With the fierce competition of the market, to improve the competitiveness of the company not only helps to promote the sustainable development of China’s insurance industry, but also contribute to the oversight of insurance regulatory. Thus, it is necessary studying on the efficiency of fund use in life insurance companies.In this paper, I started my research from status of China’s insurance fund. With the help of the two-stage DEA model, a detailed assessment of insurers’investment efficiency is analyzed. The study found:the usage of insurance funds of China relatively lacks efficiency while the efficiency of fund-raising stage was slightly higher than the efficiency of the investment phase. The low related coefficient between the fund-raising stage and the investment phase means a large proportion of resources waste. Studied a sample of companies, only Ping An Life has been in the production frontier surface. The rest of the companies are efficiency imperfects. China Life, Taikang Life and other old-funded life insurance companies are still in leading position of the market, but foreign life insurance companies, like the United Kingdom Life, have more efficiency in the investment phase, and have faster business growth. The overall efficiency of Chinese-funded life insurance companies is slightly higher than the foreign life insurance companies, but while the efficiency in fund-raising phase are higher than foreign life insurance companies, the one in the investment stage efficiency is slightly lower. Scale efficiency had continued growth before2007, but the last two years has declined as the result of the negative impact of large-scale expansion of life insurance companies.This paper then built a Tobit model to analyze influencing factors of efficiency. The conclusion is that the product structure, the operating expenses, capital adequacy ratio has a negative influence on efficiency, and company scale expansion, capacity of capital operation, capital property has a positive influence on efficiency. At last, the paper gives some policies about how to improve the efficiency of China insurance industry. Life insurance companies should increase in premium income and expand the market share of life insurance companies. The regulatory authorities of the life insurance companies should broaden insurance investment channels and strengthen the supervision of the insurance funds operations. |
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