Analysis Of The Operational Efficiency Of Chinese Life Insurance Industry

As the core issue of economics, efficiency not only has a direct impact on the allocation and the use of scarce resources, but also it is the concentrated expression of the industry core competitiveness. Since 1982, China resumed the running of Life insurance industry, Chinese Life insurance industry has made remarkable achievements:the number of life insurance companies increases quickly, the premium scale keeps expanding, a wide variety of life insurance products appears, and the basic social-economic functions of the life insurance industry continuously enhanced. In the process of economic development of society, Chinese Life insurance industry provide a pivotal role.With the further opening up of Chinese life insurance market as well as the impact of financial crisis and the spread of the global economy in recession, the life insurance industry operating environment has undergone radical change. How can we improve the operating capacity and comprehensive competition ability and to further promote the sustainable development of Chinese life insurance industry, this is the most important issue for Chinese life insurance industry.This article is divided into six chapters, we use the combination method of theoretical research and empirical research on the research of operational efficiency of Chinese life insurance industry. First, we introduce the economical definitions of efficiency, taking into account the special process of the insurance industry, we get the definition of insurance efficiency. Second, we use an Resources under Restriction Two-stage Data Envelopment Analysis to compute the operating efficiency of the representative domestic life insurance companies. Subsequently, we selected factors which may impact the operating efficiency, and use the Tobit analysis to determine the influential factors.At last, we combine the status quo of Chinese life insurance industry and the empirical results, provide suggestions to enhance the operational efficiency of Chinese life insurance company.Compared to other domestic and international research, this paper has three possible innovations:First, expanding the definition of operational efficiency of the insurance company. We start from the particularity of the insurance company’s business process, renew the definition of insurance operational efficiency. Second, we expand the classical DEA model. In this paper, we learn from Huang Wei (2009), drawing on the Resource-Restriction Two-Stage DEA model to compute the operational efficiency of Chinese life insurance company, we decide the input variables which life insurance companies invested in the early stage of the whole operation as a shared investment, then it will be better to get close to the reality of life insurance company. Third, in this paper, we have a strict model set in order to exclude the possibility of pseudo-efficiency. In the model set, we require that only if each sub-stage process is efficient, the overall process is efficient, that is to say each sub-stage efficiency value is 1, the overall operational process’s efficiency value is 1.