| China's non-life insurance industry has been recovered since 1979 and has made a huge progress over the past 40 years.However,it is an indisputable fact that the efficiency and competitiveness in China's non-life insurance industry are relatively low.In August 2016,the China Insurance Regulatory Commission(CIRC)issued the '13th Five-Year Plan for the Development of China's Insurance Industry' and pointed out the importance of supply-side reform driven by the innovation to stimulate the underwriting quality and the efficiency in China's insurance companies as well as the improvement of services to win a world-wide recognition.The term 'efficiency' is mentioned in the Plan for many times,which indicates that it is still necessary to study the efficiency in China's non-life insurance companies.However,although there are many related types of research on the efficiency in China's non-life insurance companies,they only focus on the comparative analysis on Chinese-funded and foreign-funded insurance companies.The analysis on the efficiency in China and a foreign country's insurance companies is insufficient.As we may know,under the background of 'One Belt,One Road' initiative,speeding up the 'going out' strategy and simulating the investment on foreign countries to realise the upgrade of the 'commodity output'to 'capital output' has become the way for China's economic transformation.Therefore,China's insurance industries should improve their efficiency quickly in order to compete with the world's best insurance companies and survive in international markets.Throughout the historical development of insurance industries in many countries around the world,Australian insurance industry is much similar with Chinese industry,comparing with other well-developed insurance industries in the UK and USA.Additionally,under the background of'One Belt,One Road' initiative,China and Australia have a closer economic relationship and cultural exchange opportunities.China's insurance companies are more likely to go abroad,cooperate with Australian insurance companies,and even invest in Australian insurance market.Based on the above reasons,taking into account that China's non-life insurance companies need to enhance their management skills,improve the efficiency to compete with the Australian insurance companies,this thesis compares China and Australian non-life insurance companies to find the efficiency gap between them and focus on improvement techniques.This study not only improves the efficiency in all China's non-life insurance companies but also makes them ready to enter the foreign insurance markets.This thesis aims at finding the reasons for efficiency loss,changing trends in efficiency,efficiency improvement techniques,and the unique operation strengths and weakness of the China's non-life insurance companies by comparing the changes in efficiency in 31 China and Australian non-life insurance companies between 2011 and 2015.Specifically,from the macroscopic analysis point of view,by dividing the efficiency into the technical efficiency,the pure technical efficiency,and the scale efficiency,we can find out that whether the efficiency loss in China's none-life insurance industry dues to the technical inefficiency or scale inefficiency.In addition,by calculating the change in the total factor productivity(TFP)in two countries' non-life insurance companies and decomposing the TFP into the technical efficiency changes and the technological progress,we can not only find the prodictivity in both countries' non-life insurance companies but also analyse the reasons for the changes that may due to the'catching-up effects' caused by the improvement of the technical efficiency or the movement of Production Possibility Frontier(PPF)caused by the technological progress.However,all the macroscopic analysis is inseparable from the microscopic analysis of 31 companies to calculate the efficiency.The efficiency results in each company also enable the investors and the managers to have a more comprehensive understanding of their companies.This thesis also gives an empirical study on the determinants of the efficiency and finds the internal and external factors that affect the efficiency in China and Australia non-life insurance companies.The thesis is organised as follows.The first chapter is the introduction part that mainly introduces the research background,purpose of this research,literature review,and innovation and limitations of this thesis.The second chapter is the theory of efficiency and efficiency measurements.This chapter describes the output-oriented and the input-oriented measurement in details,explains the principle of BCC,CCR,and Malmquist index and finally tells how to choose the models that are suitable for this research.The third chapter is the empirical study part,including how to choose sample companies in each country,data sources,measurement of input and output variables,and empirical results.The fourth chapter discusses the determinants of the efficiency in non-life insurance companies through Tobit model.The last chapter of this thesis concludes.Overall,this study has the following findings:First,the technical efficiency in China's non-life insurance companies was lower than the Australian companies during 2011 to 2013 but the gap between the two countries in 2014 was slowly narrowing.In 2015,China's non-life insurance companies performed better in the technical efficiency.Second,similar to the findings in the technical efficiency part,before 2015,the gap in pure efficiency between China and Australian non-life insurance companies was very large but the pure technical efficiency was increasing in most of China's non-life insurance companies,especially those small and medium-sized companies.Third,in terms of the scale efficiency,China's none-life insurance companies performed well except for the two very large companies,PICC and Pin'an Property insurance company,which lost the efficiency dues to their large size.Besides,the gap in the scale efficiency between Australian non-life insurance companies was relatively larger than in China's companies.Fourth,the Total Factor Productivity(TFP)in China's non-life insurance industry has steadily increased in the past five years,which mainly dues to the improvement of the efficiency in China's non-life insurance companies but in some years,the technological progress in China's non-life insurance industry has been restricted.Thus,it is important to enhance the technology and rely on the R&D and innovation to drive the high productivity.In Australia,the decrease of the efficiency in non-life insurance companies is the main reason for their stagnant growth in TFP.Finally,this thesis introduces the internal and external determinants that affect the efficiency in China and Australian non-life insurance companies.This study finds that economic growth rate and interest rate are the external determinants that have positive impacts on the efficiency in non-life insurance companies,while H index,which represents the monopoly power of insurance industries has a negative impact.For internal determinants,the market share positively affects the efficiency and the efficiency in state-owned non-life insurance companies is lower than in non state-owned companies.Additionally,the improvement of underwriting profits ratio and the investment income ratio,as well as the reduction of the operating expense ratio,are also useful ways to strengthen insurance companies' management skills and improve the efficiency. |
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