Comparing the technical efficiency of insurance companies using parametric and nonparametric methods: The case in Iran

The insurance industry as financial institutions and services have very important role in the economy of any country one of the problems of developing are faced, is low efficiency. The purpose of this paper is to compare the technical efficiency of insurance companies by using two methods to measure efficiency, are non-parametric (DEA) and parametric (SFA).To measure technical efficiency is used from data 14 the insurance companies in the period 2008 to 2012. The results of both methods measuring showed, the average technical efficiency of all the firms is 0.74, However,there are many differences in the technical efficiency of firms in each of these five years, how annual , also a difference in the ranking between them. To compare technical efficiency between the two methods for parametric and nonparametric tests, we use from the T-Test, the results indicated that there are not any significant differences between the two methods measuring technical efficiency of insurance companies.

Keywords:

Technical efficiency , insurance companies , DEA , SFA