Determining the Comparative Efficient Units of Insurance Industries Through DEA

This paper employs data envelopment analysis to determine the comparative efficient units of twenty-eight life insurance companies in Taiwan. Estimated results show that nine life insurance companies are relatively efficient. We then identity the frequency of the reference set of efficient companies to single out the most efficient life insurance company. We further analyze dual weights and the key leader and examine local economics of scale to indicate ways to remedy the remaining nineteen inefficient insurance companies. These results will enable inefficient companies to identify their main competitive opponent to each inefficient company in Taiwan and clarify marketing and cost strategies for the future.