An empirical study of cost efficiency in the Irish life insurance industry.

Hwang, Tienyu; Gao, Simon S

Abstract

Contemporary studies of cost efficiency in the insurance industry have predominantly focused on large economies. This paper investigates scale economies and cost efficiency in the Irish life insurance industry by using the translog cost function and distribution-free method. Increasing returns to scale are found in the industry but the magnitude of cost economies varies with firm size. This study indicates that firms with larger market shares are more likely to exhibit cost efficiency. Furthermore, this study shows that bancassurance firms are more cost efficient than other types of insurers in the Irish life insurance industry, which provides new insights into the cost efficiency of bancassurance

Citation

Hwang, T., & Gao, S. S. (2005). An empirical study of cost efficiency in the Irish life insurance industry. International journal of accounting, auditing and performance evaluation, 2, 264-280. https://doi.org/10.1504/IJAAPE.2005.007675

• Journal Article Type: Article
• Publication Date: Sep 1, 2005
• Deposit Date: Feb 26, 2008
• Print ISSN: 1740-8008
• Electronic ISSN: 1740-8016
• Publisher: Inderscience
• Peer Reviewed: Peer Reviewed
• Volume: 2
• Pages: 264-280
• DOI: https://doi.org/10.1504/IJAAPE.2005.007675
• Keywords: accounting; finance; Life insurance industry; Ireland; cost efficiency; scale economy; bancassurance
• Public URL: http://researchrepository.napier.ac.uk/id/eprint/2114
• Publisher URL: http://dx.doi.org/10.1504/IJAAPE.2005.007675