The estimation of risk management efficiency and its determinants
This research aims at finding risk management efficiency and its determinants of non-life insurers operating in Pakistan. This study applies Data Envelopment Analysis (DEA) to determine the efficiency scores for risk management practices of firms over the period 2009-2018. Tobit model is applied t...
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| Main Author: | |
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| Format: | Article |
| Language: | English |
| Published: |
Penerbit Universiti Kebangsaan Malaysia
2020
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| Online Access: | http://journalarticle.ukm.my/15590/1/jeko_54%281%29-5.pdf http://journalarticle.ukm.my/15590/ https://www.ukm.my/fep/jem/content/2020.html |
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| Summary: | This research aims at finding risk management efficiency and its determinants of non-life insurers operating in
Pakistan. This study applies Data Envelopment Analysis (DEA) to determine the efficiency scores for risk management
practices of firms over the period 2009-2018. Tobit model is applied to identify factors influencing risk management
efficiency of firms. DEA results obtained indicate that the overall average efficiency score increases from 68% in
2009 to 76% in 2018. Tobit estimates show that the age and firm size has a significantly positive relationship with risk
management efficiency of firms. The study suggests that firms at lower efficiency frontier could improve their efficiency
level by performing better in terms of underwriting and investment activities as well as enhancing the value-added of
the firms. The study also recommends that non-life insurers should adopt a multifaceted approach in managing the
risks to derive greater benefits from their businesses. |
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