Efficiency Performance Of Non-Life Insurance Sector Of Pakistan

Abstract

This study examines the efficiency of non-life insurance industry including non-family general Takaful firms operating in Pakistan by taking a panel data of 32 firms for the period 2017 to 2024. Non-parametric Data Envelopment Analysis approach along with Malmquist Index for total factor productivity (TFP) is used. The study uses enhanced decomposition of Malmquist index proposed by Fare et al. (1994) and decomposes TFP into efficiency change and technical change. Efficiency change is further decomposed into scale efficiency and pure efficiency. The study finds that efficiency change for non-life insurance industry of Pakistan is contributed by both pure and scale efficiency change; however, main component contributing to efficiency is pure efficiency change.