MEASURING PERFORMANCE AND EFFICIENCY GROWTH OF THE SELECTED INDIAN LIFE INSURANCE COMPANIES: A TOTAL FACTOR PRODUCTIVITY APPROACH

In the pre-reform era, Life Insurance Corporation of India (L.I.C.I) dominated the Indian Life Insurance market. But the situation drastically changed since the beginning of the year 2000. With the development of the IRDA Act in 1999, private players started entering into the life insurance market. At the end of the FY 2009-10, there were 22 life insurance companies (inclusive of 1 public sector player, L.I.C.I) operating in India. The 21 private life insurers enjoyed a market share of 29.90%. The present paper attempts to compare the performance and efficiency in terms of Total factor Productivity (TFP) growth of 13 Indian life insurance companies (12 private sector and 1 publicsector) in respect of Catch-up efficiency and Frontier-shift efficiency for the FYs ranging from 2003-04 to 2009-10 using Data Envelopment Analysis (DEA)-Solver Software version 5.0. For this purpose, Net Premium Income and Number of products launched during the year has been taken as the output indicators and Operating expenses along with Commission expenses has been taken as the inputs.