Analysis of insurance companies’ efficiency in the Republic of Serbia

Radojko Lukic; Miro Sokic; Dragana Vojteski Kljenak

doi:10.25167/ees.2018.45.14

Published: 2020-11-20

Vol. 18 No. 1 (45) (2018)

Analysis of insurance companies’ efficiency in the Republic of Serbia

Radojko Lukic

, Miro Sokic , Dragana Vojteski Kljenak

Economic and Environmental Studies

Section: Articles

https://doi.org/10.25167/ees.2018.45.14

Abstract

Lately, as it is known, considerable theoretical and practical attention has been dedicated to the problems of analysing the business efficiency of insurance companies, both worldwide and in particular countries. In view of this, the paper conveys a complex analysis of the 2016 business efficiency of insurance companies in the Republic of Serbia, using theoretical, methodological and empirical knowledge. Over 60% of Serbian insurance market is controlled by only three insurance companies. Out of the 16 insurance companies, 11 are inefficient. In order to improve their business, it is necessary, above all, to more efficiently manage their operating income and profits, by applying the "new business models" (i.e. cost management concepts, concepts of customer rotation, concept of sustainable development). This also applies to more efficient management of human capital. The significant role of employees in creating the added value for insurance companies in the Republic of Serbia. To this purpose (in order to increase efficiency), significant attention should be paid to life insurance, which has recorded a significant growth, year after year.

Keywords:

market share, profit per employee, strategic profit model, DEA model

Most read articles by the same author(s)

Download files

pdf

Citation rules

Lukic, R., Sokic, M., & Vojteski Kljenak, D. (2020). Analysis of insurance companies’ efficiency in the Republic of Serbia. Economic and Environmental Studies, 18(1 (45), 249–264. https://doi.org/10.25167/ees.2018.45.14

Cited by / Share

Licence

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

References

Barros, C.P. – Notaries, M. – Assay, A. (2010). Efficiency in the Greek Insurance Industry. European Journal of Operational Research 205: 431–436.
Google Scholar

Beemer, C., & Ealing, M. (2012). Organization and Efficiency in the International Insurance Industry: A Cross-Frontier Analysis. European Journal of Operational Research 221(2): 454-468.
Google Scholar

Beemer, C., Ealing, M. & Wires, J.H. (September 15-17, 2014). The Determinants of Efficiency and productivity in the Swiss Insurance Industry. Paper presented at the 41st Seminar of the European Group of Risk and Insurance Economists, St. Galen, Switzerland held.
Google Scholar

Chen, L. R., & McNamara, M. J. (2014). An Examination of the Relative Efficiency of Fraternal Insurers. The Journal of Insurance Issues 37(1): 1-31.
Google Scholar

Chuang, C. C., & Tang, Y.C. (2014). Asymmetric Dependence between Efficiency and Market Power: Longitudinal Perspective of the Taiwan Life Insurance Industry. International Journal of Applied Mathematics and Statistics 52(8): 144-151.
Google Scholar

Cummins, J.D. – Weiss, M.A. – Xian, X. – Zip, H. (2010): Economies of Scope in Financial Services: A DEA Efficiency Analysis of the US Insurance Industry. Journal of Banking & Finance 34: 1525–1539.
Google Scholar

Dalkiliç, N., & Ada, A.A. (2014). Efficiencies of Life/Pension Insurance Industry in Turkey: An Application of Data Envelopment Analysis. Journal of Applied Finance and Banking 4(1): 181-191.
Google Scholar

Annual Bulletin of Financial Statements. Belgrade: Agency for Business Registers of the Republic of Serbia.
Google Scholar

Knjezevic, S., Markovic, M. and Beown, A. (2015). Measuring the Efficiency of Serbian Insurance Companies. Acta Oeconomica 65(1): 91-1015.
Google Scholar

Ludwin, W.G. and Guthrie T. L. (1989). Assesing Productivity with Data Envelopment Analysis. Public Productivity Review 12(4): 361-372.
Google Scholar

Lu, W-M., Wang, W-K. & Kweh, Q.L. (2014). Intellectual Capital and Performance in the Chinese Life Insurance Industry. Omega 42(1): 65-74.
Google Scholar

Lukic, R. (2016). Accounting for Insurance Companies. Belgrade: Faculty of Economics.
Google Scholar

Lukic, R. (2016). Banking Accounting. Belgrade: Faculty of Economics.
Google Scholar

Mahlberg, B. & Url, T. (2010). Single Market Effects on Productivity in the German Insurance Industry. Journal of Banking & Finance 34(7): 1540-1548.
Google Scholar

Medved, D. – Kavacic, S. (2012): An Empirical Study of Efficiency in Croatia and Slovenia in Insurance Markets. Economic Research 25(1): 105–120.
Google Scholar

Peng, J-L., Chen, R-L. & Liu, W. P. (2014). The Banc assurance Cooperation Strategy and Efficiency of Life Insurance Companies. Academia Economic Papers 42(2): 235-269.
Google Scholar

Sinha, R. P. (2015). A Dynamic DEA Model for Indian Life Insurance Companies. Global Business Review 16(2): 1-12.
Google Scholar

Wise, W. (2017). A Survey of Life Insurance Efficiency Papers: Methods, Pros & Cons, Trends. Accounting 3: 137-170.
Google Scholar