Are Indian Life Insurance Companies Cost Efficient?

Abstract

The present paper estimated cost efficiency of the Life insurance companies operating in India for the period 2002-03 to 2006-07 using the new cost efficiency approach suggested by Tone (2002). The results suggest an upward trend in cost efficiency of the observed life insurers between 2002-03 and 2004-05. However, the trend was reversed for the next two years i.e. 2005-06 and 2006-07. This has been so because of the fact that during the initial years of observation. Mean cost efficiency of the private life insurers was rising but the trend was reversed in 2005-06 and 2006-07.