Efficiency Analysis of Traditional and Takaful Insurance Firms in Egypt: A Two-Stage Efficiency Model
Author (s)
Maher Abdellatif & Yuantao Xie
Abstract
The purpose of this study is to measure and analyze the efficiency of insurers (traditional, takaful) in Egypt, and to examine the determinants (Insurer-specific factors) that appear to affect the efficiency of insurers. The study uses a two-stage efficiency model: (1) input-oriented Data Envelopment Analysis (DEA), a non-parametric model to measure the efficiency of 17 non-life insurers (12 traditional, 5 takaful) in Egypt during the period from 2012 to 2021, and (2) a panel regression model to examine the determinants (Insurer-specific factors) of efficiency in the traditional and takaful insurance industry in Egypt. This study found that on average, the technical efficiency (TE) level of non-life insurers (traditional and takaful) was 79%, and there is still a need for 21% efficiency to improve the efficiency in the industry, moreover, takaful insurers achieved a better efficiency level than traditional insurers. On the other hand, the findings also showed that return on equity, size, type of operations, and age are positively related to insurers’ efficiency, while reinsurance, claims (risks), market share, leverage, and investments are negatively related to insurers’ efficiency. This study provides indicators relevant to insurance management (traditional and takaful) that will help them better utilize their resource base and increase their operational efficiency; to our knowledge, this paper is the first empirical evidence for traditional and takaful insurers together to measure efficiency and examine its determinants in Egypt.
Keywords: Efficiency, DEA, Panel regression model, Takaful, Insurance, Egypt.
| Title: | Efficiency Analysis of Traditional and Takaful Insurance Firms in Egypt: A Two-Stage Efficiency Model |
|---|---|
| Author: | Maher Abdellatif & Yuantao Xie |
| Journal Name: | International Journal of Science and Business |
| Website: | ijsab.com |
| ISSN: | ISSN 2520-4750 (Online), ISSN 2521-3040 (Print) |
| DOI: | https://doi.org/10.58970/IJSB.2473 |
| Media: | Online |
| Volume: | 41 |
| Issue: | 1 |
| Issue publication (Year): | 2024 |
| Acceptance Date: | 17/10/2024 |
| Date of Publication: | 20/10/2024 |
| PDF URL: | https://ijsab.com/wp-content/uploads/2473.pdf |
| Free download: | Available |
| Page: | 200-217 |
| First Page: | 200 |
| Last Page: | 217 |
| Paper Type: | Research paper |
| Current Status: | Published |
Cite This Article:
Abdellatif, M. & Xie, Y. (2024). Efficiency Analysis of Traditional and Takaful Insurance Firms in Egypt: A Two-Stage Efficiency Model, International Journal of Science and Business, 41(1), 200-217. DOI: https://doi.org/10.58970/IJSB.2473 Retrieved from https://ijsab.com/wp-content/uploads/2473.pdf
About Author (s)
Maher Abdellatif (Corresponding Author), School of Insurance and Economics, University of International Business and Economics (UIBE), Beijing 100029, China. ORCID: https://orcid.org/0009-0007-8274-9080
Yuantao Xie, School of Insurance and Economics, University of International Business and Economics (UIBE), Beijing 100029, China. ORCID: https://orcid.org/0000-0001-8507-9659
DOI: https://doi.org/10.58970/IJSB.2473