The Role of Privatization and Restructuring in Ownership on Insurance Companie's Efficiency

The article aims to identify a proper structure of ownership, which enhances the efficiency in insurance companies. In this framework, it can be argued that promoting privatization and free market is a way for enhancing the efficiency. The efficiency can be measured companies in term of the relationship between companie's ownership structure and their abilities. If so, proper privatization strategies will be formulated, and as a result, enhancing the insurance companie's efficiency will pave the ground for economic growth and stability in monetary and financial markets. This article examines comparatively private insurance companies operating in the Iran and Azerbaijan (2008-2010),based on Data Envelopment Analysis method. Findings show that restructuring in ownership can lead to increased efficiency in market if privatization is carried out in block-oriented terms. Also, it can be concluded that in order to enhance the efficiency in insurance companies, it is necessary to restructure government-owned insurance companies through changing their scales.