Efficiency Measurement of Selected Insurance Companies Using Two-Stage DEA Models along with Window Analysis

In recent years, evaluation of insurance companies is taken into consideration by many researchers. Evaluation of insurance companies has an important effect on the improvement of their performance. Data envelopment analysis (DEA) is one of the most popular methods of performance assessment. In this paper, two-stage DEA window analysis is used to study the changes in efficiency rates of five insurance companies from 2010 to 2013. Considering the role of two-stage DEA models and their development in recent years, we use one of the newest two-stage processes that has eliminated the drawbacks of earlier models. We employ the outputs of this model for deriving the measures filling the window analysis cells. The first and second stage efficiency scores respectively reflect marketing performance and profitability of the insurance company. The results show that inefficient companies have weak performance in the second stage between 2010 and 2013. To fix this problem, the insurance companies should approach intermediate levels of efficiency. Our findings show that for some companies there is a significant gap between the initial and optimal intermediate measures.