Dynamic network performance evaluation of general insurance companies: an insight into risk management committee structure

• Published in: Total quality management & business excellence Vol. 28; no. 5-6; pp. 542 - 558
• Main Authors: Kuo, Kuo-Cheng, Kweh, Qian Long, Ting, Irene Wei Kiong, Azizan, Noor Azlinna
• Format: Journal Article
• Language: English
• Published: Abingdon Routledge 16-04-2017; Taylor & Francis Ltd
• Subjects: Data envelopment analysis; dynamic network data envelopment analysis; Marketing; marketing efficiency; Performance evaluation; performance measurement; Profitability; profitability efficiency; Quality management; risk management committee structure; Total quality
• ISSN: 1478-3363; 1478-3371
• DOI: 10.1080/14783363.2015.1100516

Nowadays, insurance companies are operating in a challenging and borderless business world. They should focus on improving their competitive advantages to secure increased profits and reduced costs. As fundamental elements of total quality management, performance measurement and risk management play important roles in ensuring sustainable operation. This study investigates the relationship between risk management committee structure and the operating efficiency of general insurance companies operating in Malaysia for the period 2008-2013. First, this research applies the dynamic network data envelopment analysis methodology, decomposing the typical two-stage operating process of general insurance companies. That is, we estimate the marketing efficiency and profitability efficiency. We find that the sample companies have to first improve their marketing efficiency, and then proceed to improve their profitability efficiency. Second, this study applies truncated regression to test the impact of risk management committee structure on general insurers' operating efficiency. In today's business world, general life insurance companies have to manage risks well to gain a competitive advantage.