Box Cox-Fourier flexible functional forms in stochastic metafrontier analysis : the cost efficiency of the insurance industry in Malaysia
Takaful insurance industry is growing rapidly after nearly 30 years of operation. It is therefore desirable for the performance of this industry to be assessed to measure its level of achievement. Since the industry comprises conventional and Takaful insurance industries, then the form of organisa...
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| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Penerbit Universiti Kebangsaan Malaysia
2018
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| Online Access: | http://journalarticle.ukm.my/19630/1/jeko_521-11.pdf http://journalarticle.ukm.my/19630/ https://www.ukm.my/jem/issue/v52i1/ |
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| Summary: | Takaful insurance industry is growing rapidly after nearly 30 years of operation. It is therefore desirable for the
performance of this industry to be assessed to measure its level of achievement. Since the industry comprises conventional
and Takaful insurance industries, then the form of organisation may affect the efficiency. This study used the Meta
Stochastic Analysis Parametric Approach in order to measure the relationship between efficiency and organisational
structure for family Takaful operators and life insurance operators in Malaysia. The analysis of this study applied the
modified Box Cox Fourier functional form for a period of time ranging from 2004 to 2015. The findings showed that
there is a significant difference in cost efficiency between the Takaful industry and the life insurance industry. Overall,
the Takaful industry has lower cost efficiencies than conventional insurance, proving that the form of organisation
has an effect on efficiency. The findings also showed that the average difference in cost efficiency is influenced by
technology level gaps. |
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