Identifying the Configurations to Operating Efficiency in China's Life Insurance Industry Using Fuzzy-Set Qualitative Comparative Analysis

Abstract

This paper aims to measure the operating efficiency of 22 Chinese domestic and foreign-funded life insurance companies from 2013 to 2017 and outline the path to achieve high-quality development. The DEA-Malmquist was used to evaluate the total factor productivity on the sample of 22 Chinese domestic and foreign-funded life insurance companies. A fuzzy set qualitative comparative analysis (fsQCA) was also used to analyze the configuration of determinants affecting technical efficiency. The results show that the overall operating efficiency of life insurance companies in China is relatively satisfying. The changes in total factor productivity are mainly caused by changes in technical efficiency and changes in efficiency. However, changes in scale efficiency have little effect on Chinese domestic and foreign-funded life insurance companies. There is a significant difference in the operating efficiency between Chinese domestic and foreign-funded life insurance companies. In contrast, the operating efficiency is slightly higher than that of foreign-funded life insurance companies, which is mainly reflected in the difference in pure technical efficiency. The realization path of a life insurance company’s operating efficiency is primarily composed of high employee education and low overclosing ratio, high employee education and low reinsurance ratio, and all-factor positive investment. The weak employee quality and excessive overclosing are the main reasons for the low operating efficiency of some enterprises. This paper systematically analyzes the impact of the organization’s internal structure on the operating efficiency of life insurance companies. Finally, based on the configuration perspective, we explain the internal logic and path of achieving better operating efficiency. In the end, we also provide decision-making references for further improving the efficient operation of life insurance companies in China.