Two Stage Analysis: Analisis Technical Efficiency pada Perusahaan Asuransi Jiwa Konvensional dan Syariah, 2012-2020

Foza Hadyu Hasanatina, Risanda Alirastra Budiantoro, Vicky Oktavia

Abstract


Introduction to The Problem: The growth of Islamic Life Insurance and Conventional Life Insurance has increased quite rapidly when compared to other types of insurance. However, the results of empirical research show that the efficiency level of Islamic Life Insurance does not reach the level of efficiency. The source of inefficiency in Islamic Life Insurance in Indonesia lies in four variables, such us: total assets, commission fees, gross contribution and investment income. In addition, most of the efficiency studies focused on measuring banking efficiency.

Purpose: This study aims to measure technical efficiency and identify factors that affect technical efficiency of life insurance.

Methodology: In analyzing this research, the writer applied Two Stage Analysis, where the first phase of technical efficiency score calculation uses the Stochastic Frontier Approach (SFA) with an intermediation approach, the output variable being income investment, while the input variable is the commission fee and total operational costs; the second phase is a regression analysis that determines the determinants of technical efficiency scores, with the independent variables consisting of total asset, profitability life insurance company, and investment expenditure.

Findings: The results of this study indicate that during the span of the study period there were no life insurance company (conventional and sharia) that obtained perfect efficiency scores with a score of one. the average efficiency score of life insurance bank generated through parametric method (SFA) of 72,09 percent, so there are still 27,91 percent of opportunities that can be optimized to reach the operational level the most efficient. Based on the results of the study also shows that the main determinant that increases banking efficiency is total asset and investment expenditure

Keywords


life insurance company, Stochastic Frontier Analysis, two stage analysis

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