Efficiency and Productivity of the Insurance Industry in the OECD Countries

The purpose of the paper is to measure technical efficiency levels in 15 OECD insurance industries over the period 1983-1991 and to decompose productivity changes into technical progress and efficiency variations. We show that the growth in the productivity observed in all countries is essentially imputable to improvements in technical progress. We then try to see whether some structural national characteristics of insurance markets can partly explain the differentials in efficiency levels across countries. Reinsurance rates and market shares in OECD both seem to favor efficiency levels. The study is a step towards a comprehensive efficiency comparative study of the OECD insurance markets especially desirable in this period of increasing integration and deregulation of the market.