Analysis of Efficiency and Productivity Growth in Iran’s Insurance Industry: A Data Envelopment Analysis Approach
Keywords:
Data Envelopment Analysis (DEA), Russell Efficiency Measure, Malmquist Productivity Index, Insurance IndustryAbstract
The insurance industry is one of the vital pillars of the financial system, playing an essential role in risk management, enhancing economic resilience, and facilitating investment. It has gained increasing significance in emerging and volatile economies such as Iran. The present study aims to evaluate the performance and analyze the productivity trends of Iranian insurance companies from 2017 to 2023 using the Data Envelopment Analysis (DEA) approach. Specifically, the non-radial Russell model and the Malmquist productivity index were applied. Additionally, the impact of contextual variables such as capital, number of branches, and company age on efficiency was examined through a linear regression model. For this purpose, the GAMS software was utilized. The findings indicate that during the studied period, Iran’s insurance industry experienced an unstable and predominantly declining trend in efficiency, particularly in critical years such as 2021–2022, when there was a sharp drop in technological and productivity indicators. However, in some years, there were signs of performance recovery and potential capacity for growth. The results also reveal that increasing capital alone did not guarantee improved efficiency, as traditional or inefficient structures hindered the optimal utilization of resources.
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