On the Growth and Productivity of Korean and Chinese Life Insurers

The main interest of this study is to compare the quality of the growthin terms of efficiency and productivity of insurance companies using a panel data from 2005 to 2010 from Korea and China and to draw implications for the future growth of thelife insurers of both countries.Using DEA method, we employed operational expenses, debt, and equity capitals as input variables, and use claims incurred, reserves, and total invested assets as output variables. The results show a dramatic progress in Chinese life industry, which indicatesthat life insurers in the country create market demand and respond well to the increased demand for life insurance.By contrast, the productivity of Korean life market has decreased during the observation period. We believe a series of proactive political decisions made by China government have projected into the growth of Chinese insurance industry during the observation period.In sum, using alternative variables set, Chinese life insurance industry is believed to have made a bigger stridein terms of market expansion and productivitythan Korean life insurance market has.