1. Introduction
Since economic reforms were carried out in China, the Chinese insurance industry has grown rapidly. China's fastest-growing economy has grabbed worldwide attention, yet its overall growth rate has been dwarfed by that of the Chinese insurance industry. The Chinese life insurance market experienced particularly strong growth from 2007 to 2010. In 2011, the industry recorded a 6.8% rise in premium income, reaching RMB 969.98 billion (about USD 154 billion) [2], and it is expected to have a value of USD 237.5 billion in 2015, an increase of 66.3% over 2010. The largest segment of the Chinese insurance market is life insurance, accounting for 97.3% of the market's total value [3]. This segment has grown significantly with the number of life insurers increasing from 29 in 2004 to 61 in 2010.2
The Chinese insurance industry indeed holds enormous potential and offers opportunities to international insurers equipped with expertise and scale economies [4]. Nevertheless, mounting competition has caused domestic insurers to lose their advantage in efficiency. As a result, the gap between domestic and foreign insurers has narrowed since 2005 [5]. Yao et al. [6] point out that low productivity and low efficiency could stop the Chinese insurance industry from developing further. Many academicians and practitioners have studied whether efficient growth and development exist in the industry. Specifically, a considerable number of extant studies have investigated the performance of the industry by applying the data envelopment analysis (DEA) approach [7], [8] and [9]. Overall,
1. Introduction
Since economic reforms were carried out in China, the Chinese insurance industry has grown rapidly. China's fastest-growing economy has grabbed worldwide attention, yet its overall growth rate has been dwarfed by that of the Chinese insurance industry. The Chinese life insurance market experienced particularly strong growth from 2007 to 2010. In 2011, the industry recorded a 6.8% rise in premium income, reaching RMB 969.98 billion (about USD 154 billion) [2], and it is expected to have a value of USD 237.5 billion in 2015, an increase of 66.3% over 2010. The largest segment of the Chinese insurance market is life insurance, accounting for 97.3% of the market's total value [3]. This segment has grown significantly with the number of life insurers increasing from 29 in 2004 to 61 in 2010.2
The Chinese insurance industry indeed holds enormous potential and offers opportunities to international insurers equipped with expertise and scale economies [4]. Nevertheless, mounting competition has caused domestic insurers to lose their advantage in efficiency. As a result, the gap between domestic and foreign insurers has narrowed since 2005 [5]. Yao et al. [6] point out that low productivity and low efficiency could stop the Chinese insurance industry from developing further. Many academicians and practitioners have studied whether efficient growth and development exist in the industry. Specifically, a considerable number of extant studies have investigated the performance of the industry by applying the data envelopment analysis (DEA) approach [7], [8] and [9]. Overall,
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