An Analysis of the Relative Efficiencies of Insurance Companies In Nigeria, 2001-2005

Abstract

Although there exists some rating agencies which benchmark the performance of the banking industry in Nigeria such agencies are not available in the insurance industry thereby making a choice among the insurance companies a difficult one. This study uses Data Envelopment Analysis to determine the relative efficiencies of commercial insurance companies in Nigeria. The study reveals that not all the companies were effi-cient with respect to Scale Efficiency and that contrary to what might have been ex-pected, the most efficient insurance company is neither the biggest nor the oldest.

Keywords: Nigerian Insurance Companies, Data Envelopment Analysis, Performance, Tech-nical Efficiency, Scale Efficiency, Benchmarking.