Using two‐stage DEA to measure managerial efficiency change of non‐life insurance companies in Taiwan

This paper uses the two‐stage Data Envelopment Analysis (DEA), which was firstly used by Seiford and Zhu (1999), and the Malmquist productivity index expressed by Fare et al. (1992), to measure the efficiency change of 17 non‐life insurance companies in Taiwan. Marketability was measured in the first stage while profitability was measured in the second stage. In addition, this paper uses OLS and Tobit regression model to examine the factors that significantly influence on the managerial efficiency of non‐life insurance industry. Moreover, the entire industry can be partitioned into four clusters based on marketability change and profitability change of a company. Effective management strategies are developed specially to each of the four clusters of non‐life insurance company for future management needs.