The Performance of Microinsurance Programs: A Data Envelopment Analysis

The purpose of this research is to measure the performance of microinsurance programs using data envelopment analysis and to derive implications for the viable provision of microinsurance products. This is a worthwhile exercise given the significant limitations of the existing performance measures used in the microinsurance industry. A single and simple to interpret performance measure can overcome these limitations and provide a sophisticated tool for performance measurement within a multidimensional framework. Moreover, this technique can incorporate the important social function that microinsurers fulfill and provide powerful managerial implications. We illustrate the capabilities of data envelopment analysis using a sample of 20 microinsurance programs and recent innovations from the efficiency literature, such as the bootstrapping of efficiency scores and a truncated regression analysis of efficiency determinants.