Measuring Cost Efficiency of Indian Life Insurance Companies During the Post-liberalisation Era: A Farrell Approach

This article estimates the cost efficiencies of all Indian life insurance companies during the post-liberalisation era based on Farrell (1957) approach. Data on input and output variables and input price variables for all 24 companies have been collected from IRDA's handbook on Indian insurance statistics. It is seen that the Indian life insurance sector is 63.5 per cent cost efficient. While LIC, Edelweiss Tokio, IndiaFirst, SBI Life, Canara HSBC OBC and HDFC Life consistently projected high cost efficiency, Future Generali, Bajaj Allianz, Aviva Life, Bharti AXA, Shriram and Reliance Nippon Life failed to achieve cost efficient status.