International Journal for Asian Contemporary Research, 2021, 1(III): 134-140

Research Article

Assessing Productivity of Life Insurance Companies in Bangladesh: A Comparison of Ratios, Index Numbers and Frontier Methods

Mohammad Sabbir Hossain
Mohammad Sabbir Hossain

Department of Finance and Banking, Patuakhali Science and Technology University, Bangladesh.

and Saiful Islam*
Saiful Islam*

*Department of Business Administration, City University, Dhaka, Bangladesh. Email: [email protected]

Received: 29 August, 2021 || Accepted: 28 September, 2021 || Published: 29 September, 2021


A b s t r a c t

Given the financial services sector's importance to the economy, the necessity to maintain the productivity of the insurance sector mainly the life insurance sector is very crucial. The life insurance business in Bangladesh has undergone a number of reforms from time to time, as is widely known. The purpose of this study is to evaluate the productivity of all listed life insurance companies of the Dhaka Stock Exchange (DSE) for the time period of 2011-2020. In the past, financial services productivity was measured using ratio analysis or index numbers but in this study to measure the productivity of the life insurance sector ratio analysis, index numbers and frontier methods are used. A frontier efficiency strategy for dealing with many inputs and outputs is presented in this study. It shows the value of the financial ratios, index numbers and frontier approach five life insurance companies are inefficient and others doing well in terms of measuring productivity. This study can help to take the decision to the concerned authority on the overall productivity of the life insurance sector and also can provide good ideas to the further researcher to construct wide research on assessing the productivity of the life insurance sector.

Keywords: Life insurance, productivity, ratio, index numbers and frontier methods.



Copyright information: Copyright © 2021 Author(s) retain the copyright of this article. This work is licensed under a Creative Commons Attribution 4.0 International License


    To cite this article: Hossain, M.S., & Islam, S. (2021). Assessing Productivity of Life Insurance Companies in Bangladesh: A Comparison of Ratios, Index Numbers and Frontier Methods. International Journal for Asian Contemporary Research, 1 (III), 134-140.  


  1. Athanassopoulos, Antreas D. and Joan A. Ballantine (1995) “Ratio and Frontier Analysis for Assessing Corporate Performance: Evidence from the Grocery Industry in the UK” The Journal of the Operational Research Society, Vol. 46, No. 4 pp. 427 – 440
  2. Banker, R.D.; Charnes, A. and Cooper, W.W., (1984), “Some models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis”, Management Science, 30, pp. 1078- 1092
  3. Banker, Rajiv D.; Conrad Robert F.; and Strauss Robert P. (1986) “A Comparative Application of Data Envelopment Analysis and Translog Methods: An Illustrative Study of Hospital Production” management science Vol. 32 No. 1 pp. 30-44
  4. Barnum, David T.; McNeil, Sue and Hart, Jonathan (2007) “Comparing the Efficiency of Public Transportation Subunits using Data Envelopment Analysis” Journal of Public Transportation Vol. 10 No.2
  5. Charnes, A.; Cooper, W.W. and Rhodes, E., (1978), “Measuring the Efficiency of DecisionMaking Units”, European Journal of Operations Research, 2, pp. 429-444.
  6. Cheong, Yunjae and Leckenby, John D. (2006) “An Evaluation of Advertising Media spending Efficiency Using Data Envelopment Analysis” Paper presented at the 2006 Conference of American Academy of Advertising
  7. Chesnick, David S. (2000.) “Financial Management and Ratio Analysis for Cooperative Enterprises,” US Department of Agriculture, Rural Business Cooperative Service, RBS Research Report 175
  8. E.X. Wang, C.Y. Wu Spatial-temporal Differences of provincial eco-efficiency in China based on super efficiency DEA Model Chin. J. Manage., 8 (3) (2011), pp. 443-450
  9. Farrell, M.J., (1957), “The Measurement of Productive Efficiency” Journal of the Royal Statistical Society, Series A, 120 (3), pp. 253-290
  10. Galarneau & Maynard (1995) “Measuring Productivity” Perspectives, Statistics Canada 75- 001E
  11. Lawder, K. (1989) “Ratios 101; Back to the basics of financial analysis.” Business Credit, June, 28-30.
  12. McLellan, Nathan (2004) “Measuring Productivity using the Index Number Approach: An Introduction” New Zealand Treasury Working Paper 04/05
  13. Miller, Sam (2008) “The Importance of Measuring Productivity”
  14. OECD (2001) “Measurement of Aggregate and Industry-Level Productivity Growth”
  15. Sherman, David H. (1984) “Hospital Efficiency Measurement and Evaluation: Empirical Test of a New Technique” Medical Care Vol. 22 No. 10 pp 922-938
  16. Wang, Yuan-Huei and Chou, Li-fang (2003) “The Efficiency of Nursing Homes in Taiwan: An Empirical Study Using Data Envelopment Analysis
  17. Yeh, Quey-Jen (1996). “The Application of Data Envelopment Analysis in Conjunction with Financial Ratios for Bank Performance Evaluation” Journal of Operational Research Society Vol. 47, No. 8, pp. 980-988

  Article View: 4459 times