A two-stage DEA window analysis model for evaluating the efficiency in the Czech non-life insurance sector

The Czech non-life insurance sector has been always perceived as trustworthy. Still, the non-life insurance sector witnessed many mergers, acquisitions, and new insurer creations during the last decade. The tight market regulation leads to short-time investment tendency of the non-life insurers, which creates a high pressure on their underwriting efficiency. Therefore, to understand the market evolution, we apply a two-stage DEA window analysis model to evaluate the efficiency of the non-life insurers in the Czech market. This analysis targets to investigate dynamic changes of the underwriting and investment efficiency of 29 insurers from 2012 to 2021. The results revealed high average underwriting efficiency (0.617) and very low average investment efficiency (0.303) of the insurers. Moreover, high volatility of the underwriting (0.353) and investment (0.354) efficiency can be observed on the insurer-level, which may be associated to the fact that the non-life insurers often alternate between two different business approaches of maximum profit and the maximum revenues.