The Impact of Bancassurce on the Efficiency Performance of Life Insurance Companies in Taiwan

The recent development of Bancassurance 'activities in Taiwan help to generate significant amount of new insurance premiums for insurance companies. Especially, the cross-selling of insurance products through banks has become the second largest marketing channel for life insurers. Using a unique panel data set, this paper investigates whether the life insurers who involved in Bancassurance activities really increased their efficiency. We utilize the Data Envelopment Analysis (DEA) method to evaluate the efficiency changes during the sample period and further employ a Tobit regression to analyze the influence of Bancassurance on life insurers' efficiency performance. Our evidence confirms that Bancassurance plays an important role in influencing efficiency performance for life insurance companies. Specifically, Bancassurance has positive. impacts on the technical efficiency, scale efficiency and overall efficiency. However, the fact that an insurer belongs to a Financial Holding Company has on significant impact on life insurers' efficiency performance.