Analysis the effect of detariffication on the performance of Iranian insurance using mathematical and statistical modeling

Abstract

Deregulation such as elimination of tariff system is one of the fundamental institutional changes in the past decade in the Iranian insurance industry. Although it can affect on the markets performance, few research studied the effects of deregulation on insurer efficiency. In this study, a two-step approach is applied for analyzing the performance of insurance companies that combines mathematical programming and statistical method, in the ten-year period from 1384-1393 SH. The audiences of this research are all the stakeholders of the insurance industry, including market executives, their clients and regulatory organizations. The data have been compiled using a library study method from the insurance industry's annual statistics. Firstly we use Data Envelopment Analysis to calculate the efficiency of insurers in the ten-year period, and then in second step by Estimated Regression Equation the effect of deregulation on the insurer performance is investigated. The results show that detariffication has negative effect on the performance of insurers and reduced their efficiency. Finally, we present the recommendations for improving the performance of the insurers.

Keywords

• institutional changes
• tariff system
• performance analysis
• data envelopment analysis
• estimated regression equation