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Efficiency in the Life Insurance Industry: What are the Efficiency Gains from Bancassurance?Franco FiordelisiUniversity of Rome III, Italy; Washington University, Saint Louis - Olin Business School Ornella RicciUniversity of Rome III March 1, 2010 EMFI Working Paper No. 2 - 2010 Abstract: The aim of this paper is to assess whether bancassurance firms outperform other life insurance companies. Cost and profit efficiency are estimated using a stochastic frontier analysis and including several firm‐specific factors to overcome possible sample heterogeneity. On the cost side, we find strong evidence in favour of bancassurance as a distribution channel. Results on the profit side suggest the need to continuously revise the product mix. Bank ownership is not found to provide any direct advantages. As a consequence, the subjects involved should carefully consider looser forms of cooperation, such as cross‐selling agreements and non‐equity strategic alliances.
Number of Pages in PDF File: 34 Keywords: Bancassurance, Life Insurance, Stochastic Frontier Analysis, Cost Efficiency, Profit Efficiency JEL Classification: D2, G22, L25 working papers seriesDate posted: April 2, 2010Suggested CitationContact Information
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